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The deficit is now down 60 percent as a percent of gross domestic product. It is down more than the deficit hawks Alan Simpson and Erskine Bowles asked for. This rapid reduction is seriously hurting the economy and jobs, but demands for cuts continue. It is time for Congress and the President to “pivot” to focusing on our real problems: the jobs gap, the wage gap and the trade gap.

Mythical Deficit Problem Solved

The “deficit problem” is man-made. When Bill Clinton was president we were paying off the debt. George W. Bush turned Clinton’s budget surpluses right around, calling deficits “extremely positive news” because they would later force cuts in government. Ronald Reagan’s “strategic deficits” began a strategy to make the borrowing appear so bad that the public would be panicked into allowing cuts in the things government does to make our lives better – so the wealthy few could have even more wealth and power. (Reagan tripled the national debt, Bush doubled it again.)

So after Bush we had a problem. When ‘W’ left office the budget deficit was $1.4 trillion. Then after Obama took office Wall Street and the right started terrifying the public about deficits and outlining their “solutions”: Cut government, cut regulation of the giant corporations, cut entitlements, cut investment in infrastructure, privatize public assets, cut the safety net, etc… Cut the things that government does to make our lives better (government spending) and cut the things government does to protect us from the immense power of the insanely wealthy and their giant corporations.

But something got in their way. The deficit started coming down before all of the “solutions” could be forced on us. The deficit is now down 60 percent as a percent of GDP from the level Bush left behind (see the chart in this post). (more…)

Will California Attorney General Kamala Harris hang tough in her new lawsuit against JPMorgan Chase, the first to target individual bankers accused of defrauding the public? If so, it would be the first time in five years that executives at a major bank have personally paid a price for their misdeeds.

Weekend at Jamie’s

Recent revelations have shown the world that JPMorgan Chase comes as close as any institution in America to embodying all this is corrupt, contemptible, and criminal about today’s megabanks.  This is gratifying, at least on a personal level, since that was not a popular position when we first started writing about JPM and CEO Jamie Dimon a few years back. In those days Dimon was held up as the “good banker” by the president and the press. His institution was considered well-managed and ethical by some of the more shallow members of the popular press, despite the plethora of scandals and crimes like the Alabama bribery case.

Since then we’ve had a variety of Chase revelations: the “Burger King kids” details behind its massive foreclosure fraud; its confessed criminal mistreatment of active duty military personnel; its deeds in fraudulently propping up a failed mortgage lender (it was like a financial Weekend at Bernie’s); and (speaking of “Bernies”) its negligence (at best) in the handling of the fraudulent Madoff accounts, which should have triggered all sorts of red-flag warnings.

Now there’s the London Whale scandal and what appears to be a subsequent case of investor deception.

The bank wound up paying a staggering $16 billion in fines and settlements over a four-year period, more than 12 percent of its net income during that time.

The Scandal of Our Time

An ethically healthy society would never have lionized a CEO like Jamie Dimon or an institution like JPMorgan Chase. That’s why we’ve called it “the scandal of our time.” What explains Dimon’s inability to stem the lawbreaking and correct his organization’s broken ethical system? The most generous interpretation is that he’s an incompetent manager — so incompetent that, even after numerous suits, revelations, and settlements, “Jamie didn’t know” about all the illegal and unethical behavior that continued unabated in his institution.

Needless to say, there are more plausible explanations. (more…)

You will be hearing a lot about the upcoming Trans-Pacific Partnership (TPP) agreement. TPP’s negotiations are being held in secret with details kept secret even from our Congress. But giant corporations are in the loop.

TPP is a “trade” agreement between several Pacific-rim countries that is actually about much more than just trade. It will be sold as a trade agreement (because everyone knows that “trade” is good) but much of it appears to be (from what we know) a corporate end-run around things We the People want to do to reign in the giant corporations — like Wall Street regulation, environmental regulation and corporate taxation.

One-Sided Process

The TPP process appears to be set up to push corporate interests over other interests. The TPP is being negotiated in secret, so what we know about it comes from leaked documents. Even our Congress is being kept out of the loop. But 600 corporate representatives are in the loop while representatives of groups that protect working people, human, political and civil rights and our environment are largely not in the loop.

This one-sided participation unfortunately indicates that the interests of giant corporations are likely to override the interests of working people and those who want to protect non-corporate interests. Otherwise there would be more representation by representatives of organizations representing these concerns, and greater transparency into the process.

TPP Is A Very, Very Big Deal

The coming TPP is a very, very big deal. If it is agreed to by the Senate and signed by the President it will override American laws in many areas. We won’t be allowed to enforce laws and regulations that impede the “rights” granted to big corporations under this agreement, and it will be very hard to rescind the agreement once signed, no matter how much damage might result. Just look at how NAFTA, China’s entry into the WTO and other agreements are causing huge trade deficits and sending jobs, factories and industries out of the country while dramatically increasing income and wealth inequality.

Making the TPP work for We, the People should be up there on our “litmus test” of things we require of our elected officials — right along with pledging no cuts to Social Security and Medicare. (more…)

If you’re a jobless person looking for food or a wounded vet who needs health care, 60 Minutes has a solution: Beg a billionaire for it. That was part of the powerful, if covert, message behind last Sunday’s 60 Minutes broadcast.

The rest of Sunday night’s message, which tracks closely with the right-wing agenda promoted by billionaires like Pete Peterson, goes like this: Keep downsizing government. Keep tolerating and promoting the hijacking of our national wealth by the rich, even as it suffocates the middle class and creates soaring poverty rates. Surrender democratic control over the social safety net to wealthy donors.

And whatever you do, keep stroking their insatiable egos. (more…)

Looking for a quick fix to the deep inequality that so afflicts us? Stop your searching. We need to strategize instead for the long-term. A riveting new work from a leading historian helps us see how.

The 79-year-old corporate gadfly Robert Monks, the former top federal regulator over America’s pension system, earlier this year opined that Corporate America operates “for the personal enrichment and glorification of its manager-kings.”

Too harsh a judgment? Hardly. Current standard corporate operating procedures only make sense if we acknowledge that America’s biggest private enterprises have essentially become the private preserve of an elite executive class.

How else to explain today’s most routine corporate behaviors? The endless rush to mergers that create little more than chaos in newly consolidated workplaces. The ongoing corporate refusal to invest significantly in research and development and employee training. The billions of dollars corporations spend to “buy back” company shares of stock on the open market.

All these moves leave corporations less equipped to succeed in the long term. But all these moves generate multiple millions, sometimes even billions, in the here and now for the corporate executives who make them.

Corporations, of course, have always done well by the executives who run them. But a half-century ago the United States had institutions that kept this enrichment within somewhat reasonable bounds. Trade unions acted as a brake on executive greed grabs. A progressive tax system — with rates as high as 91 percent on income over $400,000 — discouraged the greed grabbing in the first place.

But both these institutions — trade unions and progressive taxes — have atrophied over recent decades. Income and wealth, without these institutional checks in place, have concentrated at America’s economic summit. Below that summit, daily life for average Americans has become ever more insecure.

The United States, in effect, has slid into what University of Maryland historian and political economist Gar Alperowitz calls a “systemic crisis.” For the nation’s vast majority, America has simply stopped working. Daily life has turned into an ever-faster treadmill. And no real relief looms anywhere on the near horizon. (more…)

Apparently it never occurred to Attorney General Eric Holder that the Associated Press might be “too big to fail.” If it had,then his Justice Department probably never would have investigated it.

The AP isn’t just any news agency. It’s the largest one in the United States and one of the three largest in the world, along with Great Britain’s Reuters and Agence France-Presse. And it is, understandably enough, angry.

So are journalists who work for other outlets, along with defenders of a free press and supporters of an informed citizenry. Journalists must be free of direct or implied intimidation if democracy is to work properly. And yet, correspondents who cover this Administration will often admit privately that they do feel intimidated.

“Twice as much as all previous administrations combined”

A free press sometimes makes powerful people uncomfortable. It can even cause them considerable inconvenience.  Actions against journalists must be very carefully weighed against democratic principle and fundamental freedoms.  Instead, this White House has been as zealous as its Republican predecessors – in many ways, more so – both in its pursuit of low-level officials who leak information to reporters, and in its pursuit of reporters themselves.

The AP investigation, which seems quite broad, is only one example of that. As The New York Times reports: “Under President Obama, six current and former government officials have been indicted in leak-related cases so far, twice the number brought under all previous administrations combined.”

Even the Bush Administration didn’t find it necessary to pursue journalists and truth-revealing Americans as fiercely as the Obama White House. (more…)

The Communications Workers of America is asking people to contact their senators to block an effort to undermine American workers using the H-1B visa program. Here’s the story.

What Is H-1B And Why?

There is a program called “H-1B” that lets companies hire temporary workers from outside the country to come here and work. The idea is that there are temporary employees, and that they fill key jobs that a company just can’t find anyone in the country to do.

We all want American companies to be successful, and when they just can’t find people with the right skills to get things done, we want them to be help them get the people they need so they can do what they are in business to do. So the H-1B program exists to cover situations where there are not enough Americans with the right skills to take key jobs with key skills.

For example, if you are an electronics company and you are developing a key technology and all the Americans who understand this technology are already hired elsewhere, but there are available people outside the US, you ought to be able to bring in someone for a while, to help you get the technology ready to sell. Everyone benefits from this because an American company gets a chance to be successful and grow, the innovative product makes it to market so we can use it, and the H-1B employee is able to come here and make some money.

Problems With H1-B Abuse

Key engineers in hi-tech companies can make well into six figures, for example. Meanwhile many well-educated people in other countries are ready to accept compensation that is dramatically less than what key people in the US are paid. So companies started abusing the H1-B program, replacing Americans — especially older workers (in Silicon Valley “older” can mean over 35 or anyone who dares get married and have children) — with low-paid H-1B workers. And H-1B workers understood that if they complained about their low wages or long-hour conditions they would be sent home. (more…)

President Obama was in Texas last week to launch a “Middle-Class Jobs and Opportunity Tour” that focuses on manufacturing.

 

The president announced an executive order creating three “manufacturing hubs” — Manufacturing Innovation Institutes — with $200 million from the Departments of Defense, Energy and Commerce, and the National Science Foundation and NASA budgets. The president is asking Congress to invest an additional $1 billion to create a nationwide network of 15 such institutes. (For more information on manufacturing hubs see my posts, Sen. Sherrod Brown Proposes National Network of Manufacturing Innovation, Ohio 3D-Printing Manufacturing Hub Initiative and Obama’s Four Steps For Manufacturing.)

 

According to the NY Times, “These steps are not a substitute for the bold Congressional action we need to create jobs and grow the economy, but they’ll make a difference,” a White House official said, speaking on background ahead of the president’s official announcement.

 

Open Data Policy

 

Another executive order declares an “Open Data Policy” that requires government data be put into open and machine-readable formats and made available to the public and entrepreneurs. The project will help “achieve the goal of making troves of previously inaccessible or unmanageable data easily available to entrepreneurs, innovators, researchers, and others who can use those data to generate new products and services, build businesses, and create jobs.” (more…)

President Obama has nominated five people to the National Labor Relations Board (NLRB). Two are Republicans. All are waiting for confirmation by the Senate. Let your senators know these nominees should be confirmed so the NLRB can get back to work.

What Is The NLRB?

The NLRB is the agency that “safeguards employees’ rights to organize and to determine whether to have unions as their bargaining representative. The agency also acts to prevent and remedy unfair labor practices committed by private sector employers and unions.”

The NLRB supervises elections to form or decertify unions in the workplace. It investigates charges that employees, unions or employers violated rules over labor practices and rules on the charges. It works to get problems resolved rather than taken to court. And finally, when the NLRB has issued a ruling that is ignored it can take the parties to court.

But if the NLRB is prevented from operating there is no one to make sure that the rules for labor practices are being enforced. This hurts workers and companies.

Background Of The Nomination Battle

Individual workers have little power when up against giant corporations. They can ask for better pay, benefits and working conditions, please, and the giant companies can just say, “you’re fired” if they do — and working people know that. However, when the employees all band together it gives them collective power. It’s the old story of how a person can break a single stick, but when all the sticks are bundled together the person is not able to break them. Banding together the workers have the power to get better wages, benefits and working conditions.

The other side of this is that big companies can make a lot of money if they can keep their workers from organizing unions. So they use their money and power to try to stop workers from organizing unions. (more…)

Adam Lanza. James Holmes. Jared Lee Loughner. Seung-Hui Cho. These names instantly bring to mind some of the worse mass shooting massacres of the last decade or so. But they have something else in common. In addition to reviving calls for stronger gun control legislation, their heinous acts also turned America’s attention to dismal state of our mental health system. Every rumor and news report about the mental state of the mass-shooter-of-the-moment, was followed by demands to patch-up the “cracks” in our mental health system through which these young men supposedly fell.

Alas, support for improving mental health services  have proven even more fleeting than support for gun control — until the next shooting, that is. Unfortunately, the sequester will turn those existing “cracks” in to chasms, and create new ones.

 

The sequester does the most harm to the most vulnerable, and it’s hard to think of a more vulnerable population — or one with fewer advocates, and less ability to self-advocate — than the mentally ill; especially those with serious mental illness that require more care than our system currently provides. The sequester reserves some of its cruelest cuts for the mentally ill. (Of course, none of it has to happen. Congress passed the sequester, and Congress can repeal the sequester.)

According to the Office for Budget Management, the Substance Abuse and Mental Health Services Administration (SAMHSA) will lost about $275 million under sequestration, with serious consequences for the mentally ill:

• 684,000 individuals will lose critical employment and housing assistance, case management services, and school- based supports;
• 1.13 million children and adults will be at risk of losing access to any type of public mental health support
• 1,300 youth with severe emotional disturbances will lose access to treatment services
• 18,000 fewer homeless individuals will receive outreach services
• 9,000 fewer individuals living on the street will be enrolled in homelessness assistance programs;
• 27,000 of the nation’s most vulnerable homeless individuals will lose access to primary care referrals, housing assistance, education opportunities, and job training
• More than 320,000 children will not receive coordinated mental health services, early intervention and prevention programming, and other suicide prevention services

The Department of Defense, facing $500 billion in sequestration cuts, will have to furlough most of its 800,000 civilian employees for at least one day a week — including more than half of of the army’s 4,500 mental health professionals. For mental health professionals, it means up to a 20% reduction in pay. For soldiers, sequestration means shorter therapy sessions for those dealing with PTSD, less time with physical therapists, and longer waits for grief counseling.

These are just a few of the sequester’s consequences for our mental health, but they begin to paint a picture of what the sequester will do to many vulnerable Americans who will literally have nowhere to go, in a mental health system that was already stressed and under-funded before the sequester. (more…)