Political Economy category archive

Dana Garrett has a suggestion:

So what Republican and Democratic administrations have in common is that they tend to engage in optional wars, but they don’t want to pay for them through increased tax revenues. They’d rather borrow to pay for these wars regardless of its impact on the national budget.

So instead of a balanced budget amendment, I recommend an amendment to the constitution that requires Congress to raise taxes across the board whenever the nation undertakes a major military endeavor to cover the FULL cost of the military endeavor.

It doesn’t have a snowball’s chance in hell, but it does point out the absurdity of the current budget kabuki in Washington.

Follow the link to read his entire argument.

Philly dot com takes a look at foreclosures in Willingboro, N. J., one of the original Levittowns.

The foreclosure market is still going strong:

The statistics are overwhelming. About two homes a week there were lost last year in sheriff’s sales, the final and most extreme event in a foreclosure. So many people are unable to avoid foreclosure, through mediation or the private sale of their homes, that Willingboro houses accounted for 20 percent of all sheriff’s sales in 2010 in Burlington County.

In 2005, 209 foreclosure actions were filed against homeowners in Willingboro. In 2006, when the crisis hit, the number shot up 34 percent to 281, according to an analysis from American Foreclosures Inc., a firm that collects detailed foreclosure data.

Since 2005, about 2,400 foreclosures have been filed in the township of 12,000 homes, according to the analysis.

I am going to predict that the foreclosure segment of the economy is starting to weaken and that jobs created by the need to process foreclosures may be in jeopardy.

Why? Because I am starting to see commercials on television inviting Joe and Jane Viewer to call this number! or click that website! to learn how they, too, can get in on the foreclosure bonanza and pick up a houses for “as little as $1,000.00!”

I think this is the foreclosure-based economy’s equivalent to all those mailings we used to get from CountryWide and AmeriQuest, inviting us to jump on the mortgage-go-round.

Foreclosure entrepreneurs are running out of a market; they need to drum up new marks.

No doubt this will be followed by shows on cable channels with names like, “Flip This Foreclosure.” Other, lesser cable channels will follow with clones. Viewers by the twos and threes will drive ratings.

After a couple of years, pundits will start to wonder whether there is a “foreclosure bubble” that has become unsustainable.

Other pundits will argue that “God ain’t making no more foreclosures,” so the market for foreclosures should continue to thrive and grow.

And then–well, you know.

Crash.

This time, though, no one will become unemployed and homeless, because everyone who is not a CEO or hedge fund manager already will be living in tent cities and begging at freeway exits.

Coming up:

The emerging new market in tricked-out shopping carts: the latest rage in tent cities.

And a new show on the latest trend to help families make ends meet: Pimp My Bride.

Decoding the eleven dimensional chess.

Via Bob Cesca.

Alan Grayson:

If you follow the market, the market goes up every time it looks like the Republicans are going to compromise; the market goes down every time it looks like they won’t.

And that’s a very uncomfortable position for any Republican.

With government budget lines under ever increasing scrutiny, and more and more Americans losing their homes due to foreclosure, the Army has accomplished a seemingly unprecedented double whammy of bad publicity when it was revealed earlier this week that over $2 million in their 2012 budget will be devoted to the housing of three generals.

One of the projects involves improving the “official entertainment space” in the house.

Cutting social security will no doubt fix this.

In other news, LiberalGeek has 10 suggestions for reducing government expenses that are far more realistic than anything Republicans have advanced.

Still over 400k:

Applications for jobless benefits decreased 22,000 in the week ended July 9 to 405,000, Labor Department figures showed today. Economists forecast 415,000 claims, according to the median estimate in a Bloomberg News survey. The data included fewer layoffs in the auto industry than typical this time of the year, according to an agency spokesman.

Aside:

How can I get a job as one of those forecasters?

They are less accurate than astrologers and better paid.

Steve Chapman sums it up in the Chicago Trib:

There lie the crucial facts about the defense budget: 1) Washington politicians resist cutting in wartime; and 2) it’s always wartime.

This is something that has been nagging at me for some time, but I wasn’t sure how to address it. Now a letter writer to the Philly Inquirer has saved me the trouble.

When politicians complain about the cost of retirees’ pensions, they often leave out the full term: “Unfunded pension obligations.”

It’s not the pensions. It’s the politicians who refused to plan for them, but instead have used pension funds for other purposes.

Unfunded state pension plans were, from the start, a fraud on taxpayers. By paying public employees partly in unfunded IOUs, they enabled state governments to claim that their budgets were balanced when, in fact, state liabilities were increasing faster than state assets. The unfunded IOUs were a promise by the state to pay part of the salaries in the future from future tax revenues, and thus a promise to raise taxes if necessary. They were also a fraud on the employees . . . .

The situation with social security is similar.

Social Security isn’t broke; it’s looted, sacrificed to the fetish against taxes citizens paying for the services they demand from the government.

For all practical purposes, this is no change from last week:

Jobless claims fell by 14,000 to 418,000 in the week ended July 2, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments also declined.

Supply-chain disruptions from Japan’s March earthquake, European default concerns and gasoline prices that neared $4 a gallon prompted some companies in recent weeks to fire workers, further weighing on the consumer spending that makes up two thirds of the economy. Economists surveyed by Bloomberg forecast the Labor Department will report tomorrow that the unemployment rate in June held unchanged at 9.1 percent.

The decrease in persons receiving extended benefits is meaningless, as many persons are still unemployed but are aging out of benefits into destitution.

Daniel Ruth at the St. Petersburg Times writes about what he calls the “Washington kabuki.” I can’t say I agree fully with this, bit I agree mostly. I’m glad he included war defense spending. A nugget:

Aside from schlepping from meeting to meeting, if the political intelligentsia was remotely serious about tackling the national debt it would begin to admit to a few uncomfortable realities.

If you are a Democrat you will not fill a $14.5 trillion hole by simply raising taxes, unless you also are willing to fiddle around with entitlement spending on stuff like Social Security and Medicare, as well as defense.

If you are a Republican you will not address the debt problem by opposing an increase in taxes, or at least making sure wealthy people and corporations pay their fair share of the tax burden they should be paying anyway. When General Electric, which made a profit of $14.2 billion last year, paid zero in corporate taxes, something is horribly nuts.

And Wesley Snipes went to jail for not paying his taxes?

For both sides, the debt crisis won’t be solved if every time someone offers a proposal Washington’s special interest lobbies start sobbing uncontrollably while accusing the offending politico of being an anti-American sot with Marxist and/or fascist tendencies.

Follow the link. The first part of the column, in which he describes the empty ritual of Washington meetings, is a hoot.

(Link fixed.)

Had Paul Ryan offered something constructive about Medicare, he might not have turned himself into a third rail for Republican candidates.

But the public quickly realized that, ultimately, his plan was classic Republicanism: Decreasing the quantity and quality of services while turning buckets of money over to Wall Street bonus babies.

In other words, more rich richer, poor poorer.

Via Jack and Jill Politics.

The patient’s condition is unchanged.

Jobless claims fell by 1,000 to 428,000 in the week ended June 25, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments declined.

No doubt laying off more teachers will fix this.

The Republican campaign strategy continues:

Applications for unemployment benefits increased 9,000 in the week ended June 18 to 429,000, Labor Department figures showed today. The level of claims exceeded the highest estimate in a Bloomberg News survey in which the median projection called for 415,000 filings. The Bloomberg Consumer Comfort Index dropped to minus 44.9 last week from minus 44.

Stocks slumped and Treasury securities rose as the figures, combined with a drop in new-home sales, showed the recovery was struggling to gain momentum. Bernanke said yesterday that joblessness above 9 percent and weakness in housing show the economy’s “headwinds” may be stronger than Fed policy makers initially estimated.

(snip)

Purchases of new homes dropped 2.1 percent in May to a 319,000 annual rate, figures from the Commerce Department showed today in Washington. The median price of new properties sold declined from a year earlier.

Congressional Democrats seem to have become vertebrates; they’ve called out the Republican strategy:

They’ve made it explicit. Democrats are accusing Republicans of trying to sabotage the recovery — or at least stall it — by blocking all short-term measures to boost the economy, even ones they previously supported.

We’ll see how long that lasts.

Also, what Atrios said.

At the Asia Times, Ellen Brown considers how military spending is actually a drag on the economy. A nugget (emphasis added):

Why is the military’s half of the pie sacrosanct? Wasteful and unnecessary military programs get a pass from legislators because the military is also our largest and most secure jobs program, one that has penetrated into the nooks and crannies of Every Town, USA. If it were disbanded, the economy would be crippled by soaring unemployment, plant closures, and bankruptcies. Bruce Gagnon, coordinator of the Global Network Against Weapons and Nuclear Power, writes:

Most politicians understand … that weapons production is currently the number one industrial export product of the US. They know that major industrial job creation is largely coming from the Pentagon. Thus most politicians, from both parties, want to continue to support the military industrial complex gravy train for their communities.

That explains why the country seems to be permanently at war. If we had peace, the war machine would be out of a job. Every year since World War II, the US has been at war somewhere. It has been said that if we didn’t have a war to fight, we would have to create one just to keep the war business going. We have a military empire of over 800 bases around the world. What is to become of them when the lion lies down with the lamb and peace reigns everywhere?

She goes on the explore ways to move to an economy that’s not based on killing somebody somewhere day after day.

Via Leesburg Tomorrow.

Blah, blah, blah.

The truth is, there just isn’t that much of it in real terms. The real waste, fraud, and abuse are in what items are funded, not in how the funds are spent.

Click for a larger image.

Meanwhile, piles of money are set on fire in the Middle East and South Asia.

Via Some Guy with a Website.

Da mob got nuttin’ on dis racket:

When his girlfriend needed help paying rent, Travis Wood figured he could borrow $500 quickly by using his 1989 Mercury as collateral.

Fifteen minutes after turning over the car’s title to a title lender in Suffolk, he emerged with the cash his girlfriend needed.

That was in late August.

Today, Wood regrets being in such a hurry. After paying more than $700 so far for the $500, he still owes $1,265, much of it interest, and is behind on his monthly payments, he said.

If he fails to pay what he owes, the 20-year-old Suffolk resident likely will lose his car, which is essential for getting to work and running errands for his girlfriend, Wood said.

Follow the link for much more.