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Leo W. Gerard

By Leo W. Gerard
USW International President

Glenn Beck made it official on Fox News last week: He’s seeking the office of 21^st Century Marie Antoinette.

The queen of France, beheaded during the revolution, attained infamy for insensitivity toward hungry peasants. Glenn Beck, the Fox talk show host, achieved celebrity for his callousness toward unemployed Americans.

Beck leads a pack of royalist Republicans who have spent the summer mocking, vilifying and denigrating the nation’s 14.5 million unemployed workers. It is the moneyed class smacking down the working class in an attempt to disempower and disenfranchise them. Dispirited workers are less likely to vote – which could give Beck and his gang of royalist Republicans control of Congress.

The unemployed, like France’s 18^th Century peasants, are fighting back, however. The Union of the Unemployed and Working America are organizing the jobless to vote this fall and to demand help from lawmakers. They’re not out to behead Beck and the royalist Republicans, just dethrone them.  

Two and a half years after wanton recklessness by Wall Street banksters crashed the economy, the official unemployment rate remains stuck at 9.5 percent. It rises to 17 percent when statisticians add part-time workers seeking full-time jobs and the jobless who’ve abandoned the search out of hopelessness. With the help of a taxpayer bailout, Wall Street has recovered, and those banksters are taking home multi-million dollar bonuses again. But on Main Street, there still are five unemployed workers for every job vacancy, so no matter how hard the jobless try, there are no openings for 80 percent of them.

Routinely, crowds line up before dawn when job openings are announced. In June, in Longmont, Colo., hundreds queued up to vie for 100 low-paid clerk and stock jobs at a new SmartCo Foods. Hundreds of Louisville residents gathered in the dark on Aug. 9 at the Kentucky Exposition Center to apply for 450 state fair jobs paying $7.25 an hour and lasting a total of 20 days.

In addition to jobs, the people on Main Street are losing their homes and life savings at increasing rates. Bankruptcy filings nationwide reached the highest level in five years between April and June. Banks repossessed 92,858 homes in July, up 6 percent from July 2009. For too many, the situation is so desperate that they’re discussing plans for suicide on an on-line forum for the jobless.

Glenn Beck and the royalist Republicans don’t care about all that. Here’s Beck ranting about those who lose unemployment benefits at 99 weeks:

“Have you heard of the 99ers? These people, some of which I, frankly, I bet you would be ashamed to call them Americans, they think 99 weeks of unemployment benefists are not enough. . .Two years is plenty of time to have lived off your neighbors’ wallets.”

Video of Beck slamming the "99ers" begins at 2 minutes and 33 seconds into this clip.

Beck went on to argue that the jobless who protested last week on Wall Street were not “regular people,” like him and his friends:

 “Are they just regular people? . . They are socialists and anti-capitalists.”

Then, incongruously, Beck condemned a protestor seeking jobs for all unemployed workers with a sign asserting, “A job is a right.”

“No, a job is not a right,” insisted Beck, making it clear that in his world, the unemployed are “un-American” for not landing jobs, but, simultaneously, it’s perfectly moral and fair that the American economy has failed to produce enough jobs for them to fill.

Beck is the TV mouthpiece for the royalist Republicans who champion this view: a job is not a right, and it’s not right to aid the jobless. Republicans, virtually as a block, oppose extending unemployment benefits for the jobless while they support extending tax breaks for the moneyed class – themselves. They opposed legislation to save the jobs of 319,000 public servants – the people who educate our children and protect our lives — teachers, police officers, firefighters. Democrats in Congress paid to preserve those jobs  by eliminating $11 billion in tax loopholes for corporations that ship jobs overseas — a provision that ultimately could create jobs in the United States.

Like Beck, they’ve announced their loathing for the unemployed. Royalists Sharron Angle, Jon Kyl, Andre Bauer, Tom Corbett and Orrin Hatch have derided the unemployed as lazy, spoiled, stupid drug users.

The jobless, however, are mad as hell and aren’t going to take it anymore. They’re organizing. The Union of the Unemployed and Working America, the community affiliate of the AFL-CIO, are mobilizing the jobless.

The Union of the Unemployed is launching a “Bite Back” campaign, targeting those in Congress who tried repeatedly to cut off unemployment insurance and other aid to the jobless. “They will never see us coming,” the first Bite Back ad says, “After all, the politicians whose policies destroyed our lives think we’re ‘lazy’ ‘drug users’ and ‘hobos.’ They are counting on us to be docile as lambs and so depressed we’ll stay in bed on election day.”

Working America, whose members are not in unions but align themselves with the political philosophy of the AFL-CIO, plans to organize hundreds of thousands of the jobless across the nation to vote in workers’ interests. Field organizers will ask the jobless to fill out “Help Wanted” petitions to send to their congressmen and senators asking exactly what they’ve done to create jobs and assist the unemployed.

The jobless removing the royalists from their jobs – nothing could be sweeter, unless this revolution also included dispatching Glenn Beck to his unemployment office.

David Sirota

 

Author of “The Uprising: An Unauthorized Tour of the Populists Revolt”

When they write their retrospectives about the era that ended with the 2008 election, economic historians will undoubtedly credit George W. Bush with almost single-handedly moving the country to embrace extremist conservatism. It’s a simple storyline: Cowboy president drives bewildered American herd over laissez-faire cliff. What such reductionism will ignore, though, is what we must remember now: namely, that Congress also played a decisive role in the stampede.

As former House Republican leader Tom DeLay said, he and his colleagues deliberately started “every policy initiative from as far to the political right” as possible, so as to shift “the center farther to the right.” The formula emulated Franklin D. Roosevelt’s fabled admonishment to allies: “I agree with you, I want to do it, now make me do it.”

Of course, that triumph was the country’s loss, as Republican policies thrust the political center off a conservative precipice and America into an economic freefall. And as we plummet, we are desperately groping for a lifeline.

If we are lucky and we end up snagging one that saves us – a huge if – it will be one that is strong enough to snap the center back from the conservative brink. This super-durable bungee cord must have the force of law, meaning it will be woven by Democratic legislators now exerting as much pressure on President Obama’s left as congressional Republicans focused on President Bush’s right.

When, for instance, Obama hedged on his promise to revoke $226 billion worth of Bush’s upper-income tax cuts, House Speaker Nancy Pelosi, D-San Francisco, pushed him to fulfill the pledge and put the money into programs that better guarantee job creation.

When Obama initially offered up a stimulus bill filled with discredited business tax breaks, Democratic senators forced him to back off. Reps. David Obey, D-Wis., and Jim Oberstar, D-Minn., then argued that the president’s proposed infrastructure investments were too small to boost the economy. That led House Democrats to increase Obama’s spending targets.

As stimulus negotiations continued, Rep. John Conyers, D-Mich., tried to add provisions letting courts renegotiate banks’ primary-residence mortgages so as to prevent more foreclosures. It’s a commonsense proposal: Judges already have the power to renegotiate vacation-home mortgages, and the New York Federal Reserve Bank says existing bankruptcy laws are exacerbating the foreclosure crisis. While Obama opposed the initiative out of fear that banking industry opposition might slow the underlying stimulus bill, Conyers’ effort ultimately made the president commit to supporting the reforms in future legislation.

Then there was the progressive reaction to Obama’s demand for more financial bailout money. Turning a routine committee hearing into a modern-day incarnation of the Great Depression’s Pecora Commission, Rep. Alan Grayson, D-Fla., upbraided a Federal Reserve official for refusing to disclose which banks are receiving taxpayer dollars. The spectacle was one of many that whipped the House into passing a bill attaching strings to the funds. Obama responded by committing to enact some of the restrictions by fiat.

At once complementary and adversarial, this intragovernmental squabbling probably makes the conflict-averse Obama uncomfortable. But the “make him do it” dynamic could finally bring the center of Washington’s political debate closer to the progressive center of American public opinion. Even more important, it is precisely what will help the new president avert an economic disaster.

David Sirota is the best-selling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008).

David Sirota

By David Sirota
Author of “The Uprising: An Unauthorized Tour of the Populist Revolt”

Please, forgive me for saying it. I know it’s a tad annoying, but it has to be said to America’s ruling class in this humble column space. Because if it’s not said here you can bet it won’t be said anywhere else in the media, and it needs to be said somewhere on behalf of the millions of citizens who were right.

We told you so.

In the slow-motion train wreck that became the current economic meltdown, our bipartisan political Establishment and the sycophantic punditburo have been wrong over and over and over again. They told us that eviscerating consumer protections would unleash the markets benevolent power and boost the economy. They told us that a trillion-dollar Wall Street bailout would solve a credit crisis. They told us that bailout would be subjected to intense oversight and scrutiny.

Wrong, wrong and wrong — and when critics predicted just that, sneering commentators and congressional leaders berated us as know-nothing Luddites, conspiracy theorists, or both.

But with the release of three new reports, there’s no debate anymore about who was correct and who wasn’t. The studies prove that the critics were right and the ideologues of Washington were wrong.

When in 2005 Congress overwhelmingly passed a credit card industry-written bill gutting bankruptcy laws, progressives were right to try to stop it — and not just because it was an immoral move to legalize usury. We were right because as the New York Federal Reserve Bank reports, the bill played an integral role in the recent foreclosure surge that crushed the economy.

In the past, bankruptcy laws made sure debtors first and foremost continued paying their mortgages so that they could stay in their home. But the 2005 legislation effectively compels debtors to first pay off their credit cards, meaning many then have no money left to pay their mortgage. The Feds report estimates that the bankruptcy bill is causing 32,000 more foreclosures per quarter than the economy would have already generated.

We told you so. When almost every media voice in America was sounding the alarm of financial panic and demanding a Wall Street bailout plan; when bailout opponents were roundly ridiculed as “irresponsible” by politician and pundit alike — those opponents were nonetheless right to say then what a study from the Minneapolis Federal Reserve Bank says now: that the case hadn’t been made.

While reporters and the Bush administration frantically insisted that bank-to-business lending had ceased, inter-bank lending had stopped, and short-term “commercial paper” loans had dried up, the Minneapolis researchers tell us that “all three claims were false” and continue to be false; that “nobody has explained how the money system has frozen when the data says it has not”; and that “a trillion dollar intervention warrant(ed) a bit more serious analysis.”

We told you so.

When lawmakers said the bailout included strict oversight measures, skeptics were right to say that claim was patently untrue. According to a new analysis by federal officials at the Government Accountability Office, virtually nonexistent oversight of the bailout means “taxpayers may not be adequately protected” and that the bailout’s stated goal of fixing the economy “may not be achieved in an efficient and effective manner.”

Yes, we told you so.

And so now, even though these damning reports have garnered scant news coverage, perhaps there will be a change. As we — the pragmatic progressive majority demand tough new financial regulations; job-creating investments in public infrastructure; labor law reforms; universal health care; revised international trade policies; a repeal of the odious bankruptcy bill and an end to Wall Street welfare maybe, just maybe, our humiliated rulers will start listening.

Dean Baker

By Dean Baker
Co-Director, Center for Economic and Policy Research

Henry Paulson’s main claim to fame is getting just about everything wrong in his tenure as Treasury secretary. However, he now stands to gain lasting notoriety as the person who destroyed the domestic U.S. auto industry, and the economies of the Michigan, Ohio, and Indiana along with them.

The story is that the big three automakers are struggling with record sales declines. This collapse in car sales in turn is the fallout from the collapse of the Greenspan-Bernanke housing bubble. While the domestic automakers have been hit hardest, all manufacturers have seen sharp drops in sales. Toyota’s sales were down 23.0 percent compared with its year ago levels. Honda’s sales were down 25.2 percent, and Nissan’s sales fell 33.0 percent.

These huge plunges in year over year sales by the world’s top car manufacturers can’t be blamed on the industry. Responsibility for this plunge lies with Mr. Paulson and other economic policy makers, and their Wall Street friends.

The basic arithmetic is simple. General Motors saw its sales fall by 45 percent compared to its year ago levels. That means its revenue has been cut nearly in half. While it has made some reductions in employment and can ease back its production, there is no way it can reduce its expenses by the same amount. Many of its expenses, like interest costs, property taxes, and health insurance for retirees are largely fixed independent of short-term fluctuations in output.

As a result General Motors is now losing close to $2 billion a month. At this rate, it will burn through its capital in around 2 months and be forced into bankruptcy. Chrysler and Ford are in somewhat better shape, but the basic story is the same. Furthermore, the fallout from a GM bankruptcy could sink Chrysler and Ford as well, as common suppliers shut down and credit for the industry vanishes and customers flee to manufacturers with longer life expectancies.

There have been analysts, presumably including Henry Paulson, who think that bankruptcy is a reasonable solution for the auto industry. This is yet another of Mr. Paulson’s famous mistakes. (Remember, this guy missed the housing bubble completely, thought its impact would be small when it burst, didn’t see a problem with letting Lehman Brothers fail, and thought the TARP [RIP] was a good idea.)

Bankruptcy would allow GM, Ford and Chrysler to more quickly cut back their bloated dealer networks and adjust their car lines with current market demand, as its proponents claim. Bankruptcy would also void union contracts, which will thrill the millionaire bankers by forcing workers earning $57,000 a year to take pay cuts. And, all those lazy retirees will see the health care benefits that they worked for taken away.

That’s the good part. Realistically, bankruptcy is likely to kill all three manufacturers, taking down much of the region’s economy with them.

First, some folks may recall the credit crunch. Lenders are extremely reluctant to take risks. In the absence of government guarantees, it is unlikely that any banks will step forward to provide GM and the others the money they need to keep operating in bankruptcy. In other words, bankruptcy is very likely to mean a complete shutdown of the Big Three.

Let’s say that the anti-bailout crowd suddenly gets a soft spot and decides to guarantee loans to the firms operating under bankruptcy protection. There is still the problem of selling cars. Customers will be very reluctant to buy cars produced by a manufacturer in bankruptcy, since they won’t know if a dealer and supplier network will exist in 3 or 4 years so that they can get their car serviced and buy replacement parts.

While people don’t mind flying an airline in bankruptcy, buying a car is to some extent an investment in the company. Many fewer customers will be willing to invest in a bankrupt car company.

But let’s assume that the investment financing is arranged and that customers are still willing to come through the doors. The bankruptcy itself is still likely to be devastating to the economies of Michigan, Ohio, and Indiana, the three states where Big Three employment is concentrated.

Bankruptcy protects the firm from its creditors. The creditors of these firms are thousands of suppliers who are heavily concentrated in the same states. In most cases, the Big Three manufacturers were their major customers. These suppliers have already been squeezed by falling demand and lower product prices. If they cannot collect the money owed them by the Big Three, there will be a whole chain of secondary bankruptcies.

The impact in these states is potentially huge. According to the Center for Automotive Research, auto related employment accounts for almost 7 percent of total employment in Michigan, 6 percent in Indiana, and 5 percent in Ohio. Losing 7 percent of total employment in Michigan would be equivalent to losing more than 9 million jobs nationwide.

That is Mr. Paulson’s latest plan for the auto industry and these three states. This will be quite a legacy.

There is one last point that should really gall just about everyone. Mr. Paulson has argued that he does not have the legal authority to use the money appropriated for TARP for bailing out the auto industry.

This claim is outrageous for two reasons. As many of us who opposed the TARP argued, it gave Paulson a virtual blank check, and that is pretty much how he has interpreted it, using the money to bail out a wide range of non-bank institutions.

The other reason why this is so galling is that this is an administration that has taken pride in claiming virtually unlimited powers in a wide range of areas, including the conduct of war and holding of prisoners without charges or trial. It would be incredible if they allow Detroit to sink because they claim that they don’t have the legal authority to save it.