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Mitt Romney has a vision.

Wall Street… UNREGULATED
Main Street… ISOLATED
The Middle Class… DECIMATED
American jobs… RELOCATED
Supreme Court… STACKED
Social Security… PRIVATIZED
Medicare… DISMANTLED
Planned Parenthood… DEFUNDED
Global Warming… IGNORED
College Aid… SLASHED
Health Insurance Reform… REPEALED

Mitt Romney’s America is not our America

The Dow Jones Industrial Average hit 13,338 Tuesday, it’s highest since December, 2007. The S&P 500 added 16 points. Wall Street will remember May 1 as a great day.

But most of these gains are going to the richest 10 percent of Americans who own 90 percent of the shares traded on Wall Street. And the lion’s share of the gains are going to the wealthiest 1 percent.

Shares are up because corporate profits are up, and profits are up largely because companies have figured out how to do more with less.

Payrolls used to account for almost 70 percent of the typical company’s costs. But one of the most striking legacies of the Great Recession has been the decline of full-time employment — as companies have substituted software or outsourced jobs abroad (courtesy of the Internet, making outsourcing more efficient than ever), or shifted them to contract workers also linked via Internet and software.

That’s why most of the gains from the productivity revolution are going to the owners of capital, while typical workers are either unemployed or underemployed, or else getting wages and benefits whose real value continues to drop. The portion of total income going to capital rather than labor is the highest since the 1920s.

Increasingly, the world belongs to those collecting capital gains.

They’re the ones who demanded and got massive tax cuts in 2001 and 2003, on the false promise that the gains would “trickle down” to everyone else in the form of more jobs and better wages.

They’re now advocating austerity economics, on the false basis that cuts in public spending — including education, infrastructure, and safety nets — will generate more “confidence” and “certainty” among lenders and investors, and also lead to more jobs and better wages.

None of this is sustainable, economically or socially.

It’s not sustainable economically because it has resulted in chronically inadequate demand for goods and services. That’s meant anemic growth punctuated by recessions. Without a larger share of the economic gains, the vast middle class doesn’t have the purchasing power to buy the goods and services an ever-more productive economy can generate. (more…)

The big news coming out of the Pennsylvania primaries yesterday are that two of K Street’s favorite Capitol Hill Democrats, Tim Holden and Jason Altmire, got upset in races where they had lots more cash than their opponents but still got taken down. The way these races played out should be a big lesson to Democrats who think they can take special interest cash, make pro-special interest votes and still win elections. And with big issues like student loans, tax subsidies for Wall Street and Big Oil, and accountability for the big banks in play the rest of the year, politicians should pay attention.

Holden was an incumbent and his only weakness was that he was forced to run in a more Democratic district than he used to have. Given that he voted with corporate special interests and Republicans a lot of the time — including on the Bush tax cuts and fracking and factory farms — that became a big problem when he faced a progressive challenger named Matt Cartwright. Holden had the support of the Democratic establishment and the monied interests, but Cartwright thumped him. One of the key ads in the race directly took on his ties to Wall Street:

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Interest rates for student loans will double on July 1 unless Congress acts. That’s outrageous — but the fiscal abuse of our nation’s young people runs far deeper than that. An entire generation has been trapped into debt servitude and joblessness by the implacable machinery of Wall Street greed. Bank-servile scolds insult the young people of America while the bankers’ economic engines strip-mine their financial future.

Jobless or overextended college graduates aren’t even allowed to declare bankruptcy — a privilege that’s extended to every reckless investor and mismanaged corporation in the nation. Once they finally find work, college graduates face years of garnished wages to repay the loans that funded their often-overpriced educations. If they haven’t repaid that debt by the time they grow old — a very real possibility at the cost of a college education today — they’ll even be forced to surrender part of their Social Security benefits.

That’s indentured servitude.

Meanwhile banks have been slicing and dicing student loans into derivative financial instruments called “SLABS” — student-loan asset backed securities. We’ve seen this movie before — the one where big banks mass-market loans to a population with stagnated wages and dwindling economic prospects, then bundle them and sell them to investors who haven’t reviewed the way they were underwritten and sold.

Hey, what could go wrong?

It’s true that many of these packaged debts are backed by the U.S. government — but not all of them.

Why are these graduates facing such a bleak job market? Because Wall Street’s gambling on other financial bets crashed the economy, leaving an entire generation without much of a future to give them optimism and hope. Their parents can’t help them much, because most of their assets were taken by Wall Street, too. So as an entire generation of college students graduates with unprecedented debt — and joblessness that’s unprecedented in modern memory — they’re looking forward to a lifetime of reduced expectations. (more…)

Europe is in recession.

Britain’s Office for National Statistics confirmed today (Wednesday) that in the first quarter of this year Britain’s economy shrank .2 percent, after having contracted .3 percent in the fourth quarter of 2011. (Officially, two quarters of shrinkage make a recession). On Monday Spain officially fell into recession, for the second time in three years. Portugal, Italy, and Greece are already basket cases. It seems highly likely France and Germany are also contracting.

Why should we care? Because a recession in the world’s third-largest economy, combined with the current slowdown in the world’s second-largest (China), spells trouble for the world’s largest.

Remember — it’s a global economy. Money moves across borders at the speed of an electronic impulse. Wall Street banks are enmeshed into a global capital network extending from Frankfurt to Beijing. That means that notwithstanding their efforts to dress up balance sheets, the biggest U.S. banks are more fragile than they’ve been at any time since 2007.

Meanwhile, goods and services slosh across the globe. If there’s not enough demand for them coming from the second and third-largest economies in the world, demand in the U.S. can’t possibly make up the difference. That could mean higher unemployment here as well as elsewhere.

What’s the problem with Europe? Don’t blame it on the so-called “debt crisis.” There was no debt crisis in Britain, for example, which is now experiencing its first double-dip recession since the 1970s.

Blame it on austerity economics — the bizarre view that economic slowdowns are the products of excessive debt, so government should cut spending. Germany’s insistence on cutting public budgets has led Europe into a recession swamp. (more…)

Mitt Romney opened the general election campaign last night in Manchester, New Hampshire, using his acceptance speech to unleash a fierce attack on Barack Obama’s “false promises and failed leadership.”

He said little about his own policies, preferring to contrast his free enterprise vision with what he called Obama’s government-centered vision.

And buoyed by his victory, Romney felt free to issue a clear defense of privilege.

At the heart of the contrast Romney drew with Obama was the big lie. After the absurd charge that under Obama, we will have “effectively ceased to be a free enterprise economy,” Romney made his defense of privilege:

We’ve already seen where this path leads. It erodes freedom. It deadens the entrepreneurial spirit. And it hurts the very people it’s supposed to help. Those who promise to spread the wealth around only ever succeed in spreading poverty.

What world is he living in? In America, extreme levels of inequality have led to economic calamity. The Gilded Age extremes of the 1920s — when the richest 1% owned about 44% of all private wealth — were followed by the Great Depression. The excesses of the Bush years — when the richest 1% owned nearly 40% of all private wealth — were followed by the Great Recession. (more…)

In the coming days and weeks we’ll be hearing a lot of misinformation about the Trustees Report from the Social Security Administration. It’s time to separate the myths from the realities:

Myth: “Social Security and Medicare have a cost problem.”

Fact: Medicare has a financial problem. As this chart shows, the cost of providing Social Security benefits is not out of control or skyrocketing.

Social Security is on an even keel for the foreseeable future. Twenty years from now it’s projected to be in a position to pay only 75 percent of benefits – but that’s easily fixed by lifting the payroll tax cap.

Myth: “Aging workforce strains Social Security, Medicare”

Fact: That’s a headline we saw repeated across the country in anticipation of the Trustees Report, but it’s wrong. What’s “straining” Social Security and Medicare today is the unequal distribution of income and a broken regulatory system for Wall Street that has put the entire economy under stress.

Social Security was actuarially stable after it was overhauled by the Greenspan Commission in the 1980s. The Baby Boomers were all alive and (mostly) working by then. So what really happened? (more…)

It was very big of Richard Parsons to admit that the repeal of Glass-Steagall (the law that had kept traditional commercial banking walled off from Wall Street speculators for more than 60 years) was part of the reason for the financial collapse of 2008 two days after he retired as head of Citigroup. Given that Citigroup never would have been created in its current elephantine form, and that Parsons never would have made many of the millions of dollars he had earned from being CEO without that repeal, it was quite a concession. I hope his conscience is eased. And I certainly hope his words open up a discussion about Glass-Steagall, which desperately needs to be reinstituted. What Parsons said in public is being talked about “in quiet rooms,” as Mitt Romney would put it, all over Wall Street right now. Most people who understand our financial system know it is true, but don’t want to change anything because they are making too much money the way things are now.

But this post is not about breaking up our banking monstrosities, the six conglomerates that control assets equivalent to two-thirds of America’s GDP. I have written about that many times before, and no doubt will again. But this post is about an even more fundamental issue to our nation’s future.

Since 48 hours isn’t generally enough time to rethink your life’s work and transform your entire philosophy, Parsons’ dramatic admission immediately upon retiring does raise some important questions about not only public policy, but about corporate morality — which some people would argue is a contradiction in terms, but I think is worth exploring a little. Parsons’ defenders will argue that he couldn’t speak out while representing his corporation, since the corporation as a whole certainly would not be in favor of raising questions about the very act of Congress that allowed them to come into existence in their current overgrown form. In fact, this line of thinking is explicit: Parsons only moral duty was to benefit his corporation’s shareholders — and all else, certainly including his own conscience as well as whatever random thoughts about public policy that might hurt the company’s bottom line, was not to be spoken.

This line of defense in regard to Parsons is the dominant morality in big business today. This ethic, if you can call it that, is very explicit: your only moral duty as an officer of the corporation is to the shareholders and the quarterly profit line of your company. But this ethos does not represent the way business leaders, let alone the rest of society, have always thought. The core idea of a social contract between business, government, workers, and the rest of society was for many decades a central ethic ascribed to by much of the business community. A wide variety of business leaders throughout American history have felt a responsibility for society. My friend Leo Hindery, formerly CEO of several major corporations, in his book It Takes a CEO and in his other writings, outlines very clearly that good CEOs and boards of directors have often taken a broader view. The view he advocates for is, as Hindery puts it, “that a responsible CEO has equal and concurrent responsibility to his employees, shareholders, customers, communities, and nation.” The notion of a business completely unconnected in its ethos from its workers and customers, along with the community and country in which it operates, is in fact a recipe for disaster — especially when companies are as large and powerful as these companies have become. What worshipers of the free market usually forget is that Adam Smith himself, the author of the “invisible hand of the market” idea, was a thoughtful and nuanced moral philosopher as well as economic theorist, and that his moral philosophy was quite different from the Ayn Rand-style “selfishness is a virtue” ideology. (more…)

Look out – the Kleptocrat Gang is loose on the land!

Unlike thieves of old, this gang is not out to rob bags of cash from banks and railroads. Instead, they are bankers and high-rolling railroaders who’re using their own heavy bags of cash as weapons to steal our elections and turn our government into their servant. A small group of Wall Street billionaires, for example, has stuffed some $20 million into a super-sized bag of cash that Mitt Romney has used to club his GOP opponents into submission. Their money has gone into a SuperPAC, appropriately named “Restore Our Future.” They definitely mean their future, not yours and mine.

Among the members of Romney’s attack-PAC are four hedge-fund hustlers who put up a million dollars or more each. Ed Conard, another million-dollar member, literally tried to be a masked robber – this Wall Streeter tried to disguise his donation by using a fake name.

Why are these high-finance billionaires riding with Romney? Because he has sworn a blood oath to protect the very special speculator’s tax break that they get for doing practically nothing of social value. Unlike most Americans, they make their money on other people’s money, rather than work, and their lobbyists have gouged a loophole in the law allowing them to be taxed at less than half the rate assessed on the rest of us. President Obama is proposing to tax their income like everyone else’s, and the Kleptocrats see Romney – who, after all, is one of them – as their best bet to beat Obama and save their lucrative piece of tax favoritism.

These and other financial elites are now rearming their Restore Our Future PAC with many more million-dollar donations to buy attack ads that’ll pound Obama. These self-serving billionaire Kleptocrats are turning our elections into highway robbery.

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National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be – consumers, working families, environmentalists, small businesses, and just-plain-folks. Twice elected Texas Agriculture Commissioner, Hightower believes that the true political spectrum is not right to left but top to bottom, and he has become a leading national voice for the 80 percent of the public who no longer find themselves within shouting distance of the Washington and Wall Street powers at the top. He publishes a populist political newsletter, “The Hightower Lowdown.” He is a New York Times best-selling author, and has written seven books including, Thieves In High Places: They’ve Stolen Our Country And It’s Time To Take It Back; If the Gods Had Meant Us To Vote They Would Have Given Us Candidates; and There’s Nothing In the Middle Of the Road But Yellow Stripes and Dead Armadillos. His newspaper column is distributed nationally by Creators Syndicate.

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This piece was first published on Jim Hightower’s website.

The shareholders of Wall Street giant Citigroup are out to prove that corporate democracy isn’t an oxymoron. They’ve said no to the exorbitant $15 million pay package of Citi’s CEO Vikram Pandit, as well as to the giant pay packages of Citi’s four other top executives.

The vote, at Citigroup’s annual meeting in Dallas Tuesday, isn’t binding on Citigroup. But it’s a warning shot across the bow of every corporate boardroom in America.

Shareholders aren’t happy about executive pay.

And why should they be? CEO pay at large publicly-held corporations is now typically 300 times the pay of the average American worker. It was 40 times average worker pay in the 1960s and has steadily crept upward since then as corporations have morphed into “winner-take-all” contraptions that reward their top executives with boundless beneficence and perks while slicing the jobs, wages, and benefits of almost everyone else.

Meanwhile, too many of these same corporations have failed to deliver for their shareholders. Citigroup, for example, has had the worst stock performance among all large banks for the last decade but ranked among the highest in executive pay. (more…)