Review: The Betrayal of the American Dream

Book Review: The Betrayal of the American Dream.  (2012)

By Duane Campbell

            The team of Barlett  and Steele have  produced excellent journalism in the past, and they have done it again with The Betrayal of the American Dream, (2012) an analysis of the pain caused by the economic crisis for everyday people.  This is a well written, readable book on the economic crisis and the 30 years of looting by corporate America that led to the crisis.

            The writers clearly place blame on the aristocracy saying, “ Only once before in American history, the nineteenth-century era of the robber barons, has the financial aristocracy so dominated policy and finance. Only once before has there been such an astonishing concentration of wealth and power in an American oligarchy.  This time it will be much harder to pull the country back from the brink.”

            A great benefit of the book is that it is readable.  They  tell stories and give examples of crises in families and for workers. For example they begin the important description of the outsourcing of jobs with this,

            “On the last day on the job Kevin Flanagan, after clearing out a few personal effects and putting them in boxes in the back of his Ford Ranger, left the building where he’d worked for seven years.  He settled into the front seat of his pickup truck on the lower level of the company garage, placed a twelve-gauge Remington Shotgun to his head, and pulled the trigger.

He was forty-one years old.  He was a computer programmer.  He’d been a programmer his entire working life. “  (p.99).

California budget takes from schools to pay for corporate tax evasion

 Budget May Revise.

The proposed California  budget for next year says that income will be  $15.7  billion less than expected. 

The report is here.  http://www.dof.ca.gov/documents/2012-13_May_Revision.pdf

California does not have enough money to continue the funding of schools, universities, fire and safety, and social services at their present levels.   The Republican Party has consistently refused to raise taxes.  So, the Republican legislative blocking  has forced the following cuts:

MediCal, child care, Cal Works, Nursing homes, In Home Supportive Services, Cal Grants ( college tuition), and a forced employee pay cuts (5%) – such as a 4 day work week.  These cuts are from the current budget. The May Revision provides level funding for k-12 schools.

 If the tax proposals are not passed in November, there will be an additional $5.6 billion dollars  cut from  K-12 schools.  These are called trigger cuts.  They will be automatic if the initiative is not passed.

These draconian cuts are imposed because the state will not- or can not – deal with corporate tax evasions.  We know of $10 billion in tax evasions from Apple, and there probably is a similar tax evasion by Google, Yahoo, and other internet companies. 

California is  Not Broke , but corporate tax subsidies are destroying our schools.

We suffer from two problems: a huge concentration of income at the very top of the income distribution and a tax system that fails to tax  that concentration.  Our tax system asks those with less to pay more and those with more to pay less.

Plutocracy, Paralysis, and the Great Depression

“Specifically, money buys power, and the increasing wealth of a tiny minority has effectively bought the allegiance of one of our two major political parties , in the process destroying any prospect for cooperation.

And the takeover of half our political spectrum by the 0.01 percent is, I’d argue, also responsible for the degradation of our economic discourse, which has made any sensible discussion of what we should be doing impossible.

All the evidence points, however, points to a simple lack of demand, which could be and should be cured very quickly through a combination of fiscal and monetary stimulus.

No, the real structural problem is in the political system, which has been warped and paralyzed by the power of a small, wealthy minority.  And the key to economic recovery lies in finding a way to get past that minority’s malign influence. “  Paul Krugman. May 4,2012.

http://www.nytimes.com/2012/05/04/opinion/krugman-plutocracy-paralysis-perplexity.html?_r=1

Oppose Bankster Fraud

It’s time for the Big Banks to bear responsibility for the financial crisis—and for fraud and abuse against homeowners across the country. The nation’s state attorneys general are considering a settlement with the bankers, but there’s a risk they’ll let the people who tanked our economy off with a slap on the wrist. It’s urgent we tell them we need a settlement that holds banks accountable for the damage they’ve done and helps homeowners. Will you write  the White House to let them know?

 Possible letter: 

A Strong Settlement is Needed

Your Letter:

Foreclosures and the abuses of the Big Banks are crippling our economy. In neighborhoods like mine and across the state, we’ve seen people underwater on their mortgages and even losing their homes. Even worse, in many cases the Big Banks broke rules, falsified paperwork or defrauded homebuyers—and gambled with our homes to enrich themselves. They have yet to be held responsible.

The economic crisis continues

   As the video above illustrates, we continue to have an economic crisis in the nation.  While Wall Street has recovered and returned to profitability, working people continue to suffer  15 million unemployed with at least 10 million more under employed.   It is more than a crisis - the reality is that the financial class has looted the U.S. economy.  They took 13 trillion dollars  out of the economy and caused 4 million people to lose their homes and  another 4.5 million to fall into foreclosure.    Millions have lost their unemployment benefits and their health care. See the story below from Bloomberg news of how the banks borrowed 7.7 $ Trillion dollars .

            We should have recovered from the economic collapse by now, but Republicans block all efforts to stimulate the economy.  It is simply not true, not accurate, that we are broke.  California remains the richest state in the richest nation in the world.   We have a crisis because the richest 0.1 % are making enormous profits and they are not paying a fair share of taxes.  Many of the largest corporations and the richest people pay no taxes at all.  They are not paying taxes for schools, police, roads, bridges, fire protection and basic services. Responding to a recession by budget cuts is self defeating.  All you have to do is to look at Ireland, Greece, and Great Britain to see what follows. It is a cycle down.   We learned this during the Great Depression – its called Keynesianism.

            We should be investing in re building our crumbling infrastructure  and putting teachers, cops, and childrens protective workers back to work.

Richard Wolff: explains the U.S. and Euro zone crises

How Occupy is Transforming Our National Conversation - IPS

How Occupy is Transforming Our National Conversation - IPS

Paul Krugman: An Indispensible Man

Paul Krugman on the economy.

Unions fight back; join us

Wall Street Donated $41 Million to Supercommittee Members | Truthout

Wall Street Donated $41 Million to Supercommittee Members | Truthout

The Math Behind "Class Warfare" And A Middle Class Under Attack | California Progress Report

The Math Behind "Class Warfare" And A Middle Class Under Attack | California Progress Report

Let's 'Make Them' End the Great Recession | Common Dreams

Let's 'Make Them' End the Great Recession | Common Dreams
This writer from United for a Fair Economy has the analysis right.

Jobs, Jobs, Jobs. -Bernie Sanders

We need to create a California state bank

 U.S. companies keeping their money abroad to avoid taxes.  These taxes could be used to hire teachers, police, firemen, etc.

Microsoft.  $42  Billion, Cisco systems. $38. 8 Billion, Google, $16 Billion. According to the N.Y. times, JP Morgan Chase estimates that U.S. based multinationals hold $1.375 Trillion outside of the U.S.

Many of these companies pay more taxes outside of the U,S., and a higher percentage of taxes outside of the U.S. than in the U.S.

What is an alternative?  Well to start with we should create a publically owned California bank to promote California prosperity. We need a bank that is a part of democratic planning in which what is invested, where it is invested, and how it is invested in democratically decided.

For example, the people of California are currently paying for, and will pay in the future for, a trans bay bridge at a cost of about  $13.5 Billion. The original proposal was for a  $3.5 Billion bridge.  The steel  for this bridge is being manufactured and created in China- while California has a 11.5  % unemployment rate. Where were these decisions made? Who made them?  Someone profited from these decisions, not you and I.

If we created a Bank of California, like the Bank of North Dakota, we could create a public utility like SMUD (The Sacramento Municipal  Utility District) to collect, manage and direct our tax money.  This would save us all  money.  When the state needed money, it could borrow from the bank and pay ourselves interest instead of paying Wells Fargo.

Reich: The Hostage Crisis Continues

Why Obama Can't Pivot to Jobs and Growth

By Robert Reich

With the hostage crisis behind him, the President is now ready to talk about the nation’s real problem.
Nine paragraphs into his remarks today announcing the nation has paid most of the ransom the radical right demanded as a condition for maintaining the full faith and credit of the United States (he didn’t use these exact words), the President pivoted to the agenda he should have been talking about all along:
“And in the coming months I’ll continue also to fight for what the American people care most about: new jobs, higher wages, and faster economic growth.”
But what precisely will he fight for now that the debt deal has tied his hands?
He says he wants to extend tax cuts for middle class families and make sure the jobless get unemployment benefits.
Fine, but the new deal won’t let him. He’ll have to go back to Congress after the recess (five weeks from now) and round up enough votes to override the budget caps that now restrict spending. What are the odds? Maybe a little higher than zero.

Hostage taking successful: Republican debt deal makes the economy worse

A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.

Paul Krugman

N.Y. Times: For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

Republicans extend the Great Recession

A group of financial capitalists, represented primarily, but not exclusively by the Republican Party, looted  the banking system  in 2008/2009 and caused the Great Recession costing millions of people their jobs and their homes.  Now the same people are set upon doing it all again.  The all cuts budget imposed by the Republicans will make the recession longer and worse than it needs to be.

Meanwhile, Back in the Real Economy N.Y. Times. Opinion. July 30,2011.

The economy is in trouble, and Washington — fixated on budget slashing at a time when the economy needs more spending — seems determined to make matters worse.

…Indeed, they are bound to worsen if Congress approves deep near-term spending cuts as part of a debt-limit deal while letting relief and recovery measures expire.

We will leave it to the historians to figure out how both political parties, and many Americans, became convinced that austerity is the road to recovery. History provides evidence that it is not, including the premature budget tightening of 1937 that reignited the Depression.

For now, it is clear that the traditional drivers of recovery — consumer spending and residential real estate — have failed to rebound, with the latest report showing consumers extremely cautious about spending on anything and the housing market stuck at its post-bubble lows.

Weak demand leads to slow growth, and slow growth leads to high and rising unemployment, which then reinforces weak demand and slow growth, and so on, in a vicious cycle from which the economy, obviously, has found no escape.