President Barack Obama doesn’t begrudge Wall Street’s banksters their bonuses.
The president, speaking in an interview, said in response to a question that while $17 million is “an extraordinary amount of money” for Main Street, “there are some baseball players who are making more than that and don’t get to the World Series either, so I’m shocked by that as well.”
“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”
Obama sought to combat perceptions that his administration is anti-business and trumpeted the influence corporate leaders have had on his economic policies. He plans to reiterate that message when he speaks to the Business Roundtable, which represents the heads of many of the biggest U.S. companies, on Feb. 24 in Washington.
Well, maybe the president is a bigger person than I am. Where I come from, we don’t just hold grudges. We nurse them and watch them grow.
And, like a lot of Americans, I do begrudge the likes of Dimon and Blankfein their multi-billion dollar bonuses. Not because I “begrudge people success or wealth,” but because I begrudge anyone their ill gotten gains — especially as others are made to support them and suffer the consequences of their actions.
Besides, if I can hold bear a grudge against a person, why can’t bear a grudge against corporations? After all, aren’t they people too?
I bear a grudge because they not only drove the housing crash the catalyzed the meltdown and resulting downturn, but they bet on the crash — and, thus far, appear to have won handsomely.
Washington – In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.
Goldman’s sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation’s premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.
Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.
Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman’s failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws.
“The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion,” said Laurence Kotlikoff, a Boston University economics professor who’s proposed a massive overhaul of the nation’s banks. “This is fraud and should be prosecuted.”
John Coffee, a Columbia University law professor who served on an advisory committee to the New York Stock Exchange, said that investment banks have wide latitude to manage their assets, and so the legality of Goldman’s maneuvers depends on what its executives knew at the time.
I bear a grudge because they knew the bottom would soon fall out, and — like true ponzi schemers — they cashed out in advance while leaving the rest of us stuck with their bad bets.
According to the standard narrative, the meltdown of Bear Stearns and Lehman Brothers largely wiped out the wealth of their top executives. Many – in the media, academia and the financial sector – have used this account to dismiss the view that pay structures caused excessive risk-taking and that reforming such structures is important. That standard narrative, however, turns out to be incorrect.
It is true that the top executives at both banks suffered significant losses on shares they held when their companies collapsed. But our analysis, using data from Securities and Exchange Commission filings, shows the banks’ top five executives had cashed out such large amounts since the beginning of this decade that, even after the losses, their net pay-offs during this period were substantially positive.
… Of course, the executives would have made much more had the banks not blown up. By contrast to shareholders who stuck with the banks, however, the executives’ total pay-offs during the period were decidedly in the black.
Our analysis undermines the claims that executives’ losses on shares during the collapses establish that they did not have incentives to take excessive risks. The fact that the executives did not sell all the shares they could prior to the meltdown does indicate that they did not anticipate collapse in the near future. But repeatedly cashing in large amounts of performance-based compensation based on short-term results did provide perverse incentives – incentives to improve short-term results even at the cost of an excessive rise in the risk of large losses at some (uncertain) point in the future.
I bear a grudge because we, the other 99%, essentially finance their profits.
Let’s pause for some reflection: The bank “stars” made most of their money on speculation, got nearly $124 billion in government guarantees and subsidies between them over the past year and a half, yet saw continued losses in the credit products most affected by consumer credit problems. Both are setting aside top-dollar bonuses. JPMorgan Chase CEO Jamie Dimon mentioned that he’s concerned about attracting talent, a translation for wanting to pay investment bankers big bucks—because, after all, they suffered so terribly last year, and he needs to stay competitive with his friends at Goldman. This doesn’t add up to a really healthy scenario. It’s more like bad déjà vu.
As a recent New York Times article (and many other publications in different words) said, “For the most part, the worst of the financial crisis seems to be over.” Sure, the crisis may appear to be over because the major banks of Wall Street are speculating well with government subsidies. But that’s a dangerous conclusion. It doesn’t mean that finance firms could thrive without the artificial, public-funded assistance. And it certainly doesn’t mean that consumers are any better off than they were before the crisis emerged. It’s just that they didn’t get the same generous subsidies.
I bear a grudgebecause they pour their billions in profits into lobbying against reforms that might protect the taxpayers who bailed them out.
The other day, the non-partisan Center for Responsive Politics reported that more than 15,600 companies spent at least $3.2 billion on federal lobbying last year. Five hundred thirty-five members of the House and Senate, more than 13,000 registered lobbyists in DC – you do the math.
This week, White House Special Counsel Norm Eisen blogged about President Obama’s plans to further crack down on lobbyists by updating the Lobbying Disclosure Act and getting Congress to mandate “low-dollar limits on the contributions lobbyists may bundle or make to candidates for federal office,” bundling being that insidious practice by which you raise a lot of money by hitting up a number of people for contributions and “bundling” their donations together.
Good luck with that, Norm. As we’ve seen, lobbyists are brilliantly devious at figuring out ways into the inner sanctums, and whoever’s behind the door tends to welcome them with open arms, as long as they’ve arrived with the secret password – “Cash.”
I bear a grudge because, having been saved by a taxpayer bailout, they use campaign contributions punish politicians who even talk about responsibility or accountability on their part, and reward those who toe their line.
If the Democratic Party has a stronghold on Wall Street, it is JPMorgan Chase.
Its chief executive, Jamie Dimon, is a friend of President Obama’s from Chicago, a frequent White House guest and a big Democratic donor. Its vice chairman, William M. Daley, a former Clinton administration cabinet official and Obama transition adviser, comes from Chicago’s Democratic dynasty.
But this year Chase’s political action committee is sending the Democrats a pointed message. While it has contributed to some individual Democrats and state organizations, it has rebuffed solicitations from the national Democratic House and Senate campaign committees. Instead, it gave $30,000 to their Republican counterparts.
The shift reflects the hard political edge to the industry’s campaign to thwart Mr. Obama’s proposals for tighter financial regulations.
I begrudge then their bonuses just as I begrudged their no-strings-attached bailout.
But the greedy aren’t facing the consequences. At least not that I can see. Not when the administration is asking taxpayers for $700 billion to bail out Wall Street, after already forking over $600 billion in bailouts thus far, and with a potential $1 trillion tab hanging over our heads as a consequence of all this. And to ask for this historic bailout with no strings attached, no accountability on the part of those being bailed out, and complete immunity from any legal or administrative review beats all standing, sitting or leaping records for gall.
No, this crash carries with it none of the hope that came with watching the Berlin Wall come down. Instead, there’s the gnawing sense of dread that I felt after watching the towers come down – and the fear was not so much what outside force might strike next, but what the administration might try to push through in a moment when people were frightened, confused, and desperately wanting someone to “fix it.”
Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses-many hundreds of billions, maybe much more. What’s not to like if you are a financial titan threatened with extinction?
If Wall Street gets away with this, it will represent an historic swindle of the American public-all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called “responsible opinion.” If this deal succeeds, I predict it will become a transforming event in American politics-exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.
And before I get comments about how people like Lee should live up to their obligations, remember that $25 billion Chase got from Treasury? It was intended, though apparently never specified, to be increase lending and aid troubled assets related to residential mortgages. But that wasn’t what Chase execs had planned, according to comments overheard on a conference call, just days after Chase agreed to take TARP money.
…In point of fact, the dirty little secret of the banking industry is that it has no intention of using the money to make new loans. But this executive was the first insider who’s been indiscreet enough to say it within earshot of a journalist.
(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)
“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”
Read that answer as many times as you want – you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same executive (who I’m not naming because he didn’t know I would be listening in) explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.
“Let me tell you about the very rich. They are different from you and me,” begins F.Scott Fitzgerald’s short story, “The Rich Boy.” It may be more true today than when he wrote it. And certainly more true than ever between you and your bank. They will demand that you make good on your overdrafts – both your own and the ones they create for you when it suits them. And then they will demand that you, as a taxpayer, cover theirs.
I bear a grudge because Washington has talked about CEO compensation for two years while doing very little about it.
conference call for members of the Securities Industry and Financial Markets Association on the night of the bailout vote. It was a privileged briefing, not meant for the ears of the uninitiated, where members were reassured that the executive compensation measures in the bill were a joke that didn’t apply to them or to existing contracts. No one else was supposed to know.And by “they” I mean the “banksters” and their accomplices, who met via
It was bloggers, by the way, who broke the news that the CEO salary restrictions in the TARP bill were toothless. It was bloggers who infiltrated today’s equivalent of a smokey backroom and alerted us to what was going on. For all the good it did.
With a bit more smarts, slightly less bloodlust, a new suit and and updated haircut, Ted Bundy — one of the best known, most charming sociopaths — might have done well on today’s Wall Street, and made a killing of a different sort. His “mask of normalcy” worked so well that his victims only realized it was a mask when it slipped off, well out of public view. By then, he didn’t need it anymore. He was in control.
That’s the thing about psychopaths. They don’t care about right, wrong or the consequences. Period. They aren’t going to do right this time just because they got caught last time. And certainly not if they get rewarded. And who can say that they haven’t been rewarded?
The $500,000 CEO pay cap announced by the president, in the wake of bailed out firms handing out $18 billion in bonuses, have one huge catch. They’re not retroactive. And Sen. McCaskill’s attempt to make them retroactive was quietly removed from the stimulus bill. Just as before, there’s a loophole big enough for all of the companies that have already been bailed out to fit through, provided they don’t end up getting back in line for more bailout money.
And, true to form, quite a few of them want to return the money they’ve received, saying they didn’t really need it in the first place, and — as Josh Marshall put it — implying that they wouldn’t be giving it back if we hadn’t treated it so shabbily.
What did we do? Make some noise about consequences? Sure, but they were empty noise, and the Wall Streeters know it.
I bear a grudge because since the crisis, because while they deposit their checks (and write checks to politicians) our (their?) government hasn’t yet seen fit to bailout Americans losing their home in the aftermath of the house bubble so many banksters profited handsomely from inflating, “moral hazards” not withstanding.
Remember how, back when taxpayers were being asked to fork over hundreds of billions of dollars to bail out Wall Street, we were told it was essential to saving Main Street?
Well, in just a few months, we’ve gone from saving the banks in order to save the economy to just saving the banks. It’s the opposite of mission creep.
… The larger problem continues to be the administration’s habit of conflating the health of the Wall Street economy with the health of the real economy — when, in fact, the two economies have become decoupled. The Dow may be up 30 percent since March, but the numbers that matter most to everyday Americans continue to tell a very different tale.
I bear a grudge because they are somehow still able to find work on Wall Street, even as unemployment resulting from the downturn they helped create threatens to cripple the real economy for a generation or more.
There is unemployment, a brief and relatively routine transitional state that results from the rise and fall of companies in any economy, and there is unemployment—chronic, all-consuming. The former is a necessary lubricant in any engine of economic growth. The latter is a pestilence that slowly eats away at people, families, and, if it spreads widely enough, the fabric of society. Indeed, history suggests that it is perhaps society’s most noxious ill.
The worst effects of pervasive joblessness—on family, politics, society—take time to incubate, and they show themselves only slowly. But ultimately, they leave deep marks that endure long after boom times have returned. Some of these marks are just now becoming visible, and even if the economy magically and fully recovers tomorrow, new ones will continue to appear. The longer our economic slump lasts, the deeper they’ll be.
If it persists much longer, this era of high joblessness will likely change the life course and character of a generation of young adults—and quite possibly those of the children behind them as well. It will leave an indelible imprint on many blue-collar white men—and on white culture. It could change the nature of modern marriage, and also cripple marriage as an institution in many communities. It may already be plunging many inner cities into a kind of despair and dysfunction not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years.
I bear a grudge because increased unemployment in the real economy has fueled an increase in foreclosures.
The foreclosure crisis has entered a new phase. It’s spreading beyond the wreckage of the housing bubble to metro areas in Oregon, Idaho, Utah, Arkansas, Illinois, and South Carolina where unemployment is rising, according to RealtyTrac’s Midyear 2009 Metropolitan Foreclosure Market Report released this morning.
California, Florida, Nevada, and Arizona continue to have the highest foreclosure rates in the nation. But some parts of Michigan, Ohio, Indiana, and California are seeing improvement, the report said. “While some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, new markets like Provo, Utah, and Boise, Idaho, have seen large increases,” James J. Saccacio, chief executive officer of RealtyTrac said in a prepared statement. “As unemployment rates increase in different parts of the country, it’s very likely that we’ll see similar patterns develop elsewhere.”
I bear a grudge because our foreclosure backlog stands at about 1.7 million, and because about half of our mortgages may be underwater by 2011. Meanwhile, only a fraction of homeowners who desperately need help have gotten it, and the very banks we bailed out seem reluctant to modify mortgages. It turns out they profit more from foreclosures.
I bear a grudge on behalf of people like Fausto Ordoñez.
Fausto Ordoñez tells his story for what must be the 10th or the 15th time, but the edge in his voice is as fresh as if this were the first. It began near the end of 2007, as the Great Housing Crisis  swept across the country and all but wiped out Ordoñez’s real estate business in the Dallas-Fort Worth area. Unable to keep up with his mortgage payments, Ordoñez turned to his mortgage company, Texas-based Saxon Mortgage Services , looking for options to help him save his home. Yet more than a year later, as the crisis deepened and the federal government rolled out its multibillion-dollar homeowner relief initiative , Ordoñez’s fate was as unclear as ever—and his drawn-out negotiations with Saxon had turned into a nightmare.
By the time the Treasury Department unveiled the centerpiece of its foreclosure prevention efforts, the $75 billion Home Affordable Modification Program , or HAMP, in March 2009, Ordoñez had endured countless setbacks. Saxon had first told him to stop making mortgage payments in order to qualify for a modification, then attempted to foreclose on his home when he followed the company’s instructions—the first of several foreclosure attempts by the company. As Ordoñez grew ever more desperate, he filled out the same paperwork on multiple occassions only to be told the company had lost it. Then, for an eight-month stretch, Saxon ceased contact with him altogether, no longer even sending him monthly bills. “It was one screwup of theirs after another,” he says.
When HAMP was announced, it offered Ordoñez a glimmer of hope. But Saxon wouldn’t modify his mortgage under the Obama administration’s much touted program. So he took matters into his own hands, filing complaints with the offices of Sen. John Cornyn (R-Tex.) and the Texas attorney general and contacting CBS News with his story. That outside advocacy, Ordoñez insists, is the only thing that saved him: In late June, he finally got his government modification. By then he estimates he’d called Saxon more than a hundred times, lost more than $4,000 on deposits for moving companies and rental housing when it looked as if he’d lose his home, and saw his credit damaged after multiple foreclosure attempts.
Believe it or not, Ordoñez is one of the lucky ones.
I bear a grudge for people like Lesa Heron.
On the Saturday before Thanksgiving, Lesa Herron of Santa Rosa, Calif., opened a letter from Chase Home Finance  (PDF). She’d been denied a permanent modification under the federal government’s loan-mod program, Chase said, because “Your hardship is not of a permanent nature.” No other reason was given.
For Herron, that was hard to understand. She was working two jobs and her mortgage payment still amounted to more than half of her income. She’d fallen two payments behind. If her money troubles were only temporary, it was news to her.
We at ProPublica reported last month that mortgage servicers are often not following the Treasury Department’s rules for the program  and provided three examples. One involved another homeowner who, like Herron, had been denied a modification because his hardship was not “permanent.”
I bear a grudge because job losses driven by the economic downturn are driving people from their homes.
The nation’s foreclosure crisis — once largely confined to only a few corners of the country — is spreading to new areas as the economy teeters. The foreclosure rates in 40 of the nation’s counties that have the most households have already doubled from last year, a USA TODAY analysis of data from the listing firm RealtyTrac shows.
Most were in areas far removed from the avalanche of bad mortgages and lost homes that have hammered the U.S. housing market. Among the new areas: Boise and Green Bay, Wis.
“The ripple effect is just broadening out to cover a lot more places,” says Susan Wachter, who studies real estate and finance at the University of Pennsylvania’s Wharton Scho
Unlike the foreclosure wave that began in 2007 and was driven by risky subprime loans, the latest increases are the result of the recession, which brought a sharp rise in unemployment across the country, Wachter and others say.
“What we’re seeing now are people who are being impacted by the slowdown,” says Deputy Housing and Urban Development Secretary Ron Sims.
I bear a grudge on behalf of people like Bert Cavajal.
After six months in a trial mortgage modification, Bert Carvajal got the bad news in early December.
Not only was he rejected for permanent assistance under President Obama’s foreclosure rescue program, he was also ineligible for any modification offered by his servicer, JPMorgan Chase.
Carvajal realized he needed help after seeing the overtime from his job as a construction project manager in the Miami-Dade school district dry up.
He can’t afford to pay $2,700 each month on the home he shares with his wife, two young children, mother-in-law and three dogs.
Not only is he late on his mortgage payments, he is also behind in his escrow account for property taxes. He says he can’t afford to make up the $15,000 he owes for the escrow account, which would bring up his monthly payment to $2,960.
Not willing to give up, he appealed to a special resolution group within Chase and called a housing counseling agency.
“I have to try to do something to save my home,” he said. “I’ve got nowhere to go.”
I bear a grudge because the increase in foreclosures has caused an increase in homelessness.
Growing numbers of Americans who have lost houses to foreclosure are landing in homeless shelters, according to social service groups and a recent report by a coalition of housing advocates.
Only three years ago, foreclosure was rarely a factor in how people became homeless. But among the homeless people that social service agencies have helped over the last year, an average of 10 percent lost homes to foreclosure, according to “Foreclosure to Homelessness 2009,” a survey produced by the National Coalition for the Homeless and six other advocacy groups.
…Most people who become homeless because of foreclosure had been low-income renters whose landlords stopped making their mortgage payments, leaving them scrambling for new housing with little notice and scant savings, according to the survey and interviews with shelters.
But in recent months, there has been a visible increase in the number of former homeowners showing up in shelters.
I bear a grudge on behalf of the 1.5 million homeless children in this country.
One in 50 children is homeless in the United States every year, according to a report released Tuesday.
The report, by the National Center on Family Homelessness, analyzed data from 2005-06 and found that more than 1.5 million children were without a home.
“These numbers will grow as home foreclosures continue to rise,” Ellen Bassuk, president of the center, said in a statement.
The study ranked states on their performance in four areas: the extent of child homelessness, the risk for it, child well-being and the state’s policy and planning efforts.
…Homeless children have poor health, emotional problems and low graduation rates, the study found.
“The consequences to our society will play out for decades,” Bassuk said. “As we bail out the rest of our nation, it is also time to come to their aid.”
I bear a grudge because they are going to school hungry, and we still haven’t bailed them out yet.
More than 60 percent of the teachers responding to the survey, Hunger in America’s Classrooms, say most or many of the students at their schools rely on school meals for their primary source of nutrition. But that often is not enough, and teachers are dipping into their wallets to fill the gaps. Elementary teachers reported spending an average of $27 a month to buy snacks and other food items for their students and for middle school teachers, the average is $38.
What’s happening in the schools is a reflection of what’s going on outside the classroom as well. The New York Timesreported last week that nearly one in four children in the United States receive food stamps. In St. Louis, Memphis and New Orleans, half of the children or more receive food stamps as do 40 percent of children in Peoria, Ill. The number of food stamp recipients has climbed by some 10 million over the past two years, resulting in a program that now feeds one in eight Americans, the Times reported.
Nearly 17 million U.S. children are considered at risk of hunger at some time during each school year, according to the AFT. Randi Weingarten, AFT’s president, says the fact that any child in America who comes to school too hungry to learn is a “travesty.”
November is when the U.S. Department of Agriculture announces the latest rates of domestic food insecurity and hunger (labeled by the department’s experts as “very low food security”). In 2007, the numbers stood at 12.1 percent of all Americans, about 36 million of our brothers and sisters. On November 16, the department announced that 49 million Americans were now food insecure, the highest figure since the department started measuring domestic hunger in 1997. It was a figure so appalling that it even shocked long-time anti-hunger advocates.
The revelation that there are that many hungry Americans will no doubt prompt government agencies to tout the safety net virtues of the food stamp program and the Department of Agriculture’s other 14 food assistance programs. Now giving more than 36 million Americans (yes, also a record) a not terribly generous $1.30 per meal, food stamps will again be revealed for what they are and are not: a pretty good way to keep people from starving, but a failure when it comes to addressing the root causes of food insecurity, namely poverty
I bear a grudge on behalf of people like Stephanie Wheeler.
I’m reading the reports of the awful job reports that came out today. I’ve been arguing for some time that the search of “green shoots” in the economy is a mirage and an experiment that covers up how bad the economy is for real people. But, this made me stop in my tracks.
From the NYTimes:
In Elizabeth, N.J., Stephanie Wheeler has been watching her savings and unemployment benefits run out. A year after she lost her job at a data processing company, she has $800 left in her savings account and six more weeks of $379 unemployment checks. After that, she said she does not know what to do.
“It’s terrifying,” Ms. Wheeler, 56, said. “I have an apartment. I’ve been here for eight years. I don’t know what’s going to happen. I’m petrified of being set out on the street.”
She said she has been applying for work as an administrative assistant, receptionist and in customer service, and resorted to paying an online agency $206 to update her résumé, after she said she was guaranteed a job or her money back. So far, she has gotten neither. She said she has been paring back her expenses as best she can, starting with meals.
“I try to eat less,” she said.
I TRY TO EAT LESS.
That is the survival strategy of many people in the United States of America.
I begrudge them their bonuses because, years into this crisis, our government has bailed them out while watching poverty spread to the very suburbs their bubble built.
[David] Knox lines up once a month at a food pantry in Hoffman Estates, a middle-class suburb just a short drive from the biggest mall in the area and the global headquarters of Fortune 500 companies like Motorola, McDonald’s, and Kraft Foods. Knox, a computer programmer, used to be part of that prosperous world. But at 53 and with skills he says are rapidly becoming obsolete, he doubts his ability to climb back in.
“I’m older, and in a lot of cases they want to hire younger people,” he says.
Knox, once a middle-class suburban homeowner, may be the new face of American poverty. The suburbs — not the inner cities — are now home to the largest and fastest-growing poor population in the US, according to a report by the Brookings Institution in Washington, D.C. The population of poor jumped 15 percent between 2000 and 2008 — reversing the previous decade’s gains — but the suburbs saw the biggest increase, climbing by 25 percent. By 2008, according to Brookings, the suburbs were home to one-third of the nation’s poor.
Many are first-generation migrants struggling to find low-wage jobs, but others are middle-class professionals fallen from fortune.
I bear a grudge because our (their?) government gives away trillions in accountability-free bailouts, yet can’t pass a real jobs bill with even a chance of creating long-term recovery.
There’s a problem with the bipartisan jobs bill emerging in the Senate: It won’t create many jobs.
The bill includes tax cuts to please Republicans and its passage would hand President Barack Obama a badly needed political victory. But even the Obama administration acknowledges the legislation’s centerpiece – a tax cut for businesses that hire unemployed workers – would work only on the margins.
Tax experts and business leaders said companies are unlikely to hire workers just to receive a tax break. Before businesses start hiring, they need increased demand for their products, more work for their employees and more revenue to pay those workers.
I bear a grudge because the very job-killing downturn their practices helped create hits the poorest the hardest.
There has been talk about income inequality over the past several years, but what is happening now is catastrophic. The Center for Labor Market Studies at Northeastern University in Boston divided American households into 10 groups based on annual household income. Then it analyzed labor conditions in each of the groups during the fourth quarter of 2009.
The highest group, with household incomes of $150,000 or more, had an unemployment rate during that quarter of 3.2 percent. The next highest, with incomes of $100,000 to 149,999, had an unemployment rate of 4 percent.
Contrast those figures with the unemployment rate of the lowest group, which had annual household incomes of $12,499 or less. The unemployment rate of that group during the fourth quarter of last year was a staggering 30.8 percent. That’s more than five points higher than the overall jobless rate at the height of the Depression.
The next lowest group, with incomes of $12,500 to $20,000, had an unemployment rate of 19.1 percent.
These are the kinds of jobless rates that push families already struggling on meager incomes into destitution. And such gruesome gaps in the condition of groups at the top and bottom of the economic ladder are unmistakable signs of impending societal instability. This is dangerous stuff. Nothing good can come of vast armies of the unemployed just sitting out there, simmering.
I bear a grudge because they enjoy a recovery limited to Wall Street, while Americans’ economic stress only increases.
The AP’s Economic Stress Index found that the average county’s score in December was 10.8. That’s a sharp jump from the 10.2 reading in November. The previous worst reading since the recession began in December 2007 was 10.3 in March 2009.
The index calculates a score from 1 to 100 based on a county’s unemployment, foreclosure and bankruptcy rates. A higher score indicates more economic stress. Under a rough rule of thumb, a county is considered stressed when its score exceeds 11.
Nearly 45 percent of the nation’s 3,141 counties were deemed stressed in December. That compares with less than 39 percent in the previous month.
…In the past six months, foreclosure rates have risen fastest in a stretch of Western counties extending from Montana to Arizona. Foreclosures also have surged in manufacturing counties in the industrial Midwest, parts of Florida and metro Atlanta.
“Consistently high unemployment continues to feed into the foreclosure problem,” Snaith said. “We’ve already got significant foreclosures taking place already. Now, more traditional ones are taking place because one or more household members have lost their jobs.”
Bankruptcy rates in the past six months have grown fastest in Nevada, Arizona, California and Utah.
I bear a grudge because while they have long since received their bailout, neither Congress nor the White House has the political will to make significant investments in a recovery for the rest of us.
I hold a grudge because of the body count on Main Street.
In recent weeks, the media has begun to address the burgeoning body count, at least anecdotally. Suicide is, however, just one type of extreme act that has resulted from the financial crisis, and the attendant rise in foreclosures. Stories of resistance to eviction, arson, self-inflicted injury and murder have also bubbled up into the local news. Nationally, the media has paid scant attention to the pattern of these events
It’s impossible to know what personal factors contribute to such extreme acts, but it is a fact that during periods of economic turmoil, the rates of stress, depression and suicide climb.
In May, Kathleen Hall, founder of the Stress Institute in Atlanta, told USA Today’sStephanie Armour, “Suicides are very much tied to the economy.”
Rich Paul, a vice president at ValueOptions Inc., which handles mental health referrals, recently told the Los Angeles Timesthat in the last year, stress-related calls arising from foreclosures or financial hardship had increased by 200 percent in California. Similarly, Dr. Mason Turner, chief of psychiatry at Kaiser Permanente’s San Francisco Medical Center, reported “a fourfold increase in psychiatric admissions at his hospital during August, with roughly 60 percent of patients saying financial stress contributed to their problems.”
I begrudge them their post-bailout tax rate of 1%.
Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.
The company’s effective income tax rate dropped to 1 percent from 34.1 percent, New York-based Goldman Sachs said today in a statement. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.
Goldman Sachs, which today reported its first quarterly loss since going public in 1999, lowered its rate with more tax credits as a percentage of earnings and because of “changes in geographic earnings mix,” the company said.
The rate decline looks “a little extreme,” said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC.
“I was definitely taken aback,” Willens said. “Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.”
I bear a grudge because they are “too big to fail.”
Rich people are the most important. Rich neighborhoods are the most important. Rich lobbyists are the most important. Rich corporations are the most important. Rich countries are the most important.
That’s what we really believe. Only a few elitists are brazen enough to say it out loud, but functionally this is what be believe. Rich people are the most important. With notably rare exception, this is the way we have our relationships structured on every level from the top down to the bottom up, from Wall Street to Main Street, from the White House to the Picket fence house, from the Big house to the Crack house.
Why are we surprised at the latest AIG spit in the eye? Their actions are a snapshot of the way our entire economic system is set up. Stewart Acuffwith the AFL-CIO recently stated that CEO pay in 1980 was 40 times as much as the average worker, today it is 400 times as much. 47 million of us in America are without healthcare, and 20 percent more people live in poverty today than when George Bush took office.
When satiated executives are due ludicrous contractual bonuses we must follow the law. Yet, Auto corporations flippantly tell autoworkers they cannot honor their contracts in regard to hard earned health and retirement benefits.
To the Editor:
I know what was meant by it, but I couldn’t help rolling my eyes when I read the subtitle of your December 19th issue: “People who matter, on what matters most.” Frankly, that struck me as precisely our problem in this country, on so many levels.
The very idea of “people who matter” inevitably comes paired with the idea that there are “people who don’t matter.” It’s the basis of what Robert Fuller calls “rankism” — which, instead of seeing the world in black and white, sees it populated with “somebodies and nobodies.” Fuller writes, “‘Somebodies’ are sought after, given preference, lionized. ‘Nobodies’ get insulted, dissed, exploited, ignored.”
…In the past year, we’ve almost all been “outranked” by “people who matter.” Main Street has been “outranked” by Wall Street, and is still waiting for its own bailout. Voters have been “outranked” by the health insurance industry, and will have to wait for the kind of health care reform we hoped for and voted for. We were outranked on the extension of a war that’s been a drain on our economy and doesn’t appear to have made us any safer.
We were, in fact, out ranked by some of the very “somebodies” you interviewed for the feature. Just a couple of quotes from Tim Geithner, dismissing the criticism of the Wall Street bailout and the lack of a Main Street bailout, illustrates this much.
And of course, now that the “people who matter” have been bailed out, a billionaire “somebody” like Pete Peterson — with the help of the “somebodies” at the Washington Post — is campaigning for “austerity,” which has always and only ever meant tax cuts for “people who matter” (like him) and more painful cuts for “people who don’t matter” (basically everyone from the middle class on down.)
…Corny as it may sound, until none of us are “nobodies” and we are all “people who matter”, we can only expect to make progress in fits and starts — and then only to a point.
That day may yet be a long way off, perpetuating the notion of that there are “people who matter” and the unavoidable (though usually unspoken) conclusion that there are “people who don’t matter” puts it even further out of reach.
I bear a grudge because our (their?) government treats banks in need of help with more regard than people in need of help.
Like a lot of Americans, I will probably continue to bear a grudge as long as this the case.
And not just against Wall Street.