Political Economy category archive

Transcript.

Lillian Vernon is closing down its operation here, though the brand name will live on:

The owner of Lillian Vernon, the catalog and Internet retailer that has called the city home for 22 years, plans to shutter its headquarters off International Parkway, citing a drop in sales.

Current USA Inc., a stationery and gifts company based in Colorado Springs, Colo., bought Lillian Vernon two years ago and employs about 200 warehouse and call center employees in Hampton Roads. It plans to wind down the Beach operation and terminate all positions there by August 2011.

My parents were on their mailing list, though I can’t recall their ever actually ordering something from them. I used to read the catalog from time to time, usually after finishing reading all the cereal boxes in the house.

I feel sorry for the employees. They didn’t have any say about what went into the catalog.

Still stalled in the high 400,000s. The long-term trends, though, are looking up:

Initial claims for state unemployment benefits dropped 24,000 to a seasonally adjusted 456,000, the Labor Department said, resuming a downward trend that had been interrupted by the Easter holiday. Markets had expected 455,000.

Stockholders and management are never responsible. It’s called fiduciary responsibility. Or something.

Delmarva Power is asking state regulators to alter the way its rates are calculated so that ratepayers — rather than stockholders — make up for pension fund investment losses during the financial market collapse in 2009.

Paul Krugman in the Guardian makes the case for financial consumer protection. Short version: “You can’t trust the banksters”:

Last October, I saw a cartoon by Mike Peters in which a teacher asks a student to create a sentence that uses the verb “sacks,” as in looting and pillaging. The student replies: “Goldman Sachs”,

(snip)

The main moral you should draw from the financial crisis, though, doesn’t involve the fine print of reform; it involves the urgent need to change Wall Street. Listening to financial-industry lobbyists and the Republican politicians who have been huddling with them, you’d think that everything will be fine as long as the federal government promises not to do any more bailouts. But that’s totally wrong – and not just because no such promise would be credible.

The fact is that, however the Goldman Sachs case is resolved, much of the financial industry has become a racket – a game in which a handful of people are lavishly paid to mislead and exploit consumers and investors. And if we don’t lower the boom on these practices, the racket will just go on

The Booman, in a separate post on the same general topic, dissects yet another Republican misdirection play:

(Republicans) don’t oppose reform because they are in the pocket of financial industry lobbyists! Heaven forbid! They are the principled ones here. It’s the Dems who want to screw the country and the little guy by helping the Big Bad Banks.

How soon these Republicans and their conservative disinformation machine want you to forget The Resolution Trust Company created up by Bush Sr. in 1989 to resolve the S & L crisis.

More recently, how quickly they want you to forget Hank Paulson and George Bush and the complete lack of oversight over TARP program that those GOP stalwarts created to bail out the banks that were “too big to fail.”

How quickly they want you to forget Paulson’s behind closed doors threats to Congress that if they didn’t pass the TARP legislation in precisely the manner the Bush administration demanded “that within 24 hours, the entire political structure of the United States would collapse.”

Add to the list another fantastic lie:
“I’m a Republican. I care about the little guy.”

It is truly amazing how much money persons can make for ruining the economy, for putting lots of folks out of work, or for providing nothing whatsoever of value (indeed, in some cases subtracting value from life).

And how little persons earn for adding value to life.

All the Easter Bunnies have been laid off:

More Americans unexpectedly filed initial claims for jobless benefits last week, in part reflecting difficulty in seasonally adjusting the data ahead of the Easter holiday.

Initial jobless applications increased by 18,000 to 460,000 in the week ended April 3, Labor Department figures showed today in Washington. The week leading up to Easter and the two weeks that follow are traditionally a “volatile time” for claims, a Labor Department analyst said, making it difficult to discern the underlying trend in applications.

The details are rather irrelevant. It’s still in the high 400,000s.

At least it’s holding steady.

This video shows why:

Taken between 1984 and 2009 by NASA’s Landsat 5 satellite, the true-color pictures document the evolution of the Hobet mine in the Appalachian Mountains.

Comment from Blue Virginia:

There’s so much anti-tax rhetoric out there, and of course almost nobody enjoys paying taxes, but Shayna Englin has a great point here that is too often forgotten – without taxes, we wouldn’t have our quality of life, our military, our police and firefighters, Social Security, Medicare, safe food, safe water, Metro, roads, bridges, airports, parks, or just about any other “common good” you can think of. Oh wait, I forgot, Glenn Beck et al. say that taxes are “socialist,” right? No, Glenn, they’re called “American.”

Aside: I wish I owed more taxes this year. That would mean that I made more money.

Via Not Larry Sabato.

Via Balloon Juice.

One of Attorneys General suing to nullify the health care bill is from the State of Washington.

He didn’t tell the governor before he filed suit. She is not happy.

She is most decidedly not happy.

Via John Cole.

A revealing insight into the thinnking of the bonus babies and how they come to believe they are Masters of the Universe.

From the beginning of the essay:

A year on from its brush with Armageddon, the financial services industry has resumed its reckless, self-serving ways It isn’t hard to see why this has aroused simmering rage in normally complacent, pro-capitalist Main Street America. The budget commitments to salvaging the financial sector come to nearly $3 trillion, equivalent to more than $20,000 per federal income tax payer. To add insult to injury, the miscreants have also availed themselves of more welfare programs in the form of lending facilities and guarantees, totaling nearly $12 trillion, not all of which will prove to be money well spent.

Wall Street just looted the public on a massive scale. Having found this to be a wondrously lucrative exercise, it looks set to do it all over again.

I’ve forgotten where I found the link. When I remember, I’ll add the credit.

From the transcript:

The fact is, it’s now been well over a year since the near collapse of the entire financial system – a crisis that helped wipe out more than 8 million jobs and that continues to exact a terrible toll throughout our economy. Yet today the very same system that allowed this turmoil remains in place. No one disputes that. No one denies that reform is needed. So the question we have to answer is very simple: will we learn from this crisis, or will we condemn ourselves to repeat it? That’s what’s at stake.

Krugman:

Back when the Cato Institute first began pushing for individual Social Security accounts, it called its push, well, The Project on Social Security Privatization. As the Bush administration got ready to make its privatization push, however, it became clear that “privatization” polled badly. So the project was renamed The Project on Social Security Choice. And Republicans began bristling at any suggestions that they were proposing privatization, calling that a slander. Really.

If you put a pig in a poke and call it a poodle, it’s still a pig.

Via TPM.

The Brits, seduced by market ideology, which claims that adding marketeers into the mix is always better, have been experimenting with their health care system.

It’s not working. Service is deteriorating, costs are increasing, and the extra money is ending up in the pockets of the marketeers.

And when the private sector does deliver clinical services, it has tended to do so at a more expensive rate than the NHS. According to the health select committee, the work carried out by the first wave of independent sector treatment centres (ISTCs) was 12% more expensive than it would have been had it been undertaken by the NHS. After its first three years of operation, the Manchester ISTC was delivering just 63% of the contracted work it had been paid for.

The business lobby insists that this is all part of the necessary birthing process of the market, but this grand design will turn us into consumers of healthcare, creating ever greater demand. Couple this problem with the fact that private investor-owned firms are profit maximisers, not cost minimisers, and you have a recipe for spiralling healthcare costs. The $2.6 trillion US healthcare system is a great example of this combination.

On the other side of the Big Pond, some persons are starting to see the light: tax people who can afford it so as to benefit the polity as a whole. Polly Toynbee discusses what over here we would call “deficit hawks”:

What we face here, which Labour has yet to find words to express, is a war between those who control the money sucked up into their own pockets, against the great majority who are the losers. This is the tidal pull of inequality that Labour tried and failed to swim against. This budget is the time to tip the balance on reward and tax towards the people. The reason the Robin Hood campaign is galloping forward so fast is that everyone but the rich wants that tide reversed. This is a totemic tax: many others are needed too.

Just as in the United States etc.

Except that, somehow, a large percentage of US citizens have been convinced that closing schools and denying health care to the sick is somehow both moral and sane, as compared to raising the marginal tax rate a few points for the persons who gave us credit default swaps.

A recipe for use by self-policing markets:

1. Bring water to boil.

2. Add books.

3. Boil until books thoroughly cooked.

Serves: One crash.

People within the bank knew this was a sleight of hand. In one exchange of emails, a senior Lehman executive wrote: “It’s basically window-dressing.” A colleague replied: “I see…so it’s legally do-able but doesn’t look good when we actually do it? Does the rest of the street do it?” One of Fuld’s top lieutenants, chief operating officer Bart McDade, referred to Repo 105 as “another drug we’re on”. A US law firm didn’t like the look of the practice, so Lehman turned to Britain’s very own Linklaters, which duly signed it off as lawful. London-based auditor Ernst & Young concurred, taking “virtually no action” when a Lehman whistle-blower, Matthew Lee, raised a red flag.

More here.

It’s helicopter unemployment: It’s just hoverin’ in the high 400Ks.

In the week ended March 6, initial claims fell to a seasonally adjusted 462,000 from a revised 468,000 in the prior week, the Labor Department said Thursday. Economists surveyed by MarketWatch were expecting claims to dip to 460,000. See our complete economic calendar.

The four-week average of initial claims – a better gauge of employment trends than the volatile weekly number – rose by 5,000 to 475,500. That’s the highest rate since late November.

But almost anything would be better than what we’ve got.

Bloomberg:

The political consensus may be that President Barack Obama’s handling of the economy has been weak. The judgment of money in all its forms has been overwhelmingly positive, and that may be the more lasting appraisal.

One year after U.S stocks hit their post-financial-crisis low on March 9, 2009, the benchmark Standard & Poor’s 500 Index has risen more than 68 percent, and it’s up more than 41 percent since Obama took office. Credit spreads have narrowed. Commodity prices have surged. Housing prices have stabilized.

Sadly, it still doesn’t seem to be reaching those who need it most. Maybe it’s the lagging indicator thingee.