A Chronology of the Economic Crisis

From a commenter at Daily Kos:

1961-64 Robert Kennedy wages war against the Mob. Labor effectively defanged. Economic Elites will eventually learn that they can bitch slap labor without worrying about being slapped back. Mob and Labor part ways.

Liberalism is nothing without labor, labor, it turns out, is nothing without teeth.

1964 High Tide of Liberalism reached. Movement Conservatism formed, funded by the Economic Elites.

1970 Walter Reuther dies from mysterious plane crash.

1973 Per hour Wages peak and stagnate there after. From 1940-1973 wages grow with increases in productivity. Increasingly after this, demand increases only with increased man hours.

1980 Reagan wins election

1981 PATCO - Reagan lets labor step on the banana peel and bitch slaps labor into third tier status. From this point, Economic Elites are on the gravy train.

2001 The Blunder-man "Wrong Way" Bush commeth. For the last 27 years the growth in GNP has all gone to the economic elites (the supply side) by 2001 the economy has more than doubled over 1973 - that's trillions and trillions of dollars to the top 1% of the economy, year-in and year-out. As a result of this excess in flow of money to 'supply-side' demand is soft and beginning to shrink - creating a deflationary recession and stock bubbles (bubble result from too much money finding too little returns across the aggregate of the economy - until one little spot, like new technologies shows decent returns and then all money floods to that spot).

In the face of too much supply, in an economy based 2/3rds on demand, does Bush implement demand side economics? In a word no.

Instead, Bush pores the coals on 'supply-side' economics and by the end of his term may have pushed another 10 or 11 trillion dollars over to the supply side of the economy.

At this point the economy should contract, indeed crater, but it doesnt. Why? Bush is able to borrow cheap money from east Asia to cover his tracks as a substitute for real wage based demand. When the bills come do ... then the economy craters.

That's how we got to where we are.

Wages have to keep up with productivity to be stable. If they don't society becomes top heavy and unstable, like standing up in a duggout canoe and prone to sudden epic collapse.

Republican Economics: Screw the Workers

The great Billmon, in a diary over at Daily Kos, presents the following chart, ranked by the rate of job creation during their presidencies, of every post-war president. Notice the political party of every single person at the top of the list:



As Billmon says:

[E]ach and every Democratic President (including the much-maligned Carter) ranking ahead of every GOP president (including St. Ronnie). Draw your own conclusions.

Hard Times Deepen

The unemployment numbers are worse than projected: 7.2 Percent by the narrow measure, and 13.5 percent by the more realistic measure (as in related to actual peoples' misery).

It's getting bad out there

This backs up stories I've been hearing about the system buckling under the strain of depression, level layoffs:

Swamped by a post-holiday surge of claims from laid-off workers, New York State’s computerized unemployment insurance system shut down briefly Monday afternoon and then again for several hours on Tuesday, according to the state Department of Labor.

The system, which serves as the gateway to unemployment benefits for New York residents, could not handle the volume of calls and online inquiries it was receiving, said Leo Rosales, a spokesman for the department. As many as 10,000 people an hour tried to log into the system to file new unemployment claims or to check on existing claims, Mr. Rosales said.

Those Poor, Suffering Rich

You know, there was a time when Democrats like Harry Truman were not afraid of saying "The Republicans are the Rich Man's Party, while the Democrats are the Party of The Common Man."

Here's the thing: Fuck the rich. They've been doing just fine for the last 35 years, getting richer and richer and richer, while no one else has gotten a raise.

The top marginal tax rate during the administration of that notorious Leninist, Ike, was 91.5 percent. That is not a typo. It resulted in it not being worthwhile to make 300 times as much as your lower paid workers, because taxes would eat up the portion of your income that could be described as obscene. The fifties were not exactly a time of breadlines and hardship. There was a broad and solid middle class.

The NY Times has a story up about Washington Mutual's descent into insolvency. Money grafs:

During Mr. Killinger’s tenure, WaMu pressed sales agents to pump out loans while disregarding borrowers’ incomes and assets, according to former employees. The bank set up what insiders described as a system of dubious legality that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers, sometimes making the agents more beholden to WaMu than they were to their clients.

WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank’s executives. WaMu pressured appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.