Economy

Why We Need Occupy Wall Street

AP Photo/John Minchillo
Today—the same day that New York’s Mayor Bloomberg had his cops clear Zuccotti Park—Richard Fisher, the president of the Federal Reserve Bank of Dallas, called for breaking up America’s biggest banks, calling them “too dangerous to permit.” Also today, Warren Buffett, in an interview posted on the Business Wire of Berkshire Hathaway, his company, continued his criticism of American plutocracy. “Through the tax code, there has been class warfare waged, and my class has won,” Buffett said. “It’s been a rout. You have seen a period where American workers generally have gone no place, and where the really super rich as a group increased their incomes five for one in this rarified atmosphere.” All of which suggests that Occupy Wall Street has already been a stunning success in changing the nation’s public discourse. Not that Fisher and Buffett hadn’t criticized our economic policies well before OWS set up shop in Zuccotti Park, but they are now not just rich and powerful voices crying out...

Exit Berlusconi, Enter Uncertainty

AP Photo
It was a busy weekend in Italian politics. The Chamber of Deputies passed the latest round of austerity measures, Prime Minister Silvio Berlusconi resigned, and President Giorgio Napolitano mandated Mario Monti, a respected economist and former EU commissioner, to form of a new government of national unity. The backdrop to all this frenzied activity was the country’s growing liquidity crisis: As Italy, the world’s third largest bond market, saw its borrowing costs rise to unsustainable levels in recent weeks, the rest of the planet could only watch in numb horror, as if observing a slow-motion car crash. On Monday, as Monti was in talks with the political parties for the formation of the new cabinet—made up almost exclusively of unelected technocrats—the main index of the Milan stock exchange opened with a 1 percent jump. By the end of the session, though, it was down 2 percent as were the main indices in Spain (-2.2 percent), Germany (-1.2 percent), and France (-1.3 percent). The...

Don't Save Republicans from Themselves

With the Super Committee near collapse, will the Democrats snatch defeat out of the jaws of victory? Republicans, by locking themselves into no new taxes at a time when two-thirds of Americans prefer to tax millionaires instead of cutting Social Security and Medicare, are in a nice pickle. Over the weekend, Republicans on the Super Committee proposed to trade about $300 billion in net revenue increases for more than $2 trillion in permanent tax cuts. Democrats, mercifully, did not take the bait. Some Republicans on the panel, such as Representative Jeb Hensarling of Texas, proposed a “two step” process, whereby the committee would agree on a target figure for revenue increases and leave the details to the tax-writing House Ways and Means Committee and the Senate Finance Committee. But the Texas Two-Step is another trap. Cuts in Social Security and Medicare would be negotiated first, and the details of tax hikes would come later—after Democrats had given up their leverage. Senator Dick...

Generation Y Bother

Young adults entering the workforce today think they'll be worse off than their parents—they're not wrong.

(AP Photo/John Minchillo)
The recession officially ended nearly two and a half years ago, in June 2009, but for the generation of young adults who’ve been trying to take their first steps into adulthood, its effects could shape the future for decades to come. Why is this recession different from other sharp downturns? The standard economic indicators fail to tell the whole story. Yes, unemployment rates for young people remain at the record-high levels they hit at the Great Recession’s peak in 2007, but this is typical for young workers, who tend to be the last group that recovers after a recession—and tend to feel its effects far after the economy has rebounded. The young baby boomers who bore the brunt of the 1981-1982 recession had lower earnings even 15 years after the economy recovered, and during that downturn, the economy only lost half as many jobs as during the Great Recession. For youth entering the workforce today, not only has the sour economy delayed their careers; they are entering a workforce...

Do Regulations Cost Jobs?

One clear consensus emerged at the Republican presidential debate on the economy last week: government regulations are stifling our economic recovery. "I’ve said I’m going to repeal every single Obama-era regulation that costs business over a hundred million dollars. Repeal them all," Rick Santorum said, to no disagreements from the other candidates who all envisioned a robust recovery once regulations were wiped from the books. "The real issue facing America are regulations. It doesn’t make any difference whether it’s the EPA or whether it’s the federal banking, the Dodd-Frank or Obamacare, that’s what’s killing America," Rick Perry said, recalling details for a rare moment. "And the next president of the United States has to have the courage to go forward, pull back every regulation since 2008, audit them for one thing: Is it creating jobs, or is it killing jobs? And if that regulation is killing jobs, do away with it." Are regulations killing jobs? Not really, at least according to...

A State of Chaos

How political failures and stagnant institutions brought Greece to the brink of collapse

A protester chants slogans during a protest in front of the Greek Parliament in Athens on Saturday, Oct. 15 2011. About 2,000 protesters turned up at Syntagma Square, outside Parliament, to protest against a new austerity package that is to be voted upon on Thursday. (AP Photo/Kostas Tsironis)
(AP Photo/Kostas Tsironis) About 2,000 protesters turned up at Syntagma Square, outside the Greek parliament, to protest against a new austerity package agreed to in October. G reece is at the breaking point. The autumn air is filled with despair at falling living standards and the inability to meet ever-burgeoning tax burdens and with fury at the political class, members of which are routinely mobbed, showered with eggs and yogurt, even occasionally beaten. Because of striking public-sector unions, Athens regularly lacks public transport, and its streets are often strewn with garbage. The young, with little hope of productive work, divide their time between rioting and looking for a promising place to emigrate. The older generation, those with families, medical bills, and after-school tuition fees, grimly hold on, cutting consumption down to the absolute necessities and eating into their savings to survive. Sometimes, they take to the streets, too. The middle class, such as it was,...

Occupy Oakland

Each week, the Prospect will be profiling a different "Occupy Wall Street" protest across the country. This week: Oakland. Slideshow Occupy Oakland Encampment Over Time Organizers of Occupy Oakland called for a general strike Nov. 2 as a move against the one percent. Protesters expected thousands to march in solidarity with the group. The bay area's protest has been marked by violent clashes with police resulting in the critical injury of Iraq war veteran Scott Olsen, 24.

Rosie the Riveter and the Ironies of Bentonville

When the doors swung open this morning on Alice Walton’s Crystal Bridges Museum of American Art in Bentonville, Arkansas—funded to the tune of $1.4 billion by the Walton Family Foundation—one of its prize possessions was Norman Rockwell’s iconic World War II-era painting of Rosie the Riveter. The painting features a confident, insouciant Rosie on her lunch break, eating a sandwich, with a riveting gun on her lap, a copy of Mein Kampf that she uses as a footstool, and an American flag fluttering in the background. Given the Walton family’s epic history of mistreating its company’s workers, and its company’s female workers more particularly, the inclusion of Rosie in the permanent collection is almost too ironic for words. Nonetheless (otherwise, this blog post would end right here), a few facts from the annals of Wal-Mart (approximately 48 percent of whose stock is still owned by the Walton family) are in order. Such as the average hourly wage of its 1.4 million American employees...

We're Not in Athens Anymore

The selection of Loukas Papademos as prime minister heralds a new era in Greek politics.

Greek and international media cover the statements of the new Greek Prime Minister Lucas Papademos , centre, outside the presidential palace in Athens, Thursday, Nov. 10, 2011. Papademos was named Thursday as the prime minister of the new Greek interim government, charged with keeping the debt-strapped country out of bankruptcy and firmly in the 17-nation eurozone. After four days of intense political negotiations, the 64-year-old former vice president of the European Central Bank was chosen to lead a coalition backed by both the governing Socialists and opposition conservatives that will operate until early elections in February. (AP Photo/Thanassis Stavrakis)
Greeks, Europeans, and anyone else who knew the score breathed a huge sigh of relief at the news that Loukas Papademos, the former deputy head of the European Central Bank, will be Greece’s new prime minister. His appointment, especially compared with some of the other names that were bandied about during the past few days as candidates for the post, is the best one could have hoped for if—at least if one believes that Greece belongs in the eurozone and that an exit from it, which became an ominously fashionable topic of discussion among Europe’s leaders the last few days, would be a disaster not only for Greece but for the whole euro project. As I mentioned Monday, Papademos is a serious man, who has the background and the respect among European leaders that will allow him to guide Greece through the treacherous months ahead. As the country moves forward—his term is expected to last about four to five months, though as he said yesterday, there is no fixed date for new elections—his...

Obama’s Secret Weapon

Will the electorate blame Congress—not the president—for the sour economy?

(Flickr/DRStarbuck)
Michael Tomasky’s piece deserves a few responses. He begins with some unnecessary swipes at political science: Politics is sometimes a science and other times an art. So here we sit, with the election exactly a year away, and the conventional wisdom in the political press is largely driven by the political-science theory of presidential elections and economic determinism: that is, that the results of presidential elections are pretty much strictly a function of economic conditions, and if those are bad (defined by various measures, chiefly the jobless and growth rates), the incumbent will lose. By that theory, Barack Obama is pretty well doomed. And yet I don’t know a soul who thinks he doesn’t stand a decent chance of winning next year. Let’s ignore the oxymoron “pretty much strictly” and assume Tomasky means “strictly.” First point: This is not what political scientists think about presidential elections. Since I’ve written a direct response to the very Economist article that...

Banker's Choice

In this, Monday, Oct. 30, 2006 file photo provided by the Italian presidency, Italian President Giorgio Napolitano, right, shakes hands with Mario Monti on the occasion of the opening of the academic year at the Bocconi university in Milan. Italy's president has unexpectedly named Wednesday, Nov. 9, 2011, as a senator-for-life Mario Monti, the former European competition commissioner who is widely considered to be a top contender for the Italian premiership, now that Silvio Berlusconi has pledged to resign soon. The surprise move Wednesday night could be a prelude to Monti's getting the nod to head the next government. President Giorgio Napolitano's office announced he had chosen Monti, who now runs prestigious Bocconi University in Milan, for the honor. Senators-for-life include notable figures outside of politics and have voting privileges in the Senate. (AP Photo/Enrico Oliverio,Italian Presidency Press office, File)
So Greece has a new prime minister – Lucas Papademos – and Italy looks about to have a new one, too – Mario Monti. To which not just you and I but damn near every Italian and Greek responds, “Who?” Neither Papademos nor Monti has ever held elective office, or even run for one. Neither has been a minister, sub-minister or even civil servant in one of their nation’s ministries. Neither has developed, or sought to develop, a public following from their careers as economic technicians, chiefly on the European supra-national level. Yet each is about to lead a major nation. Papademos and Monti are something new under the sun: national leaders elected by the markets. Imposed, not as pro-consels by foreign occupiers, but by the European banking community, by the finance ministers of the Eurozone powers – chiefly, Germany and France. Each has an impressive resume and a good reputation with the centrist political and economic elites of his own nation, but there’s no reason why the person on the...

Relief for Chicken Farmers

The USDA updates rules protecting small-livestock farmers from big business.

Flickr/Stirwise
Late last week, the United States Department of Agriculture (USDA) sent new rules designed to protect small-scale livestock farmers to the White House for final approval. Farmers have waited more than three years for the changes, which the USDA was directed to review in the 2008 farm bill. The rules haven’t been updated for several decades and have often gone unenforced. In the meantime, the meatpacking industry has grown more powerful, and small farmers have struggled to make ends meet. That is especially true in the chicken industry, in which farmers have basically been forced to contract with a handful of chicken-processing companies and have seen their wages decline drastically. I wrote about it last year for the Prospect in a piece called “The Serfs of Arkansas.” The updated rules will reform the way poultry packers contract with their farmers. Before they can be issued as final, the Office of Management and Budget will determine their cost. The rules will guide the way the Grain...

The Return of Sanity

Issue 2 opponents cheer at a rally co-sponsored by the Cleveland Teachers Union and We Are Ohio in Cleveland as they hear election results sounding the defeat of Issue 2 in the Ohio general election on Tuesday, Novmber 8, 2011. By voting no on Issue 2, Ohioans overturned the controversial Senate Bill 5, which, among other things, limited collective bargaining for 350,000 unionized public workers. (AP Photo/Amy Sancetta)
The common thread in yesterday’s unbroken string of Democratic and progressive victories was the popular rejection of right-wing overreach. From Ohio, where voters overturned by a margin of 61 percent to 39 percent Republican Governor John Kasich’s law stripping public employees of collective-bargaining rights; to Maine, where voters overturned by a margin of 60 percent to 40 percent Republican Governor Paul LePage’s law abolishing Election Day voter registration; to Arizona, where voters recalled Republican state Senate Leader Russell Pearce, the most vehemently anti-immigrant state legislator in the nation; to, will-wonders-never-cease, Mississippi, where voters rejected an initiative declaring a fertilized egg a person from the moment of conception, effectively outlawing abortion and just maybe birth control as well, by a decisive margin of 57 percent to 43 percent, voters shouted a resounding STOP to the rightward gallop of public policy at the hands of the radicalized Republican...

Bunga Bunga and the Bond Market

It’s clear that the markets don’t want Silvio Berlusconi to continue as Italy’s prime minister. They were cheered yesterday, briefly, when word got around that Berlusconi was stepping down, then subsided into their accustomed grumpiness when he denied it. (We know this by following the interest rates on Italy’s bonds, which are soaring, save during the brief moment when it was thought Berlusconi’s departure was nigh.) But the markets’ moment may be at hand. The leaders of two of Europe’s Mediterranean governments are either hanging by a thread (Berlusconi) or have already gone (Greece’s George Papandreou), unable to reconcile the demands of their people not to have their lives decimated by austerity with the markets’ demands for precisely such austerity. Such a moment marks a triumph of the market over democracy, queasy as I am to identify Berlusconi with democracy. After all, it was Berlusconi who brought the logic of the market, and of marketing, into Italian politics, controlling...

Democrats Misbehave, Obama Gets the Time-Out

http://www.flickr.com/photos/robr/2912198704/sizes/m/
When it comes to addressing the economic crisis, creating jobs, or tackling the deficit, Congress is at a standstill and the American people know it. This morning, a poll from the National Journal shows Americans have little faith that Congress will take on the issues that matter most. For example, 68 percent of respondents said it was "very important" for Congress to spend money in order to create new jobs, but only 27 percent thought it was likely to happen. Another poll, this one by The Washington Post , found that 50 percent of Americans believe Republicans are holding up President Obama's jobs bill for political reasons. The public sentiment expressed in these polls should spell disaster for Republicans who are perceived to be recklessly blocking popular legislation. In elections today and a year from now, these sentiments should play to Democrats' favor. The problem, however, is that in hard economic times, the president takes the blame, even if the other party deserves a hefty...

Pages