The United States added a robust 200,000 new jobs last month, the Labor Department said Friday, in a sign that the long-awaited economic recovery has finally built up a head of steam.
Citigroup had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers - securities that it knew were likely to go bust - and, with the other hand, shorted the same securities - that is, bet millions of dollars that they would go bust.
The top six financial institutions in this country own assets equal to more than 60 percent of our gross domestic product and possess enormous economic and political power. One of the great questions of our time is whether the American people, through Congress, will control the greed, recklessness and illegal behavior on Wall Street, or whether Wall Street will continue to wreak havoc on our economy and the lives of working families.
As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power.
As the occupation of Wall Street moves into its third week, there are many questions about the organizers behind the ongoing protests and the origins of the 99% Movement. As one of the many people who actively supported the effort, and helped launch the 99% Movement, I will give my perspective on the events leading up to the occupation of Liberty Park.
In a speech on Monday, Obama said raising taxes on millionaires isn t class warfare, but "math." His math may be off: According to the IRS, those with adjusted gross incomes of more than $1 million paid an average of 23.3 percent in federal income taxes in 2008; those earning between $100,000 and $200,000 paid 12.7 percent; and those earning between $50,000 and $100,000 paid 8.9 percent. Nearly half of American families don t make enough money to pay federal income taxes at all.
For the past year and a half, policy discourse in both Europe and the United States has been dominated by calls for fiscal austerity. Strange to say, however, confidence hasn't surged. Somehow, businesses and consumers seem much more concerned about the lack of customers and jobs, respectively, than they are reassured by the fiscal righteousness of their governments. And growth seems to be stalling, while unemployment remains disastrously high on both sides of the Atlantic.
Billionaire Warren Buffett may not seem to have much in common with angry laborers at town hall meetings or armies of California nurses protesting in the streets. But these days, the executive celebrity in his boardroom and working folks on the front lines have found a common mantra as the economy continues to sputter and the 2012 election approaches: "Tax the rich."
One of the Federal Reserve s primary roles is to be the lender of last resort to banks. It played that role to the tune of stunning $1.2 trillion during the financial-system crisis that began in 2007, according to data compiled for the first time by Bloomberg News.
Perry says the 'Texas miracle' rests on conservative pillars that he would bring to the White House: minimal regulation and government, low taxes and a determination to limit the reach of Uncle Sam. What he does not say is that much of that job growth has come because of government, not in spite of it.
This report clearly shows that in the summer of 2008 when gas prices spiked to more than $4 a gallon, Goldman Sachs, Morgan Stanley, and other speculators on Wall Street dominated the crude oil futures market causing tremendous damage to the entire economy," Sanders said. "The CFTC has kept this information hidden from the American public for nearly three years. That is an outrage.
All in all, the Texas miracle is a complicated story. Some of the state s successes in attracting low-wage workers and businesses from other states could prove difficult or impossible to replicate on a national level. On the other hand, Perry could credibly speak out on housing policy and the need to rethink local zoning restrictions. Or he could always propose a massive new federal stimulus program, of the sort that has kept Texas afloat over the last two years though, for some reason, that idea hasn t made its way into his stump speech yet.
Warren Buffet says- "Last year my federal tax bill- the income tax I paid, as well as payroll taxes paid by me and on my behalf - was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income - and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent."
Economists see a vicious cycle: The economy won't improve until businesses hire, but many won't hire without consumer demand, which is weak because of the slack job market and concerns about the future.
The Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment. It's true that Texas entered recession a bit later than the rest of America, mainly because the state's still energy-heavy economy was buoyed by high oil prices through the first half of 2008. Also, Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending. Despite all that, however, from mid-2008 onward unemployment soared in Texas, just as it did almost everywhere else.
S.& P. and two financial industry groups listened to various proposals for debt reduction and warned the lawmakers of the impact a default would have on world markets, according to a Congressional staff member in attendance. The staff member said the agency was providing guidance on what target to hit in budget savings, but lawmakers struggled to understand the agency s views.
In case you had any doubts, Thursday s more than 500-point plunge in the Dow Jones industrial average and the drop in interest rates to near-record lows confirmed it: The economy isn t recovering, and Washington has been worrying about the wrong things.
The facts of the crisis over the debt ceiling aren t complicated. Republicans have, in effect, taken America hostage, threatening to undermine the economy and disrupt the essential business of government unless they get policy concessions they would never have been able to enact through legislation. And Democrats - who would have been justified in rejecting this extortion altogether - have, in fact, gone a long way toward meeting those Republican demands.
Today on CNN, Erin Burnett reported that she spoke with an investor who talked directly with the credit ratings agency Standard & Poor s. According to the Standard & Poor s source, John Boehner s debt plan would probably still lead to a downgrade of U.S. debt by the ratings agencies, raising interest rates for all Americans.
As congressional negotiators continue to debate the contents of a deficit reduction package, discussions are reportedly tilting toward a deal that will include spending cuts but no revenue increases.
These are interesting times and I mean that in the worst way. Right now we re looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe - which would also wreak havoc in world financial markets.
The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression.
If you were shocked by Friday s job report, if you thought we were doing well and were taken aback by the bad news, you haven t been paying attention. The fact is, the United States economy has been stuck in a rut for a year and a half.
I got into this a bit in today s column, but I think it s worth digging deeper into the size of the revenue concession the White House offered the GOP last weekend, as it s easy to miss if you re not paying attention.
Watching the evolution of economic discussion in Washington over the past couple of years has been a disheartening experience. Month by month, the discourse has gotten more primitive; with stunning speed, the lessons of the 2008 financial crisis have been forgotten, and the very ideas that got us into the crisis regulation is always bad, what s good for the bankers is good for America, tax cuts are the universal elixir have regained their hold.
The recession and financial crisis had a great toll on workers, leading employers to shed jobs by the millions. While the economy is expanding again, jobs are being added slowly and unevenly.
Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates - the people who were most protected from the slings and arrows of recession - the outlook is rather bleak.
Eric T. Schneiderman, the New York attorney general, has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses.
Raj Rajaratnam, the billionaire investor who once ran one of the world s largest hedge funds, was found guilty on Wednesday of fraud and conspiracy by a federal jury in Manhattan. He is the most prominent figure convicted in the government s crackdown on insider trading on Wall Street.
As you may recall, Republicans ran hard against bank bailouts. Among other things, they managed to convince a plurality of voters that the deeply unpopular bailout legislation proposed and passed by the Bush administration was enacted on President Obama s watch.
Republicans are facing a growing backlash over oil subsidies. Not only have top lawmakers faced angry constituents and questions from the press, but even Tea Party activists have called for the GOP to stop giving so much taxpayer money to multinational oil companies
So here it is: it turns out that the Fed s 2 percent target for core inflation is not a target, it s an upper bound. That s not supposed to be how it works. If you really think that around 2 percent inflation is right (I d prefer 4, but that's a different issue), you're supposed to view 1 percent inflation as being just as bad as 3 percent; in a situation in which inflation is below the target rate, you re supposed to see a rise in that rate as a good thing.
There s a movement afoot to mail every taxpayer a taxpayer receipt, a breakdown of how the government spends its money. The goal is to educate people about where their taxes go, since Americans are famously unaware about such matters.
The global economy and its recovery, and the living standards of millions of plain folks, are now at risk from the sudden rise in oil and commodity prices. Gas at the pump is up, and going higher. Food prices are following.
Last week, Mr. Ryan unveiled his budget proposal, and the initial reaction of much of the punditocracy was best summed up (sarcastically) by the blogger John Cole: 'The plan is bold! It is serious! It took courage! It re-frames the debate! The ball is in Obama s court! Very wonky! It is a game-changer! Did I mention it is serious?'
Style: I liked the way Obama made a case for government at the beginning. I liked the way he accused Republicans of pessimism, of abandoning a hopeful vision of America. Good that he went after the Ryan plan and good that he went after the cruelty of that plan. If you ask me, too many percentages. Oh, and whichever speechwriter came up with win the future should be sent to count yurts in Outer Mongolia.
What if you went to a restaurant and found it rather pricey? Still, you ordered your meal and, when done, picked up the check only to discover that it was almost twice the menu price.
The smart thing for us to do right now is to impose a $1-a-gallon gasoline tax, to be phased in at 5 cents a month beginning in 2012, with all the money going to pay down the deficit. Legislating a higher energy price today that takes effect in the future, notes the Princeton economist Alan Blinder, would trigger a shift in buying and investment well before the tax kicks in.
Republican leaders like to claim that the midterms gave them a mandate for sharp cuts in government spending. Some of us believe that the elections were less about spending than they were about persistent high unemployment, but whatever. The key point to understand is that while many voters say that they want lower spending, press the issue a bit further and it turns out that they only want to cut spending on other people.
Two of the four hedge fund employees who are being charged by federal authorities on Tuesday with insider trading previously worked at SAC Capital Advisors, the giant hedge fund run by the billionaire Steven Cohen, according to people familiar with the matter
The Carnival Corporation wouldn t have much of a business without help from various branches of the government. The United States Coast Guard keeps the seas safe for Carnival s cruise ships. Customs officers make it possible for Carnival cruises to travel to other countries. State and local governments have built roads and bridges leading up to the ports where Carnival s ships dock.
Bankers want higher interest rates, despite the persistence of very high unemployment in the United States and Europe, because they say that low rates are feeding inflation. And what worries me is the possibility that policy makers might actually take their advice.
The government commission that investigated the financial crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors, and risky bets on securities backed by the loans.
As if states did not have enough on their plates getting their shaky finances in order, a new bill is coming due from the federal government, which will charge them $1.3 billion in interest this fall on the billions they have borrowed from Washington to pay unemployment benefits during the downturn.
Can Goldman Sachs, the profit-seeking missile of high finance, really make money by investing $450 million in Facebook, at a vertigo-inducing price that values the social-networking company at $50 billion?
If there s one piece of economic wisdom I hope people will grasp this year, it s this: Even though we may finally have stopped digging, we re still near the bottom of a very deep hole.
THE love affair of American investors with the stock market appears to have ended. The year now ending will be the fourth consecutive year in which mutual funds that invest primarily in American stocks experienced net outflows of funds, meaning that investors as a group withdrew more money than they put in. That has happened even though the stock market has flourished over the last two years as it bounced back from lows reached in the spring of 2009 amid worries that the recession at the time would turn into Great Depression II.
Eighteen months after the recession officially ended, the government s latest measures to bolster the economy have led many forecasters and policy makers to express new optimism that the recovery will gain substantial momentum in 2011.
When the financial crisis struck, many people myself included considered it a teachable moment. Above all, we expected the crisis to remind everyone why banks need to be effectively regulated.
Like it or not and I don t the Obama-McConnell tax-cut deal, with its mixture of very bad stuff and sort-of-kind-of good stuff, is likely to pass Congress. ... The deal, we re told, will jump-start the economy; it will give a fragile recovery time to strengthen. I say, block those metaphors. ... Our problems are longer-term than either metaphor implies. And bad metaphors make for bad policy. The idea that the economic engine is going to catch or the patient rise from his sickbed any day now encourages policy makers to settle for sloppy, short-term measures when the economy really needs well-designed, sustained support. ...
The House Democratic Caucus voted Thursday to try to block the tax-cut deal that President Obama struck with Republicans, a move that does not kill the legislation but shows that its opponents are digging in.
But the tax benefits will flow most heavily to the highest earners, just as the original cuts did when they were passed in 2001 and 2003. At least a quarter of the tax savings will go to the wealthiest 1 percent of the population.
President Obama announced a tentative deal with Congressional Republicans on Monday to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy
Back in 2001, former President George W. Bush pulled a fast one. He wanted to enact an irresponsible tax cut, largely for the benefit of the wealthiest Americans. But there were Senate rules in place designed to prevent that kind of irresponsibility. So Mr. Bush evaded the rules by making the tax cut temporary, with the whole thing scheduled to expire on the last day of 2010.
Fannie Mae and Freddie Mac defended their role in the foreclosure crisis in prepared testimony to Congress on Wednesday, while at least one federal regulator said the mortgage giants had contributed to the problem.
The leaders of President Obama's fiscal commission released a final report Wednesday that is full of political dynamite, recommending sharp cuts in military spending, a higher retirement age and reforms that could cost the average taxpayer an extra $1,700 a year.
The projected cost of the $700-billion financial bailout fund - initially feared to be a huge hit to taxpayers - continues to drop, with the nonpartisan Congressional Budget Office estimating Monday that losses would amount to just $25 billion.
The nation s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.
What do the government of China, the government of Germany and the Republican Party have in common? They re all trying to bully the Federal Reserve into calling off its efforts to create jobs. And the motives of all three are highly suspect.
Ben S. Bernanke, the Federal Reserve chairman, argued Friday that currency undervaluation by China and other emerging markets was at the root of persistent imbalances in trade that represent a growing financial and economic risk.
My point was that the wealthiest plutocrats now actually control a greater share of the pie in the United States than in historically unstable countries like Nicaragua, Venezuela and Guyana. But readers protested that this was glib and unfair, and after reviewing the evidence I regretfully confess that they have a point.
If you're not familiar with the controversy surrounding the Federal Reserve System ("the Fed"), here it is in a nutshell: Many people are concerned that the Fed is, instead of the benign central banking system its presented to be, a predatory system designed to fleece the American people.
I come not to bury the manifesto issued last week by President Obama's debt-reduction commission, but to praise the most welcome of its ideas: Slash defense spending along with everything else. The panel's co-chairmen, Erskine Bowles and Alan Simpson, identify $100 billion in defense cuts that could be made in 2015. That would be too little and too late, but what's almost revolutionary is the notion that if we're ever to get this nation back on sound economic footing, we have to cut what Dwight Eisenhower called the "military-industrial complex" down to size. The United States accounts for 46.5 percent of the world's total defense spending, according to a widely accepted recent estimate. The next-biggest spender is China, which has undertaken an immense buildup to become a military as well as economic superpower - yet accounts for just 6.6 percent of the world's total.
A congressional oversight panel is set to warn on Tuesday that a widespread problem of flawed and fraudulent foreclosure paperwork could upend the housing market and undermine the nation's financial stability, just as the issue is coming under greater scrutiny this week in Washington.
Leaders at the Group of 20 summit meeting in South Korea have claimed "big progress" in negotiations after agreeing to tackle global "tensions and vulnerabilities". The leaders reportedly disagreed on the wording of the final communique but decided to gloss over the ongoing debate about their economic policies. Trade imbalances and protectionism have been the major sticking points at the meeting of the world's biggest rich and emerging economies - the group's fifth since the financial crisis exploded in 2008 - in Seoul.
Count me among those who always believed that President Obama made a big mistake when he created the National Commission on Fiscal Responsibility and Reform a supposedly bipartisan panel charged with coming up with solutions to the nation s long-run fiscal problems. It seemed obvious, as soon as the commission s membership was announced, that bipartisanship would mean what it so often does in Washington: a compromise between the center-right and the hard-right.
A draft proposal released Wednesday by the chairmen of President Obama s bipartisan commission on reducing the federal debt calls for deep cuts in domestic and military spending starting in 2012, and an overhaul of the tax code to raise revenue. Those changes and others would erase nearly $4 trillion from projected deficits through 2020, the proposal says.
Exports rose 22.9% on last year and imports were up 25.3%, despite new data showing China's expansion is easing. The $27.1bn ( 17bn) surplus was up sharply on September's $16.9bn and was just behind the year's high of $28.7bn, reached in July. The rise may increase criticism in Washington that Beijing is keeping its currency artificially low to boost exports at the expense of competitors.
The United States trade deficit narrowed more than expected in September, despite near record imports from China, as a weak dollar helped American exports grow for the third consecutive month, a government report showed on Wednesday.
Reporting from Washington The nation's sluggish job market showed signs of life in October: Employers added a net 151,000 jobs over the month, and private-sector job creation was the strongest since April, the Labor Department said Friday. However, the better-than-expected job gains weren't large enough to bring down the unemployment rate, which remained stuck at 9.6% for the third month in a row. A broader measure of unemployment and underemployment, which includes part-time workers who can't find full-time jobs, dropped a notch to 17% last month.
Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run. Although low inflation is generally good, inflation that is too low can pose risks to the economy - especially when the economy is struggling. In the most extreme case, very low inflation can morph into deflation (falling prices and wages), which can contribute to long periods of economic stagnation.
Last year was a terrific year for those at the very top. Professors Hacker and Pierson note in their book that investors and executives at the nation s 38 largest companies earned a stunning total of $140 billion - a record. The investment firm Goldman Sachs paid bonuses to its employees that averaged nearly $600,000 per person, its best year since it was founded in 1869.
So what should we be doing? First, governments should be spending while the private sector won t, so that debtors can pay down their debts without perpetuating a global slump. Second, governments should be promoting widespread debt relief: reducing obligations to levels the debtors can handle is the fastest way to eliminate that debt overhang.
For the life of me, I can t figure out why Wall Street bankers, traders and executives get paid so much money year after year for doing jobs that rarely require them to innovate, enlighten or put their own capital at risk, and have the nasty habit of periodically sinking our economy.
PRESIDENT Obama, the Rodney Dangerfield of 2010, gets no respect for averting another Great Depression, for saving 3.3 million jobs with stimulus spending, or for salvaging GM and Chrysler from the junkyard. And none of these good deeds, no matter how substantial, will go unpunished if the projected Democratic bloodbath materializes on Election Day. Some are even going unremembered. For Obama, the ultimate indignity is the Times/CBS News poll in September showing that only 8 percent of Americans know that he gave 95 percent of American taxpayers a tax cut.
The government reported this week that the real wage and salary income of finance industry employees based in Manhattan rose nearly 20 percent in the first quarter of this year. That surge helped make Manhattan the fastest-growing county in the United States in terms of terms of year-over-year gains in income. Most Wall Street firms pay bonuses in the first quarter of each year, and the figures indicate that bonuses were much higher this year than in the same quarter of 2009. Then, of course, the financial crisis was at its most severe, with stock prices at 12-year lows and major banks being bailed out. It was not a good time to be paying bonuses.
About a month after Washington Mutual Bank made a multimillion-dollar mortgage loan on a mountain home near Santa Barbara, Calif., a crucial piece of paperwork disappeared. But bank officials were unperturbed. After conducting a "due and diligent search," an assistant vice president simply drew up an affidavit stating that the paperwork - a promissory note committing the borrower to repay the mortgage - could not be found, according to court documents
Horror stories have been proliferating, like the case of the Florida man whose home was taken even though he had no mortgage. More significantly, certain players have been ignoring the law. Courts have been approving foreclosures without requiring that mortgage servicers produce appropriate documentation; instead, they have relied on affidavits asserting that the papers are in order. And these affidavits were often produced by "robo-signers," or low-level employees who had no idea whether their assertions were true.
Companies added 64,000 jobs last month, after having added 93,000 jobs in August, the Labor Department reported Friday. But over all, the economy shed 95,000 nonfarm jobs in September, the result of a 159,000 decline in government jobs at all levels. Local governments in particular cut jobs at the fastest rate in almost 30 years.
As many households and small businesses are being turned away by bank loan officers, large corporations are borrowing vast sums of money for next to nothing simply because they can.