The Shocking, Graphic Data That Shows Exactly What Motivates the Occupy Movement

By Les Leopold, AlterNet
Posted on October 23, 2011, Printed on October 24, 2011
http://www.alternet.org/story/152811/the_shocking%2C_graphic_data_that_shows_exactly_what_motivates_the_occupy_movement

What are the Occupy Wall Street protesters angry about? The same things we’re all angry about. The only difference is the protestors turned their anger into public action. Occupy Wall Street lit the embers and the sparks are flying. Whether it turns into a genuine populist prairie fire depends on all of us. 
Now is not the time for wonky policy solutions, as the media meatheads are calling for. Rather, it’s time to air our grievances as loudly as possible, which is precisely what Wall Street and its minions fear the most. Here’s a brief list of why we should be angry and the charts to back it up.
1. The American Dream is imploding...  


(click for larger version)
The productivity/wage chart says it all. From 1947 until the mid-1970s real wages and productivity (economic output per worker hour) danced together. Both climbed year after year as did our real standard of living. If you’re old enough, you will remember seeing your parents doing just a bit better each year, year after year.  Then, our nation embarked on a grand economic experiment. Taxes were cut especially on the super-rich. Finance was deregulated and unions were crushed. Lo and behold, the two lines broke apart. Productivity continued to climb, but wages stalled and declined. So where did all that productivity money go? To the rich and to the super-rich, especially to those in finance.
2. Our wealth is gushing to the top 1 percent...

(click for larger version) Actually the top tenth of one percent. Because of financial deregulation and tax cuts for the rich, the income gap is soaring. Here’s one of my favorite indicators that we compiled for The Looting of America. In 1970 the top 100 CEOs earned $45 for every $1 earned by the average worker. By 2006, the ratio climbed to an obscene 1,723 to one. (Not a misprint!)
3. Family income is declining while the top earners flourish...

(click for larger version) As women entered the workforce, family income made up for some of the wage stagnation. But now even family incomes are in trouble. Meanwhile, the incomes of the richest families continue to rise. 
4. The super-rich are paying lower and lower tax rates...

(click for larger version) To add financial insult to injury, the richest of the rich pay less and less each year as a percentage of their monstrous incomes. The top 400 taxpayers during the 1950s faced a 90 percent federal tax rate. By 1995 their effective tax rate – what they really paid after all deductions as a percent of all their income – fell to 30 percent. Now it’s barely 16 percent. 
5. Too much money in the hands of the few combined with financial deregulation crashed our economy...

(click for larger version) When the rich become astronomically rich, they gamble with their excess money. And when Wall Street is deregulated, it creates financial casinos for the wealthy.  When those casinos inevitably crash, we pay to cover the losses. The 2008 financial crash caused eight million American workers to lose their jobs in a matter of months due to no fault of their own. The last time we had so much money in the hands of so few was 1929!
6.  We’re turning into a billionaire bailout society...

(click for larger version) We bailed out the big Wall Street banks and protected the billionaires from ruin. Now we are being asked to make good on the debts they caused, while the super-rich get even richer, some making more than $2 million an HOUR! It would take over 47 years for the average family to make as much as the top 10 hedge fund managers make in one hour. 
7. The super-rich still control politics...

(click for larger version) Both political parties are occupied by Wall Street. For nearly an entire generation they have competed with each other to gain campaign contributions in exchange for tax breaks and regulatory loopholes for the richest of the rich. Today’s so-called financial reforms are porous, while the money continues to flow to both parties.  
8. Unemployment is a catastrophe...

(click for larger version) The reckless gambling on Wall Street tore a hole in the economy sending millions to the unemployment lines. Wall Street caused the enormous spike in unemployment and no one else – not the government, not home buyers, not China.
9. Our prospects for the future are growing dim...

(click for larger version) It’s bad enough that unemployment is sky-high. But it’s even worse when you can’t find a job for months, even years. Right now the number of unemployed for 26 weeks or more is at record levels. Many of the long-term unemployed will never work again.
10. The big banks are getting even bigger...

(click for larger version) Too big to fail is alive and well. Our nation’s biggest banks are growing larger and larger with no end in sight. Despite what politicians say, the taxpayer will bail out the big banks again. And the big banks know it.
Stand up and be counted!
Americans are a patient people. Mass movements do not form very often. Most of us hoped that after the crash, the big banks would be broken up, the casinos would be shut down and the gamblers would be punished. At the very least, we expected that the elite financiers would pay for the damage they created – the jobs destroyed, the neighborhoods wrecked, the services cut. It didn’t happen. Finally something clicked. A small number of kids stood up and got noticed. And now it’s growing. We see an outlet for our frustration, our justifiable anger, our disappointment in leaders who sold out.
We don’t know where it’s all going. But this is the time to stand up and be counted – literally. The currency of a populist revolt is numbers in the street. Let’s show our anger where it will be seen. And let us take heart from the words of Franklin Roosevelt who during his first inaugural address in 1933, led the first occupation of Wall Street: 

Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
True, they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money.
Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored conditions. They know only the rules of a generation of self-seekers.
They have no vision, and when there is no vision the people perish.
The money changers have fled their high seats in the temple of our civilization. We may now restore that temple to the ancient truths.
The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money, it lies in the joy of achievement, in the thrill of creative effort.
The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow-men.
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be values only by the standards of pride of place and personal profit, and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing.

Les Leopold is the executive director of the Labor Institute and Public Health Institute in New York, and author of The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity—and What We Can Do About It (Chelsea Green, 2009). 

America's animal farm

Deregulation mania has led to unsafe drugs, a financial crisis, and even a mass escape of dangerous animals in Ohio.

Cliff Schecter Last Modified: 24 Oct 2011 12:29

Bayer's product, Yaz, was marketed as a safe birth control option, but in reality presents many health risks [EPA]

I write this during what might well be the final days of our existence, as it seems the good Reverend Harold Camping has revised his earlier prediction of The End Of Times. As his views would place him comfortably in front of a podium and in the mainstream of any of the every-hour-on-the-hour Republican presidential debates, I'm not entirely convinced he's wrong about a coming apocalypse.

It's also hard to question a general prognostication of doom a day after 56 exotic animals were released into the countryside by the owner of a "private zoo" in Ohio, just before he shot himself to death. In a scene that Director Emeritus of the Columbus, Ohio Zoo and television personality Jack Hanna compared to "Noah's Ark", endangered Bengal tigers, grizzly bears, monkeys, and a variety of other animals - 49 in all - were killed en masse by law enforcement.

Make no mistake - this happened because Ohio is one of a handful of states that does not regulate the sale and ownership of exotic animals, and it has been purposefully made that way. Tea Party-sympathiser-cum-Governor John Kasich, upon his election to that office, began his assault on government by letting an executive order expire that had provided actual restrictions concerning who could own and sell these animals in the Buckeye State.
To Kasich, this kind of crazy Hobbesianism would "hurt small business", which presumably includes the particular lunatic who had done jail time for illegal possession of firearms and was cited multiple times for animal abuse - but still had his Animal Farm up and running in Ohio - until he granted his boarders amnesty. Because of the anti-regulation zealots who have taken control of our political culture and institutions, this was the profile of someone still fit to continue to lord over a coterie of dangerous and endangered species, in his own little Jurassic Park.

As Darth Vader would say, "Impressive. Most impressive."

Now if you were to ask the Don King of pizza, Herman Cain, I'm sure he'd have a simple plan to solve this problem, which would probably include a number of 9s and the assumption that Zanesville, Ohio is somewhere in the vicinity of Chiang Mai. But for those of us with a beyond-Perry intellect, the story is as simple as it is sadly quotidian. What led to the death of these exotic animals is the same insanity that crashed Wall Street and allows drug companies to lie to people while killing them: the mass deregulation of America.

If you think the animals have run wild in eastern Ohio, then take a look at what a-not-quite-as-evolved species did on Wall Street, resulting in thousands of zookeepers finally showing up to occupy this land those on "The Street" thought was theirs to defile and despoil.

From the 1980s onward, when we started to "get government of our backs", as Ronnie liked to say, we created a mess that now has awoken 99 per cent of the people who generally can't spare the pocket change for a $10,000 Tiffany towel rod. The apogee of this idiocy was the Gramm-Leach-Bliley Act, which in 1999 repealed one of the great accomplishments of the New Deal, the Glass-Steagall legislation separating commercial and investment banks.

Led by muppet look-alike former Senator Phil Gramm, his right-wing brethren on Capitol Hill, and former Clinton Treasury Secretary Bob Rubin and his band of merry Rubinites (the same economic team advising President Barack Obama), this legislation, perhaps more than any other, created a Celebrity Poker atmosphere on Wall Street. The Securities and Exchange Commission, as a result, pretty much became a stop in the revolving door for Wall Streeters left to self-govern.

That may or may not have something to do with why the Bush and Obama administrations have worked hard not to make anyone not named Madoff pay for their extraordinary crime of destroying our economy. For that, in common Washington parlance, would be "looking backwards".
Dangerous drugs

And of course, no deregulation horror story would be complete unless a big pharmaceutical company was poisoning people due to the Federal Drug Administration's (FDA's) lack of a will or a way. For that we have Bayer, the makers of birth-control pill Yaz, to thank.

This past week Nightline ran a scathing report on the company's over-marketed, under-tested (which is to say, not much at all) birth-control product, which increases a woman's chance of getting an embolism by a healthy 630 per cent. In the past, only listening to Rush Limbaugh could accomplish that.

"[Yaz spent] 10 times the amount marketing this pill than they did testing whether it would kill people." - Mike Papantonio, plaintiff's lawyer

Preeminent plaintiff's lawyer Mike Papantonio (of Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor), who is fighting for many of the victims of this corporation (or person or whatever status we're granting them this week) pointed out to me that Yaz spent "10 times the amount marketing this pill than they did testing whether it would kill people, and even committed such marketing fraud in the process that the toothless FDA ordered them to stop lying in their ads."

The problem is that massive deregulation has turned the project of letting the FDA regulate pharmaceuticals into something that is pretty much akin to paying Alex Rodriguez to hit a ball in the playoffs, or electing Rick Santorum the mayor of Fire Island.

Until 1997, the FDA did not even allow broadcast advertisements for prescription drugs, and the US is one of only two countries in the world (New Zealand being the other) that even allows this type of advertising. It seems that other developed nations have this crazy idea that you should decide what prescriptions you need based on a doctor's advice, and not that of a talking bee on television.

As of 2003, over $3bn per year was being spent on mass media pharmaceutical advertising. It is almost enough to make you puke - if one of their pills is not already causing you to do that.

For just like Wall Steet's nefarious machinations and lions, tigers, and bears running rampant through Ohio, this is the result of a generation of madness: The Right has continued to decry all regulation as the body count has mounted. Meanwhile, the Left has often simply kept quiet, or even joined the parade.

As Papantonio told me about Yaz, "Here is the simple fact: You've made something that is killing people pay off. Bayer has been found guilty of multiple felonies and they are still treated as if they are credible - because we simply slap them on the wrist for the carnage they cause."

While Papantonio was only speaking about a drug company here, that seems like a pretty solid overall summary of what the deregulation of America has achieved over the past generation.
Cliff Schecter is the President of Libertas, LLC, a progressive public relations firm, the author of the 2008
bestseller The Real McCain, and a regular contributor to The Huffington Post.

News: Iraqi Troop Withdrawal Quick Links

by God's Politics Editor 10-21-2011 02:45 pm

REUTERS/AP/NEW YORK TIMES: U.S. Troops to Leave Iraq by Year’s End, Obama Says

President Barack Obama said on Friday the United States will fulfill its pledge to pull troops out of Iraq by the end of the year. “As promised, the rest of our troops in Iraq will come home by the end of the year. After nearly nine years, America’s war in Iraq will be over,” Obama told reporters.

Learn more HERE

MSNBC: End Of War In Iraq Is Major Promise Kept For Obama

President Barack Obama’s announcement Friday that all U.S. troops would leav Iraq by the end of 2011 marks the fulfillment of a major political promise Obama had made on the 2008 campaign trail.

The president announced his decision at an early afternoon press conference at the White House. It’s in keeping with the timeline Obama first established in early 2009, when he first laid out a timetable for withdrawal.

Learn more HERE

THINK PROGRESS: Obama: ‘After Nearly Nine Years, America’s War In Iraq Will Be Over’

After nine years of war and nearly a year of back and forth about whether the United States would keep troops in Iraq past the year-end total withdrawal deadline, this afternoon, President Obama announced that all U.S. troops in Iraq will come home by the end of this year. “Today I can say that our troops in Iraq will definitely be home for the holidays,” he said.

Learn more HERE

THE FOUNDRY: Withdrawal from Iraq and Obama’s Middle East

The word is out that all U.S. troops will be withdrawn from Iraq by the end of the year. While every American shares the conviction that we don’t want any U.S. troops stationed in a Middle East country a day longer than they need to be, it is tragic to see a premature exit of U.S. troops that might jeopardize the progress that has been made in Iraq.

Learn more HERE

THE HUFFINGTON POST: Obama Announces Iraq Troops Will Be Withdrawn By End Of 2011

WASHINGTON — Fulfilling a long-held campaign promise, President Barack Obama announced Friday that he will pull all U.S. troops out of Iraq by the end of the year, as conditioned by the Status of Forces Agreement with the country. “As a candidate for president, I pledged to bring the war in Iraq to a responsible end,” Obama said. “So today I can report that, as promised, the rest of our troops in Iraq will come home by the end of the year.”

Learn more HERE

FIREDOGLAKE: President Obama Announces Full Withdrawal of US Troops from Iraq

The President has announced the full withdrawal of US military troops from Iraq. This was put out a week ago unofficially, and then Defense Secretary Leon Panetta (who’s a terrible Defense Secretary, by the way) tried half-heartedly to walk it back. But the decision has now been made.

Learn more HERE

AMERICA BLOG: Breaking: Obama says All US troops are leaving Iraq by the end of the year

Okay, that was a surprise. Have to admit, I never thought it would happen. As lousy as the economy is going, I have to say that Obama has wrapped up some darn good foreign successes over the past year.

ABC’s Jake Tapper tweets, “WH says 4-5,000 security contractors will remain in Iraq.” Sounds like Blackwater. I’d like to see the cost of that.

Learn more HERE

THE ATLANTIC: Obama Announces End of Iraq War, All Troops Gone by 2012

President Obama announced the complete withdrawal of all remaining troops from Iraq by the end of 2011. “As a candidate for president I pledged to bring the war in Iraq to an end,” the president said Friday, speaking from the White House.

Learn more HERE

REAL CLEAR POLITICS/TALKING POINTS MEMO: Obama Announces U.S. Troops Will Leave Iraq By End Of Year

President Obama: “As a candidate for president, I pledged to bring the war in Iraq to a responsible end for the sake of our national security and to strengthen American leadership around the world. After taking office, I announced a new strategy that would end our combat mission in Iraq and remove all of our troops by the end of 2011. As commander in chief, ensuring the success of this strategy has been one of my highest national security priorities. Last year, I announced the end to our combat mission in Iraq, and, to date, we have removed more than 100,000 troops. Iraqis have taken full responsibility for their country’s security. A few hours ago, I spoke with Iraqi Prime Minister Maliki. I reaffirmed that the United States keeps its commitments. He spoke of the determination of the Iraqi people to forge their own future. We are in full agreement about how to move forward. So, today, I can report that, as promised, the rest of our troops in Iraq will come home by the end of the year. After nearly nine years, America’s war in Iraq will be over.”

Watch video of President Obama’s announcement HERE.

MEDIA MATTERS/FOX NEWS: Fox Anchor Reacts To Obama’s Statement On Iraq Withdrawal: Why Not The East Room Or Someplace Else?

Tea Partiers: The self-hating 99 per cent

Although the Tea Party and Occupy movement share surface similarities, they represent opposite world views.

The Tea Party and 'Occupy' movements are both angry, but for very different reasons [GALLO/GETTY]


I suppose it was inevitable that the burgeoning Occupy Wall Street movement would be compared with the Tea Party, but the level of misunderstanding and myth surrounding the latter's "populist" bona fides is surprising to even the most cynical observer.
There may be surface similarities between the two uprisings, but they actually represent two opposing populist worldviews, whose only philosophical resemblance to one another is their belief that they speak for "the people" against the elites. While both movements are mainly concerned with economic issues, their beliefs about the causes and solutions they propose couldn't be more different.

One of the central myths about the Tea Party is that it came about as a reaction against the Wall Street bailouts. It's true that there were some scattered "Tea Parties" around the Ron Paul campaign in 2008, but virtually everyone agrees that the movement was really galvanised by a famous rant from CNBC anchor Rick Santelli from the trading floor of the Chicago commodities exchange.
Only one month into the Obama administration, Santelli called for a "new Tea Party" to be held on tax day, April 15, and it became an instant YouTube sensation and rallying cry for the right wing.

He was mad about bailouts alright, but not the Wall Street bailouts. What sparked his fury was the proposed plan to help average homeowners in trouble with their mortgages. Santelli raved: "Do we really want to subsidise the losers' mortgages? This is America! How many of you people want to pay for your neighbour's mortgage? President Obama, are you listening? How about we all stop paying our mortgages! It's a moral hazard."

"Do we really want to subsidise the losers?" - Rick Santelli, CNBC anchor

Here's how his colleague Lawrence Kudlow characterised the outburst: "Santelli called for a new Tea Party in support of capitalism. He's right."
Support for capitalism - and antipathy toward government interference in it - is the very essence of Tea Party populism. There wasn't much talk about the moral hazard of a "too big to fail" banking system but there was plenty of fulminating about government interference in "the market" and righteous anger about the stimulus plan and what they characterised as the "government takeover" of the healthcare system.
It was never about corporate greed, but was about the usual right wing resentment at the government spending their tax money on people they don't think have earned it. These are not billionaire bankers - they are the people on the lower rungs of the ladder. Unsurprisingly, this attitude turned out to be useful to corporate interests looking to allay any real populist impulses among the citizenry, and they soon moved in through various means to help the "movement" organise itself.
Contrary to various accounts surfacing lately ostensibly to warn the Occupy Wall Street supporters of the dangers of being similarly "co-opted" it was a very happy love match, not a marriage of convenience.
Occupy Wall Street, on the other hand, while being endlessly harrangued by wags and pundits about its alleged lack of goals and lists of grievances, is actually focused pretty clearly on the same thing as the populists of the Gilded Age - those whom Teddy Roosevelt called the "malefactors of great wealth".
Their rallying cry is "we are the 99 per cent" which represents the huge number of those of us who have been treading water or losing ground over the past 30 years, while and the upper one per cent of the population swallows up more and more of the nation's wealth. This shocking income inequality is finally reaching a critical mass that is animating the OWS movement.


Indifference of the rich
This movement wasn't catalysed by a wealthy commentator issuing a cri de guerre on a stock market show on TV. There has been a growing anti-corporate populist critique on the left for nearly 20 years, first in the form of the anti-globalisation movement and more recently in the more mainstream response to a series of assaults on workers' rights, notably in Wisconsin and Ohio.
The arrogant indifference of the very rich to the carnage they left behind in the wake of their spectacular meltdown in 2008, and the apparent impotence of democratic institutions to hold them to account, has finally mobilised the masses.

'Occupy' protests go global

There is a sub-text that ties plutocratic venality and greed to the political process, but the latter is as much a symptom as a cause. Money has always been influential in politics (and probably always will be), but the corporate takeover of US politics that culminated in the Citizens United decision created a money race that may have led to mutually assured destruction of both parties. All that money bought an economic downturn that continues to plague the lives of average Americans, and Occupy Wall Street is pointing a finger right at the source of the problem. It's right there in the name.

Historian Michael Kazin, author of The Populist Persuasion: An American History, says: "Right-wing populists typically drum up resentment based on differences of religion and cultural style. Their progressive counterparts focus on economic grievances. But the common language is promiscuous - useful to anyone who asserts that virtue resides in ordinary people and has the skills and platform to bring their would-be superiors down to earth."
There was a time when left populism was powerful and vibrant, driven by a workplace-centered labour movement that appealed across many of the usual political fault lines and resulted in the enactment of the New Deal, out of the ashes of the Great Depression.
The egalitarian ideas that underpinned that great achievement stood for many decades as the middle class, buoyed by its success, grew to be broad and deep. And that, perversely, led to the opening for the cultural and racial resentment that characterises right wing populism.
Once the left moved to broaden its economic gains to include traditionally marginalised members of society, the right reacted. Strongly. It not only blamed those minorities, but held "pointy-headed liberals" who championed their cause in deep disregard.
After the cultural revolution of the 1960s, this disregard morphed into outright contempt. And that right wing cultural populism has been dominant in the US for the past 40 years, providing cover for the rise of corporatism and the income inequality it buys for the wealthy.
It might be best represented in the person of ex-Governor of Alaska, Sarah Palin, who responded to the question of whether she was smart enough to be president by saying: "I believe that I am because I have common sense, and I have, I believe, the values that are reflective of so many other American values. And I believe that what Americans are seeking is not the elitism, the kind of spinelessness, that perhaps is made up for with some kind of elite Ivy League education ..."


A clueless revolt?
One would think that the Tea Party and Occupy Wall Street could at least find common ground in their mutual indictment of the political process, however differently they see the cause. But so far, the Tea Party groups are having none of it. The cultural trip wires that have animated rightwing cultural resentment for at least the past 40 years are still powerful motivators - after all, the Rick Santelli rant was based upon resentment of "losers" who needed help with their mortgages.
In recent days, many of them have issued statements denying any similarities with the Occupy Wall Street. Judson Phillips, spokesman for the Tea Party Nation, responded to the claim with this: "The clueless revolt continues and it is painfully obvious those who are showing up to 'protest' do not have a job. In most cases, it is painfully obvious why they don't have a job. To paraphrase the Jimmy Buffett song Margaretville: 'It's your own damn fault'."
Brian Hickey of the Independence Tea Party was somewhat less flippant but equally unequivocal in his rejection of Occupy Wall Street: "The idea that Wall Street is the root of all evil is an anathema to us."

More from Heather Digby Parton:

A voice of reason amid the madness The class warfare the rich don't understand

I'm not sure that the Occupy movement's populism sees Wall Street as the root of all evil, but it does see its reckless destructiveness and craven hoarding of the nation's wealth as the root of our current national distress. Tea party populism, on the other hand, sees an active government that seeks to redistribute some of Wall Street's wealth (to the wrong people) as the problem.
It is very hard to imagine that these movements will find common cause. They may both believe that "virtue resides in ordinary people" and that they have the skills and platform to "bring their would-be superiors down to earth" but their definition of who is ordinary and who is superior is radically different.

The United States has always featured these two different sides of the populism coin and it's tempting to see the two movements arising in virtually the same political moment as representative of a vast uprising of common people in common purpose.
But while it is vast, and masses of common people are rising up, they are two separate movements with very different worldviews.
 
If one is to take Tea Partiers at their word, they have thrown in with Wall Street and the Occupiers are their enemy. They are already organised around opposing them. The Occupy Wall Street movement does not see the world in such terms.  If they are lucky, some of the formerly hostile salt-of-the-earth working folk who might have opposed them on cultural grounds in the past have been radicalised by Wall Street's greed and will join the occupation.
But I wouldn't count on too many of them. This is a political and cultural fault line that runs deep. But then again, in this polarised country, all it takes is a few to cross over and make a majority.

The men who crashed the world

The first of a four-part investigation into a world of greed and recklessness that led to financial collapse.

Meltdown Last Modified: 20 Oct 2011 11:34

In the first episode of Meltdown, we hear about four men who brought down the global economy: a billionaire mortgage-seller who fooled millions; a high-rolling banker with a fatal weakness; a ferocious Wall Street predator; and the power behind the throne.
The crash of September 2008 brought the largest bankruptcies in world history, pushing more than 30 million people into unemployment and bringing many countries to the edge of insolvency. Wall Street turned back the clock to 1929.

In depth coverage of US financial crisis protests

But how did it all go so wrong?
Lack of government regulation; easy lending in the US housing market meant anyone could qualify for a home loan with no government regulations in place.
Also, London was competing with New York as the banking capital of the world. Gordon Brown, the British finance minister at the time, introduced 'light touch regulation' - giving bankers a free hand in the marketplace.
All this, and with key players making the wrong financial decisions, saw the world's biggest financial collapse.

Meltdown is a four-part investigation that takes a closer look at the people who brought down the financial world. Click here for more Meltdown. Meltdown Read More Eurozone debt and divisions Central banks take action to calm markets Q&A: US debt ceiling Wall Street: A blunder or a crime? A global financial tsunami Meltdown examines how an epidemic of fear caused banks to stop lending, triggered protests and led to industrial action. Meltdown Last Modified: 20 Oct 2011 11:37 GMT Paying the price As the toll of the financial crisis continues to mount, many are looking for its true causes - and finding a crime. Meltdown Last Modified: 20 Oct 2011 11:40 GMT After the fall Some responded with denial, others by re-thinking capitalism, but who is preparing for the next crisis? Meltdown Last Modified: 20 Oct 2011 11:42 GMT

Sept 21, 2011,,,hmmmmmmmm

I am here to let my followers know that my knee surgery was a walk in the park.  Now the hard part is the physical therapy, that should divide the men from the mices, i might be somewhere in between.  hahahaha.  T  his forced rest period, is helping, and putting a crystal clear light on what I want to do with my blog when I get back to it.  Let me know how you regurgitated  the republicans stance on President Obama's speech on deficit reduction, the super 12, and their cutting programs, and what are your opinions on the Republican delegates for the race for President.  Take care I will check back to see if I get any comments........

Apology for the inconvenience

For all those who are following me and my blog, I regret to announce that I will be taking a very long vacation, ordered by my doctor.  My stress level after doing this political blog for nearly three years has taken a toll on my health.  I do apologize for the inconvenience, I will also be undergoing surgery in September.  And then three months of intense therapy, yikes, with Genghis Kahn at least that is what I call him. 
Look for me around New Years where a new start may be promising for the old girl.  

How Obama Can Win The Fall

• permalink

9 Aug 2011 01:17 PM

I rather liked this tart assessment by the Economist's Lexington columnist on what has just happened in American politics:

The president, it is true, did not lose the fight because he lost the argument. He lost because he was not willing to be as reckless as the Republicans.

And yet s/he notes that the appearance of losing even a skirmish is still damaging. The far right is busy piling on insult after insult, and blaming Obama for the downgrade and other idiocies. They sense blood in the water. But that they wielded the stability of the entire global economy for a petty, short-term adrenaline shot tells you all you need to know about their fitness to govern. They are unfit to run a lemonade stand.

But it seems also clear to me that the crucial fight - presaged by the debt ceiling nonsense - is still to be had in the next few months. This was a skirmish on which the president's ideological opponents exhausted their heaviest leverage. Now, both sides are equal, and my worry is that Obama, advised by the same people who thought it was wise to duck the debt issue head on in the SOTU and budget, will let the Congress take (or not take) the lead again. Yes, the Congress needs to do this. But there is also an obvious way for Obama to use his bully pulpit to push the Super-Committee toward success. There's a way to fuse his core messages: that he wants long-term fiscal reform that is balanced; that we can get past the red-blue culture war through pragmatism; and that we can and must restore confidence in the economy now.

The answer is tax reform. It's clear that the GOP is resistant to any raising of taxes of the sort that is scheduled to occur in December 2012. And Obama, for reasons to do with keeping demand alive at all in this period, has conceded the logic that raising anyone's tax rates in a de facto recession is risky. So change the subject to a positive proposal: Reagan-style tax reform that is revenue positive.

In my view, Obama should focus on this in stump speech after stump speech in the fall. Let the country know where he stands with a specific position that is good for all of us and very resonant with Independent voters and Obamacons. Here's the gist:

We all know we have to tackle this deficit and this debt or it will keep on tackling us. But we need a balanced approach of more revenue and less spending to make anything like the progress we need. At the same time, we have a tax code of grotesque complexity, riddled with loopholes that allow the rich to get away with evasion, while working families struggle to make ends meet.

I propose a solution that slashes the debt, lowers tax rates, and sends the corporate lobbyists back under the rocks whence they came. By ending or phasing out all the loopholes and economic micro-management, we can reduce rates while we increase revenues. Reagan's Grand Bargain is the model. I implore the GOP to come together, to keep tax rates low, while raising the revenues necessary to balance the budget. I am prepared to put entitlements on the table; the GOP must be prepared to put defense on the table; but together we can agree on tax reform in the great bipartisan tradition of Ronald Reagan.

Keep it simple; make it look like the deus ex machina that really does square our ideological circles (because it does!); frame it as a natural outcrop of your core 2008 message that we need both right and left to succeed as a country and this crisis demands shared sacrifice and compromise on both sides. Explain that there are some things we cannot avoid: the catastrophic legacy of Bush, the European sovereign debt crisis, the Fukushima disaster. But note what we can also now do. Decline is not a fate; it's a choice. and radical reform of taxes will reduce the debt, undermine the lobbyist culture in DC, and level the taxation playing field between rich and poor. All the while reducing tax rates to improve the incentives for hard work that will create jobs. Cite Krauthammer in the red states.

Don't muddy the issue. And keep it simple and repeat it again and again: tax reform, not tax rate hikes. In my view, that should have been the core of the last SOTU. In the greatest error of his presidency (apart from Libya), Obama played the Washington game. He was elected not to play that game. He was elected to tackle the profound challenges we face with practical solutions.

And to those who believe we can never break this cycle of partisan warfare and political gridlock, raise the banner once more, and repeat after me: Yes. We. Can.

(Photo: U.S. President Barack Obama pauses as he makes a statement at the State Dining Room of the White House August 8, 2011 in Washington, DC. Obama spoke on the economy, S&P downgrade and the loss of Navy SEAL members in Afghanistan. By Alex Wong/Getty Images.)

The Man Who Predicted This Crash

BY

Prabhat Sakya

9 August 2011

Nouriel Roubini has been proven right once again.

At this most difficult of times it is not surprising that we are getting deluged with opinions. Some people are telling us to buy, some are telling us to sell, and some are telling us to sit tight -- they can't all be right.

In the search for the best answer, wouldn't it make sense to listen to someone who has a track record of getting these calls right? But what if this person's views are negative, so negative in fact that he is typically derided as a 'doom-monger'? Should you reject his views as too extreme, or should you take a deep breath, suspend your disbelief, and listen?

Dr Doom

Well, the person I am talking about is Nouriel Roubini. Of Turkish origin, he is not short of intellect, being a professor of economics at New York Stern with a doctorate from Harvard. His bearish tendencies have gained him the nickname 'Dr Doom'.

During his long academic career, Roubini spent a considerable amount of time studying the emerging market crises in Asia and Latin America. In particular, he worked at the IMF in 2001 as it battled the financial meltdown in Argentina.

These experiences were crucial in his calling the credit crunch. "I've been studying emerging markets for 20 years, and saw the same signs in the US that I saw then, which was that we were in a massive credit bubble," he said.

Calling the crunch

On 7 September 2006 Roubini stood before an audience of economists at the IMF and announced that a crisis was brewing. He warned that, in the coming months and years, the United States would suffer a massive housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession.

He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of pounds worth of mortgage-backed securities unravelling worldwide and the global financial system shuddering to a halt. These developments would cripple or destroy hedge funds, investment banks and other major financial institutions.

After his presentation people were dismissive -- the moderator of the event even joked, "I think perhaps we will need a stiff drink after that." Two years later, I don't think anyone was laughing. You don't need me to tell you Roubini was shown to be on the money in spectacular fashion.

Roubini's success in predicting the credit crunch turned him from an obscure academic to a major figure in the debate about the world economy. He had become a prophet: a prophet of doom.

Predicting the crisis of 2011

So fast forward to 2010. Despite recovering economies and stock markets, Roubini said that the crisis was not over: "We are just at the next stage. This is where we move from a private to a public debt problem... We socialised part of the private losses by bailing out financial institutions and providing fiscal stimulus to avoid the great recession from turning into a depression. But rising public debt is never a free lunch, eventually you have to pay for it."

Then, in May 2010, the first Greek debt crisis hit. Here was Roubini's take on the situation: "We have to start to worry about the solvency of governments. What is happening today in Greece is the tip of the iceberg of rising sovereign debt problems in the eurozone, in the UK, in Japan and in the US. This... is going to be the next issue in the global financial crisis."

Roubini had called the financial crisis, the second leg of the Credit Crunch, that is just emerging at the moment.

So, what next?

So, you may be interested in hearing what Nouriel Roubini is predicting right now.

Firstly, is the US and Europe's economic slowdown just a 'soft patch', or is it something worse?

Roubini is clear -- we are likely to enter a second recession. "The first half of 2011 showed a slowdown of growth -- if not outright contraction -- in most advanced economies. Optimists said this was a temporary soft patch. This delusion has been dashed. Even before last week's panic, the US and other advanced economies were odds-on for a second severe recession."

What about the European debt crisis? "...the eurozone periphery is now contracting, or barely growing at best. The risk that Italy or Spain -- and perhaps both -- will lose access to debt markets is now very high. Unlike Greece, Portugal and Ireland these two countries are too big to be bailed out."

So what can we do? Well Roubini recommends short-term fiscal stimulus, rather than the fiscal tightening that is occurring in most countries, followed by medium-term fiscal austerity. He also recommends further quantitative easing and the European Central Bank cutting interest rates to zero.

Perhaps most revealingly, he says: "Another recession may not be preventable. But policy can stop a second depression. That is reason enough for swift and targeted action."

Now, everyone is fallible, and Roubini has got some of his calls wrong in the past, but I am minded to agree with his view that things are going to get worse before they get better. I don't know about you, but I am battening down the hatches.