One Reason the Country is in a Mess

We need to look no further than the rise and return of the Rubinites, neoliberals who call themselves "Democrats," to understand how the country got so screwed up.

This piece focuses on Larry Summers, who, along with Robert Rubin and the others, should be doing jail time instead of being "promoted" to cushy jobs in government and at Harvard.

In a bigger sense, the decades-long dance of Rubin and Summers in and out of Washington has become emblematic of a second Gilded Age that wouldn’t even measure well against the first one from a century ago. Much of the public has come to view the Obama Administration as the latest round in a quickening game of musical chairs, played by the same old politicians who owe their fortunes or their careers to the same financial institutions that destroyed the economy, each round further consolidating their unaccountable power, each round bringing fresh disillusionment.

Harvard University is right at the center of all of this mess thanks to these crooks going in and out of government and ruining the country.

Harvard should have the same reputation as the University of Phoenix.

News, Etc.

Read between the lines of this article, and it sounds like bad news for Harry & David, especially when most of the execs don't even live in the Rogue Valley.

Employees sing a different tune than the absentee execs who probably can't find Medford, Oregon, on a map.

What a pair of winners:

The new CEO, Steve Heyer, lost his most recent high-profile job as chief executive at Starwood Hotels after facing allegations that he had sent inappropriate sexual e-mails to underlings.

Ross Klein, whom Heyer brought in to run Harry & David's new branding effort, left a job at Hilton Hotels in 2008 after he was accused of corporate espionage, an allegation that is a subject of a federal criminal investigation. Klein is working out of an office near his home in Beverly Hills.

Heyer and Klein have denied any wrongdoing.

Jones of Wasserstein praised both men.

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Doug and Cindy Hampton may lose their home, but I seriously doubt they will be homeless.
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Good riddance to this piece of rubbish.
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Speaking of rubbish, I am glad I didn't bother to look at Oprah Winfrey's trashing of public school teachers. As the writer of the linked post notes, Oprah is hardly in the position to cast stones at American public schools.

Larry Summers Lies His Ass Off

about the country going through "recovery." There is NO recovery if people aren't working.

Nobody gives a shit about Wall Street and whether it is doing any good:

The Wall Street Journal reported last week that private sector payrolls in the US are lower than they were at the end of 1999. Since the recession began, 7.2 million jobs have been lost—bringing the total number of workers officially unemployed to over 15 million.

The Journal noted, “Even if the job market were to return to the rapid pace of the 1990s—adding 2.15 million private-sector jobs a year, double the 2001-2007 pace—the US wouldn’t get back to a 5 percent unemployment rate until late 2017, Rutgers University economist Joseph Seneca estimated. And that assumes no recession between now and then.”

While the official unemployment rate is 9.8 percent, the US Labor Department’s broader measure, including those who have stopped looking for work and temporary employees who cannot find full-time work, has reached a record level of 17 percent.

The depth of the social crisis was put on display last week, when nearly 50,000 people lined up in downtown Detroit seeking assistance in paying their utility bills and preventing eviction or foreclosure from their homes. The paltry $15 million provided by the stimulus package will be able to serve no more than 3,400 households.

With 6.3 job searchers for every opening, it has become commonplace for thousands to apply every time an employer advertises for a few positions. Last week, 10,000 unemployed workers applied for 90 jobs over the course of three days at a Louisville, Kentucky, General Electric (GE) plant.

Nobody in Washington gives a crap if people starve. They have theirs, after all.

The Economic Mess

Is the Obama administration looking to screw people over (again) by attacking programs like Social Security?

I have said I didn't exactly trust him, so any talk about cutting SS, had better not leave the talking stage; in fact, it shouldn't even be in the thinking stage.

A snip:

That such comments portend an unprecedented attack on Social Security, the bedrock federal program for retirees dating from the Great Depression, was underscored by two articles posted Sunday on the Washington Post web site. One, entitled “Don’t Expect Retirement Help,” declared, “Uncle Sam won’t be of much help” to the millions whose retirement savings have been decimated, “with Social Security likely to face cuts in benefits.” The other was ominously headlined “A Flimsy Trust: Why Social Security Needs Some Major Repairs.”

It should be noted that these individuals—Obama, Geithner, Summers and Greenspan as well as the talk show moderators—are all multi-millionaires. The "hard choices" they speak of will not impact their lives in the least.

Beginning with Obama, they all exhibit a combination of callousness and ruthlessness that bespeaks not only themselves, but the ruling class whose interests they defend. Their touting of an economic “recovery” for the wealthy at the expense of the broad mass of the population must be taken as a warning.

All of the policies of the Obama administration have been focused on protecting the interests of a financial aristocracy that exercises a de facto dictatorship over the social and political life of the country. Now, the crisis which the bankers precipitated is being used to effect a permanent reduction in the living standards and social position of working people.

There will be no return to the already depressed wage levels and paltry social benefits that existed prior to the crash of 2008. Instead, a further redistribution of wealth from the bottom to the top will be carried out through the destruction of all that remains of past social gains and an immense intensification in the exploitation of the working class.

If that happens, expect massive social unrest, even in the apathetic United States.

Leave It to Larry

to defend Obama's kowtowing to Wall Street as Summers is one of the architects of Obama's economic policies.

Obama

had better get his shit together on the economy and get rid of the likes of Summers and Geithner or the public is going to lose all faith in his ability to turn things around:

It is becoming increasingly apparent that our economic recovery measures are being designed and implemented exclusively from Wall Street's point of view. The needs of investment bankers, stock speculators, corporate bankers, hedge fund operators, and insurance moguls are taking total precedence over the needs of the American taxpayers and the American people, particularly including those who have led frugal, responsible lives and have much of their assets in savings. A day of reckoning will come in response to the printing of almost $3 trillion in greenbacks that have been given to these institutions, and the effects of this behavior will hit hardest on those whose holdings are primarily in American dollars -- the "prudent" savers among us -- and on working Americans whose salaries are not adjusted according to fluctuations in monetary rates. It will hit hardest on those with fixed incomes.

Summers and Geithner (and to a slightly lesser extent Bernanke) seem to be striving to return Wall Street to the "good old days" of business as usual c. 2005-2006. They seem intent to measure our economic performance by the Dow, and wish to restore the health of our megabanks and mega-brokerages. I do not believe this to be the solution.

They are not trying to design a new, stronger, more resilient financial system less vulnerable to bubble-and-bust. I do not believe that Summers and Geithner are the guys for that job, but that's the job we need to have done. Instead they are trying to rehabilitate the current system, and it is the current system that has failed. Geithner is a bean-counter and might make a better Treasurer than Secretary of the Treasury. Summers, through and through in his heart and in his mind, is an investment banker -- it is all he knows and all he sees. He completely identifies with their needs and aspirations and will do everything he can to make life good for his colleagues in that field. But it is regulating, and indeed governing, in the exclusive interests of these very people that have caused our ruin and that will prevent our recovery if we continue to do it.

The AIG debacle is just a big red flashing light -- important to deal with, but not the actual danger. We are absolutely right to be outraged by those bonuses but we are ignoring the greater lesson of them -- the "bonus system" of compensation itself that encourages exactly the kind of dangerous behavior that has given us the current disaster. Think: What are those bonuses granted for? Designing and marketing innovative financial instruments; hawking the greatest volume of high-risk investments to unsuspecting investors; selling the most snake-oil insurance policies; outsourcing jobs and entire industries to overseas firms; and in more industrial fields, closing manufacturing plants and laying off the most employees in the name of "productivity." Are these the things we really want to reward at the level of a winning lotto ticket (another recent abomination created with the purpose of shifting the tax burden onto the backs of the poor)?

And yes, our economic policies should move sharply to the left. No more Chicago school, neoliberal, or Friedmanite nonsense.

Has the Kool Aid Finally Worn Off

for Frank Rich? For the first time in many months he finally makes some coherent sense regarding Obama.

Well, when you are in fact a product of the Chicago School, and Obama actually taught at the University of Chicago, and when you surround yourself with Friedmanites of the Democratic persuasion, or neoliberals, any economic policy which seeks to prop up the status quo is going to fail. The status quo, which for the past thirty years has been Friedmanism or some variation thereof, has been a complete failure. If one wants to use the Katrina comparison, you can't plug a leaking levee with a bandaid.

And Geithner and Summers HAVE to be ditched.

Robert Scheer on AIG, Etc.

Some of Obama's people need to get the hell out of Dodge.

The Kool Aid Has Finally Worn Off

for this commentator, and he doesn't like what he sees in Obama, with the Obama administration's clear pandering to Wall Street:

As everyone who has ever read anything I write knows, I am a big fan of Barack Obama, an absolute yellow-dog Democrat, and much quicker to defend anything any Democrat does or says than to criticize it.

But I have to say that I believe that Barack Obama has chosen the wrong people for his economic team and needs to rectify this mistake quickly or risk losing the public support he needs to accomplish what he intends. Geithner, Summers and Bernanke have got to go, and go quickly.

I would suggest replacing Timothy Geithner with Robert Reich, Larry Summers with Paul Krugman, and let them pick Bernanke's replacement.

See, Summers, Geithner and Bernanke are striving to rehabilitate the existing system that has failed. We need a fresh team, a team without ties to the Wall Street of the last two decades, to create a new financial system that is better suited to the realities of the times in which we now live.

These guys (and members of Congress) talk about taxing the bonuses of executives of bailed-out corporations at a confiscatory rate, or banning those bonuses outright. Why is this limited to bailed-out corporations only? Why not confiscate or ban them throughout the entire economy for all American businesses? They are NEVER fair, they are rife with cronyism and nepotism, and they are the source of a lot of the difficulties we now face. For example, take AIG (in the immortal words of Henny Youngman, "Please!"). The "performance" that triggered the receipt of these bonuses involved smooth-talking agents selling snake-oil investments, and the more persuasively deceptive they were, the more customers they bilked, the more likely it was that they'd get the big money. And this is true throughout the whole system of investment banking and insurance, not just AIG.

We have GOT to stop rewarding that kind of corruption. It is not good for our national health.

With the announcement of today's ADDITIONAL $1.2 t-t-t-trillion in stimulus from the Fed, that's ANOTHER two months of EVERYBODY'S pay. It brings the cost of this bailout to FIFTEEN MONTHS of the salary of EVERY AMERICAN WORKER'S SALARY COMBINED. How stimulative would it be if we just gave everybody a lump-sum check for a year and three months of salary?

I am afraid we are following in the footsteps of the Weimar Republic. And I am afraid that Goldman Sachs is the Obama administration's Halliburton.

Boy, Do I Agree

with this sentiment on AIG:

Lawrence Summers, director of the White House National Economic Council, declared in a CBS television interview, "The easy thing would be to just say, you know, ‘Off with their heads,' and violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law."

With this turn of phrase invoking the guillotine, Summers inadvertently put his finger on an essential element of the AIG bonuses furor. Like the nobility at the time of the French Revolution, America's ruling financial oligarchy is an entirely parasitic social layer, whose relentless defense of its wealth and privileges stands as the basic impediment to meeting the most basic needs of society as a whole.
In reality, the AIG bonuses are hardly an aberration. Citigroup's CEO Vikram Pandit hauled in $10.82 million of compensation in 2008, Reuters reported Monday. This payout came as the bank received a $45 billion capital injection from the US government.

Bank of America Corp. CEO Kenneth Lewis fared only slightly worse, getting $9.96 million as his bank also received $45 billion in bailout funds.

Moreover, these obscene pay packages and bonuses are only a small part of the money handed out to the financial elite.

And then there's this opinion piece, which basically says "Your money or your life."

What is wrong with this country is the massive wealth transfer upward to fewer and fewer hands while everybody else is forced into impoverishment because of it. By rights the bonuses should be denied, but who is bribing our politicians to continue with the obscene handouts? The same economic elite.

On the Contrary,

Larry Summers, as well as all of the other neoliberals, needs to be sacked on his butt.

But The New Republic more often than not supports neoliberal positions and neoliberals, whether or not those positions and individuals are good for the country.

And speaking of Summers and his cohorts, how about AIG?

Maybe I have become infected with that dreaded political disease, "group-think." I am as fed up with AIG as I have ever been at any American company since Enron, and maybe even including Enron. I hope it is not merely because I have been told by every elected official, every news reader, everyone, that I should feel this way. I would hate to become so wooly-pated that someone might confuse me with a marino.

The idea that these outrageous bonuses that this bankrupt company is paying to their executives out of OUR pockets constitute some kind of unbreakable contractual obligations is palpable nonsense. It's just an excuse, and a bad one at that. It's almost as if Summers or Geithner asked them to provide an excuse, ANY excuse, and they could try to make it fly no matter how wacky it was. They made the auto companies break their contracts with the unions, right? Those weren't as binding? Unlike GM, this company engaged in utterly irresponsible behavior and was instrumental in CAUSING our current financial problems. They should go bankrupt. They should already BE bankrupt. Unlike GM, this mess was, in fairly large measure, AIG's fault.

There are so many options to stop this that I have no way to list them all. Tax those bonuses at a 100% rate, which might be the best option because they could do that to ALL bonuses -- not just AIG's -- above a certain amount, or any amount paid by companies that are losing money. Take over AIG's obligations to policy holders at pennies on the dollar and let the rest of the company go belly-up Chapter 7, which is probably the most just and fair outcome. Mandate that AIG receive no further help unless these bonuses are NOT paid, and let the poor "betrayed' millionaire executives try to sue to compel payment. Those court proceedings would be a real hoot!

Or storm their offices with torches and pitchforks and drag the bonus recipients, and the executives who ordered them, out by their feet. Indeed, this last might be my personal preference. Looters deserve looting -- an eye for an eye.

If this is not stopped my confidence in Obama's power and wisdom will wane. I'm really quite ticked off.

I have said repeatedly Obama's sentiments are neoliberal, not progressive or even liberal. And if he doesn't ditch the neoliberalism and neoliberals like Geithner and Summers, he will fail as president.

Then we will be REALLY screwed.

Obama's Appointments

Former Harvard president Larry Summers is going to have to work overtime to restore his tarnished reputation of being a blithering, blathering sexist.

As the head of the National Economic Council, he will play two roles: counseling the president and nurturing the proposals of others. Few doubt that Mr. Summers will excel in the first; Democrats and Republicans call him one of the top economic minds in the country, with a résumé that may make him overqualified for the job.

Even Mr. Summers’s allies, though, acknowledge worries about the second part of his role. Mr. Summers, in an interview, said a crucial part of the job was exposing the president “to all possible views, developed as strongly and rigorously as they can be.”

But at Harvard, numerous faculty members and administrators say, Mr. Summers’s downfall resulted chiefly from his tendency to impose rather than persuade, to appear to have little regard for the views of others.