http://www.opednews.com/articles/The-Biggest-Risk-to-the-Ec-by-Robert-Reich-120131-621.html

By Robert Reich

Consumers and investers are doing increasingly well but job insecurity is on the rise, inequality is widening, communities are becoming less stable, and climate change is worsening. None of this is sustainable over the long term.

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Treasury Secretary Tim Geithner, speaking at the World Economic Forum in Davos a few days ago, said the “critical risks” facing the American economy this year were a worsening of Europe’s chronic sovereign debt crisis and a rise in tensions with Iran that could stoke global oil prices.

What about jobs and wages here at home?

As the Commerce Department reported Friday, the U.S. economy grew 2.8 percent between October and December — the fastest pace in 18 months and the first time growth exceeded 2 percent all year. Many bigger American companies have been reporting strong profits in recent months. GE and Lockheed Martin closed the year with record order backlogs.

Yet the percent of working-age Americans in jobs isn’t much different than what it was three years ago. Yes, America now produces more than it did when the recession began. But it does so with 6 million fewer workers.

Average after-tax incomes adjusted for inflation are moving up a bit. (They increased at an annual rate of .8 percent in the last three months of 2011 after falling 1.9 percent in prior three-month period. For all of 2011, incomes fell .1 percent.)

But beware averages. Shaquille O’Neal and I have an average height of six feet. Exclude Mitt Romney’s $20 million last year — along with everyone else securely in the top 1 percent — and the incomes of most Americans are continuing to slip.

Consumer spending picked up slightly in the fourth quarter mainly because consumers drew down their savings. Obviously, this can’t last.

Meanwhile, government is spending less on schools, roads, bridges, parks, defense, and social services. Government spending at all levels dropped at an annual rate of 4.6 percent in the last quarter — and that’s likely to continue.

Some economists worry this drop is a drag on the economy. But it also means fewer public goods available to all Americans regardless of income.

Congress still hasn’t decided whether to renew the temporary payroll tax cut and extend unemployment benefits past February. If it doesn’t, expect another 1 percent slice off GDP growth this year.

Tim Geithner is surely correct that the European debt crisis and Iran pose risks to the American economy in 2012. But they aren’t the biggest risk. The biggest risk is right here at home — that most Americans will continue to languish.

All of which raises a basic question: Who or what is the economy for? Surely not just for a few at the top, and not just big corporations and their CEOs. Nor can the success of the economy be measured by how fast the GDP is growing, or how high the Dow Jones Industrial Average is rising, or whether average incomes are turning upward.

The crisis of American capitalism marks the triumph of consumers and investors over workers and citizens. And since most of us occupy all four roles — even though the lion’s share of consuming and investing is done by the wealthy — the real crisis centers on the increasing efficiency by which all of us as consumers and investors can get great deals, and our declining capacity to be heard as workers and citizens.

Modern technologies allow us to shop in real time, often worldwide, for the lowest prices, highest quality, and best returns. Through the Internet and advanced software we can now get relevant information instantaneously, compare deals, and move our money at the speed of electronic impulses. We can buy goods over the Internet that are delivered right to our homes. Never before in history have consumers and investors been so empowered.

Yet these great deals increasingly come at the expense of our own and our compatriots’ jobs and wages, and widening inequality. The goods we want or the returns we seek can often be produced more efficiently elsewhere around the world by companies offering lower pay, fewer benefits, and inferior working conditions.

They also come at the expense of our Main Streets — the hubs of our communities — when we get the great deals through the Internet or at big-box retailers that scan the world for great deals on our behalf.

Some great deals have devastating environmental consequences. Technology allows us to efficiently buy low-priced items from poor nations with scant environmental standards, sometimes made in factories that spill toxic chemicals into water supplies or pollutants into the air. We shop for great deals in cars that spew carbon into the air and for airline tickets in jet planes that do even worse.

Other great deals offend common decency. We may get a great price or high return because a producer has cut costs by hiring children in South Asia or Africa who work twelve hours a day, seven days a week. Or by subjecting people to death-defying working conditions.

As workers or as citizens most of us would not intentionally choose these outcomes but as seekers after great deals we are indirectly responsible for them. Companies know that if they fail to offer us the best deals we will take our money elsewhere — which we can do with ever-greater speed and efficiency.

The best means of balancing the demands of consumers and investors against those of workers and citizens has been through democratic institutions that shape and constrain markets.

Laws and rules offer some protection for jobs and wages, communities, and the environment. Although such rules are likely to be costly to us as consumers and investors because they stand in the way of the very best deals, they are intended to approximate what we as members of a society are willing to sacrifice for these other values.

But technologies for getting great deals are outpacing the capacities of democratic institutions to counterbalance them. For one thing, national rules intended to protect workers, communities, and the environment typically extend only to a nation’s borders. Yet technologies for getting great deals enable buyers and investors to transcend borders with increasing ease, at the same time making it harder for nations to monitor or regulate such transactions.

For another, goals other than the best deals are less easily achieved within the confines of a single nation. The most obvious example is the environment, whose fragility is worldwide. In addition, corporations now routinely threaten to move jobs and businesses away from places that impose higher costs on them — and therefore, indirectly, on their consumers and investors — to more “business friendly” jurisdictions. The Internet and software have made companies sufficiently nimble to render such threats credible.

But the biggest problem is that corporate money is undermining democratic institutions in the name of better deals for consumers and investors. Campaign contributions, fleets of well-paid corporate lobbyists, and corporate-financed PR campaigns about public issues are overwhelming the capacities of Congress, state legislatures, regulatory agencies, and the courts to reflect the values of workers and citizens.

As a result, consumers and investors are doing increasingly well but job insecurity is on the rise, inequality is widening, communities are becoming less stable, and climate change is worsening. None of this is sustainable over the long term.

Blame global finance and worldwide corporations all you want. But save some blame for the insatiable consumers and investors inhabiting almost every one of us, who are entirely complicit. And blame our inability as workers and citizens to reclaim our democracy.

http://www.opednews.com/articles/The-Biggest-Risk-to-the-Ec-by-Robert-Reich-120131-621.html

Submitters Website: http://robertreich.org/

Submitters Bio:

Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including “Aftershock,” “The Work of Nations,” “Locked in the Cabinet,” and his most recent book, “Supercapitalism.” His “Marketplace” commentaries can be found on publicradio.com and iTunes. He blogs at www.robertreich.org.

By Bernie Sanders

These are tough times for our country. We must continue to push forward. This struggle is not just about you or me or our generation. It is about the future of the country and our children and grandchildren.

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There are many short- and long-term challenges we face as a nation.

Citizens United

In the coming weeks I will step up my efforts to generate strong grassroots support for a constitutional amendment I have introduced to overturn the disastrous Citizens United Supreme Court decision of two years ago. It seems to me that there are about five people in this country who believe that a corporation is a person. Unfortunately, they are all on the Supreme Court. The result of this misguided 5-4 decision, one of the worst ever handed down by a Supreme Court, is that corporations can now spend, without disclosure, unlimited sums of money on political advertising. And we are seeing the results of that ruling right now with big money interests and Super PACs spending huge sums on television and radio advertising in the Republican primaries and in Senate races. Unless we change it, that situation will only get worse in future years.

The good news is that throughout the country grassroots activists are working hard to reclaim our democracy and defeat Citizens United. Resolutions in support of a constitutional amendment have already been passed in cities and towns all over the country including New York, Los Angeles, Boulder, Pueblo, Duluth, Oakland (CA), Albany (NY), Portland (OR), and Burlington (VT). In Pennsylvania, Massachusetts, New Mexico, Oregon, Vermont and Washington state legislators have introduced similar type resolutions.

If we value our democracy, we must all get involved in this issue — demand that our local governments and state legislatures take a stand in demanding that Congress pass a constitutional amendment to overturn Citizens United. To a significant degree, this is not a partisan issue. Most Americans, regardless of their political ideology, do not believe that a handful of wealthy and powerful special interests should be able to dominate our political process and elect — or defeat — the candidates of their choice.

Postal Reform

Another issue that I am currently working on is postal reform legislation. While this is not a very sexy issue, it is extremely important, not only for the 600,000 employees of the U.S. Postal Service, but for our entire economy.

As a result of a very onerous and unfair requirement that they pay $5.5 billion a year into a health-benefit account for future retirees, as well as a significant decline in first-class mail because of increased e-mail use, the Postal Service faces serious financial challenges. Their response has been to develop a draconian proposal which would eliminate up to 200,000 jobs by shutting down more than 3,000 small post offices as well as half (252) of their mail processing plants, and to end Saturday and next-day mail delivery.

This plan would result in a significant decline in the speed of mail delivery service and, in my view, the beginning of a “death spiral” for that vitally important agency. With a diminishment in the quality and timeliness of the services the Postal Service provides, fewer and fewer businesses and consumers will be interested in using the mail. The result will be that postal deficits will grow larger, more cuts will continue to be made, and eventually the Post Office will be a pale shadow of what it is today.

During the next several weeks I, and a number of my colleagues, will be working to improve the existing postal reform legislation, which is due to come to the floor of the Senate very shortly. Our goal will be to save jobs in the Postal Service and maintain a high quality of service. We will also be demanding that the Postal Service create a new and aggressive business model so that it can effectively compete in today’s market and increase their revenue in the digital age in which we live.

Social Security, Medicare and Medicaid

I want to alert you to an ongoing issue I have been involved with during all of my five years in the Senate. Sadly, virtually every Republican in Congress and too many Democrats are determined to cut Social Security, Medicare and Medicaid in the name of deficit reduction. This is wrong! We must not allow them to do that.

At a time when we have the most unequal distribution of wealth and income of any major country on earth, and when working people are suffering through the worst recession since the Great Depression, we must not make savage cuts to programs which maintain the well-being and dignity of tens of millions of struggling Americans. With 45,000 Americans dying each year because they don’t get to a doctor when they should, and when 50 million Americans already lack health insurance, how could anybody be calling for cuts in Medicare or Medicaid? The truth is — we should be moving toward a universal, single-payer health care system, not decimating the limited public health programs we now have in place.

In terms of Social Security, please remember that Social Security today has a $2.5 trillion surplus, can pay out all benefits owed to every eligible American for the next 25 years and, because it is funded independently by the payroll tax, has not added one penny to our national deficit or debt. Social Security must not be cut!

Yes, we need to address the deficit crisis, but there are fair and responsible ways to do that. While the rich get richer, their effective tax rate is the lowest in decades. The top 1 percent must be asked to pay their fair share of taxes. While corporations are making record-breaking profits, many of them enjoy outrageous tax-loopholes which enable them to pay little or nothing in taxes. We must end corporate tax loopholes.

Also, the United States now spends three times as much on the military as we did in 1997, and more than the rest of the world combined. We must cut wasteful military spending.

Let me conclude by thanking you for your activism in the fight for progressive values and for a government which represents all the people, and not just the wealthy and powerful. These are tough times for our country. We must continue to push forward. This struggle is not just about you or me or our generation. It is about the future of the country and our children and grandchildren.

http://www.opednews.com/articles/Can-t-Stop-Now-by-Bernie-Sanders-120131-987.htm

Submitters Bio:

Bernie Sanders is the independent U.S. Senator from Vermont. He is the longest serving independent member of Congress in American history. He is a member of the Senate’s Budget, Veterans, Environment, Energy, and H.E.L.P. (Health, Education, Labor, and Pensions) committees.

Will Obama go after Wall Street criminals?

By Danny Schechter

A word to the wise, watch what the administration does, not just what it says. Remember, as Obama hits the political hustings reborn as a “populist,” in a political environment energised by Occupy Wall Street, his “bundlers” are still pressing the flesh on Wall Street, seeking a new round of political donations.

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This article cross-posted from Al Jazeera

The latest crackdown on fraud by the Obama administration may itself be a fraud.

Like all State of the Union speeches, there was something in it for everyone.

For the patriotically correct, when it bleeds, it leads.

President Obama led his annual SOTU “report” with blood lust by bragging about how he nailed Bin Laden and sends the drones out to bag more feared terrorists than any President ever.

Go America, Repeat After Me, We’re #1!

For the military brass, there was endless pandering about their greatness and how we all need to follow their medaled chests to glory. Never mind the quagmire in Afghanistan.

Go Pentagon Forever!

For labor, there was lots of talk — there is always talk — about generating more jobs, even as unemployment stays high and remains seemingly intractable.

Go Workers: Maybe You Will Work Again!

For business, there was more talk about high tech and incentives to manufacture more in the USA.

Go Business: Do We Have Tax Breaks For You!

For Republicans, there were more outreached hands and an admission that some of his proposals were based on their ideas. The hopes for non-partisanship die hard.

Go GOP: Can’t We Just Get Along?

And for disenchanted progressives, more turned on by the Occupy Movement than the Obama re-election effort, and who have been bugging him lately for some action against Wall Street, there was finally talk of a new financial crimes unit and mortgage fraud crackdown even though task forces that have done little have existed for years.

MoveOn Email #1 Last Week:

“MoveOn is ramping up their campaign demanding that the president order a federal investigation into Wall Street’s involvement in the foreclosure crisis, and oppose a sweetheart deal that would give them immunity from investigation.”

MoveOn Email #2 This Week:

“President Obama did exactly what hundreds of thousands of us have been calling on him to do — he announced a federal investigation into Wall Street. Here’s what he said:

‘I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans…’

“The best part is, progressive champion New York Attorney General Eric Schneiderman is co-chairing the investigation and will make sure it stays on track.”

Activists were surprised when the President did not even mention Schneiderman’s name, even as he was there sitting behind his wife. He was publicly named later.

Anyone recall the president appointing Elizabeth Warren as a special assistant before he didn’t appoint her to head the consumer protection bureau she championed?

This is all symbolic politics, including a practiced maneuver called “progressive-seduction,” accompanied by Treasury Secretary Tim Geithner saying he will be going, even though when he was about to leave last year, he was pressed by Obama to stay.

But thank heaven for small favors: At last, the financial crimes issue has finally been raised prominently (Even if MoveOn did not embrace it when I brought it to them three years ago, asking for help in distributing my film Plunder on Financial Crime. I guess I was “premature.” That was well before the President hit the campaign trail again.)

The journalists who have been reporting on the issue most closely are also the most sceptical about the announced — if belated — crackdown, in part because Attorney General Holder and his chief deputy both come from law firms that represented big banks at the height of their sleaziest business practices and have shown little enthusiasm.

Writes Yves Smith on NakedCapitalism.com:

“While a large number of ‘liberal’ groups, ranging from the official Democratic party outlets (the Centre for American Progress) to ones that sometimes cross swords with the administration (MoveOn, the Working Families Party) praised the Tuesday evening announcement of mortgage ‘investigations’ with Schneiderman co-chairing the effort, others who have been watching the mortgage legal fight closely were far more ambivalent about the creation of a new unit in an initiative … which has done pretty much nothing since its creation in 2009.”

Smith was referencing this article in the New York Times:

“There is good reason to be skeptical. To date, federal civil suits over mortgage wrongdoing have been narrowly focused and, at best, ended with settlements and fines that are a fraction of the profits made during the bubble. There have been no criminal prosecutions against major players…

“There are reasons to be wary… The Times identified the two red flags. First, why are the settlement talks still proceeding? This is ridiculous if the plan is to do investigations. The fact that they have not been halted calls this exercise into question. Second, if this is supposed to be a heavyweight investigation, why hasn’t Obama set up an independent prosecutor, a role much more likely to attract the sort of kick-ass litigator that the Times correctly thinks is necessary for the job?”

A later Times story explained that many of the administration’s highly publicised housing relief programs — a GOP Senator called them a “press release collection agency” — were stunningly ineffective. In times, they met with “limited success”. Many of the cases against major fraudsters are now considered “cold” (ie unprosecutable).

These cases invariably pit the human rights of homeowners against the property rights of big lenders. Who do you think is winning?

Perhaps, that’s why Common Dreams carried an article, suggesting that this latest crackdown on fraud may itself be a fraud:

“The ‘investigation’ announcement came just as a bank-friendly ‘settlement’ is about to be announced by the state attorney generals. Reports of the settlement talks, the ‘too-big-to-fail’ banks — Bank of America, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup and Ally Financial Inc — would provide $20bn to $25bn of ‘relief’ to homeowners in exchange for being exempted from lawsuits for improper foreclosures and abuses in mortgage loans.

“The findings of the new ‘investigation’ would come after the settlement gives the banks a get-out-of-jail-free card.”

So a word to the wise, watch what the administration does, not just what it says.

Remember, as Obama hits the political hustings reborn as a “populist,” in a political environment energised by Occupy Wall Street, his “bundlers” are still pressing the flesh on Wall Street, seeking a new round of political donations.

How far will these one percent donors let him go?

Submitters Bio:

News Dissector Danny Schechter is blogger in chief at Mediachannel.Org He is the author of PLUNDER: Investigating Our Economic Calamity (Cosimo Books) available at Amazon.com. See Newsdisssector.org/store.htm.

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