TARP – the infamous Troubled Assets Relief Program that bailed out Wall Street in 2008 – is over. The Treasury Department announced it will be completing the sale of the remaining shares it owns of the banks and of General Motors.
But in reality it’s not over. The biggest Wall Street banks are now far bigger than they were four years ago when they were considered too big to fail. The five largest have almost 44 percent of all US bank deposits.
That’s up from 37 percent in 2007, just before the crash. A decade ago they had just 28 percent.
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The biggest banks keep getting bigger because they can borrow more cheaply than smaller banks. That’s because investors believe the government will bail them out if they get into trouble, rather than force them into a form of bankruptcy (as the new Dodd-Frank law makes possible). ( Continue… )
The number of new jobs created in December (155,000), and percent unemployment (7.8), were the same as the revised numbers for November.
Also, about the same number of people are looking for work (12.2 million), with additional millions too discouraged even to look.
Put simply, we’re a very long way from the job growth we need to get out of the gravitational pull of the Great Recession. That would be at least 300,000 new jobs per month.
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All of which means job growth and wage growth should be the central focus of economic policy, not deficit reduction. ( Continue… )
The battle over the fiscal cliff was only a prelude to the coming battle over raising the debt ceiling – a battle that will likely continue through early March, when the Treasury runs out of tricks to avoid a default on the nation’s debt.
They got some concessions from the White House but didn’t get what they wanted – which led us to the fiscal cliff.
So we’ve come full circle. ( Continue… )
The deal emerging from the Senate is a lousy one. Let me count the ways:
1. Republicans haven’t conceded anything on the debt ceiling, so over the next two months – as the Treasury runs out of tricks to avoid a default – Republicans are likely to do exactly what they did before, which is to hold their votes on raising the ceiling hostage to major cuts in programs for the poor and in Medicare and Social Security.
2. The deal makes tax cuts for the rich permanent (extending the Bush tax cuts for incomes up to $400,000 if filing singly and $450,000 if jointly) while extending refundable tax credits for the poor (child tax credit, enlarged EITC, and tuition tax credit) for only five years. There’s absolutely no justification for this asymmetry.
3. It doesn’t get nearly enough revenue from the wealthiest 2 percent — only $600 billion over the next decade, which is half of what the President called for, and a small fraction of the White House’s goal of more than $4 trillion in deficit reduction. That means more of the burden of tax hikes and spending cuts in future years will fall on the middle class and the poor. ( Continue… )
Are House Republicans – now summoned back to Washington by Speaker John Boehner — about to succumb to public pressure and save the nation from the fiscal cliff?
Don’t bet on it.
Even if Senate Minority Leader Mitch McConnell cooperates by not mounting a filibuster and allows the Senate to pass a bill extending the Bush tax cuts to the first $250,000 of everyone’s income, Boehner may not bring it to the House floor.
On a Thursday conference call with House Republicans he assured conservatives he was “not interested” in allowing such a vote if most House Republicans would reject the bill, according to a source on the call. ( Continue… )
It’s easy to feel discouraged about the bullying by right-wing Republicans and their patrons over everything from gun control to taxes and social safety nets to trade unions and jobs.
Every year about now I watch “It’s a Wonderful Life” again to remind myself what Frank Capra understood about America — its essential decency and common sense.
In many ways the nation is better than it was in 1946 when the movie first appeared. Women have gained economic power and reproductive rights; we enacted Civil Rights and Voting Rights and, through Medicare and Medicaid, dramatically reduced poverty among the elderly; we began to tackle environmental devastation; we stopped treating gays as criminals and have even started to recognize equal marriage rights. We elected and then re-elected the first black president of the United States. We have enacted the bare beginnings of universal healthcare.
But we are still in danger of the “Pottersville” Capra saw as the consequence of what happens when Americans fail to join together and forget the meaning of the public good. ( Continue… )
Remarkably, John Boehner couldn’t get enough House Republicans to vote in favor of his proposal to keep the Bush tax cuts in place on the first million dollars of everyone’s income and apply the old Clinton rates only to dollars over and above a million.
What does Boehner’s failure tell us about the modern Republican party?
That it has become a party of hypocrisy masquerading as principled ideology. The GOP talks endlessly about the importance of reducing the budget deficit. But it isn’t even willing to raise revenues from the richest three-tenths of one percent of Americans to help with the task. We’re talking about 400,000 people, for crying out loud. ( Continue… )
Why is the President back to making premature and unnecessary concessions to Republicans?
Two central issues in the 2012 presidential election were whether the Bush tax cuts should be ended for people earning over $250,000, and whether Social Security and Medicare should be protected from future budget cuts.
The President said yes to both. Republicans said no. Obama won.
But apparently the President is now offering to continue to Bush tax cuts for people earning between $250,000 and $400,000, and to cut Social Security by reducing annual cost-of-living adjustments. ( Continue… )
It was the centerpiece of the President’s reelection campaign. Every time Republicans complained about trillion-dollar deficits, he and other Democrats would talk jobs.
That’s what Americans care about — jobs with good wages.
And that’s part of why Obama and the Democrats were victorious on Election Day.
It seems forever ago, but it’s worth recalling that President Obama won reelection by more than 4 million votes, a million more than George W. Bush when he was reelected — and an electoral college majority of 332 to Romney’s 206, again larger than Bush’s electoral majority over Kerry in 2004 (286 to 251).The Democratic caucus in the Senate now has 55 members (up from 53 before Election Day), and Republicans have 8 fewer seats in the House than before.
So why, exactly, is Washington back to obsessing about budget deficits? Why is almost all the news coming out of our nation’s capital about whether the Democrats or Republicans have the best plan to reduce the budget deficit? Why are we back to showdowns over the deficit? ( Continue… )
I keep hearing that the billionaires and big corporations that poured all that money into the 2012 election learned their lesson. They lost their shirts and won’t do it again.
Don’t believe that for an instant.
It’s true their political investments didn’t exactly pay off this time around.
“Right now there is stunned disbelief that Republicans fared so poorly after all the money they invested,” said Brent Bozell, president of For America, an Alexandria-based nonprofit that advocates for Christian values in politics.