Sunday, November 30, 2008

Labor Department Lowers Bar for Worker Safety

The Bush Administration's Labor Department has enacted last minute regulations reducing safety for US workers. The new policies would allow for the use of highly toxic materials until there are lengthy industry-specific studies showing ill effects on workers.

According to the NY Times, the Labor Department and its sub-departments "control work-related substances such asbestos, benzene, cotton dust, formaldehyde, lead, vinyl chloride and blood-borne pathogens... the department is constantly considering whether to take steps to protect workers against hazardous substances. Currently, it is assessing substances like silica, beryllium, and diacetyl...."

Although the policy was opposed by the Senate, the Department has the right to enact such measures. The policy was supported by the US Chamber of Commerce, a lobbying group that supports anti-worker policies.

This anti-worker regulation is not the only rule change from Washington. According to the NY Times additional regulations "would allow coal companies to dump rock and dirt from mountaintop mining operations into nearby streams and valleys. Another, issued last week by the Health and Human Services Department, gives states sweeping authority to charge higher co-payments for doctor’s visits, hospital care and prescription drugs provided to low-income people under Medicaid."1


Wednesday, November 26, 2008

The San Francisco Chronicle reports that the US bailout of the fictitious capital market has now reached $8.5 Trillion in obligations. Click on the image below to see the accounting so far.

Tuesday, November 11, 2008

The People's Analysis

I have found that some of the most coherent analysis of social, historical, and economic conditions in the US comes from unpaid writers.

From MO:

"Newsflash dips. Free markets are ruthless. If our markets were truly free, trust me, you wouldn't be talking so highly of them. Ever see a Lion maul something in the serengeti? Now tell me, would you want to play with a lion in its natural habitat? Of course you want a cage around that lion if you're going to go anywhere near it.

The bottom line is that none of you are anything compared to the big shots in the world who have money, brains, and networks of friends you can only dream about.

Most of you are currently indentured servants who owe a quarter or more of your lifetimes earnings to a bank in the form of a house, car, and education. You owe this money inside a system that is designed to funnel more money up to the top, to those big shots I mentioned. The system is made so that when you want to enjoy your success in the form of a home, you pay extra to the rich for that right, and when you want to improve your life in form of an education, you pay extra to the rich for that right.

In the current system you will be devalued due to your economic starting point, regardless of your talent you will be devalued by the simple fact of not being rich already. And should you have extraordinary talent, you will be required by mechanisms in the system to help make the rich richer before you are allowed to join the rich.

And that is a tiny minority that will ever make it to the top like that as most will either luck into it or inherit it.

The bottom line is that capitalism as a truly "free" market would be barbaric, because even as it stands right now, it is unfair.

Now, go forth and keep making that money for the man."

From CA:

"Reading the comments in this post make me think I have landed in lala land with people who neither understand economics or history. Totally free markets result in only one thing 1% of the population owning everything and 99% as their servants or slaves. This is the ultimate conclusion of all free markets and can be observed in certain Asian countries in all of its glory today. Free markets do not encourage growth or innovation, as those who own everything refuse to invest in anything that will not make them richer. Only through regulation is the wealth of a free market forced out of the clutches of the very rich and powerful. The amount of regulation determines how fairly that wealth is spread and how secure the overall economy will be. Teddy Roosevelt and his distant cousin FDR made exactly the right decisions, even though they themselves did not benefit from those decisions. Both Teddy and FDR were among the filthy rich. Without those decisions America would not exist as it does today. America would be a backward third world country still struggling to get out of the mire. Most people I know who want free markets are just looking for the government to get out of the way so they can rape someone else. These people are greedy and amoral, in that they are only concerned about themselves and are willing to do anything to get theirs. That is going back to the mire, not moving ahead. If you really want that type of society, then you need to look at moving to some of those aforementioned Asian countries, and stop calling yourselves Americans."

Monday, November 10, 2008

More High Class Hustles

Three new economic "events" occurred today. All of these events benefit the ultra-rich at the expense of working-class folk.

The US Treasury has given ailing credit card company American Express the status of bank holding company. This allows the corporation to take advantage of the Troubled Asset Relief Program (TARP). American Express can also issue government guaranteed bonds.1

Mortgage bundler Fannie Mae announced that it is likely to require more money in its bailout. The Treasury originally agreed to a $100 Billion plan, but corporate losses have been greater than predicted. FME has an estimated $880 Billion in outstanding debt.2

Insurance giant AIG is receiving additional government assistance. The tab for this bailout has expanded from $80 Billion to more than $150 Billion. AIG has had significant investments in credit default swaps.3


Friday, November 7, 2008

Obama Wins Election as Working-Class Face Tough Times

Journalist and economist Robert Kuttner discusses the political decisions necessary to prevent an economic depression. Kuttner prescribes a large-scale jobs program to fix infrastructure and and an emphasis of IRS reviews on tax-dodging corporate elites and off-shoring corporations rather than reviews of working-class people using the earned income tax credit.


Monday, November 3, 2008

Credit Card Fraud--By the Credit Card Companies

Banks and credit card companies are now reaping the effects of a society that systematically replaced decent worker pay with a society of debt, credit, speculation, usury, and anti-trust violations.

On October 30, American Express reported that it will fire 7000 workers or 10% of its workforce. Business insiders refer to job cuts as "efficiencies," and often reward corporations for this behavior. Apparently, American Express packaged up credit card debts and sold them to investors. But that business appears to be drying up.1

On November 3, Citigroup, a bank and credit card lender, announced a $1.44 Billion loss from its "bonds." Although credit card debt does not pose as great a threat to the economy as the mortgage banking crisis, prognosticators say the credit card situation will worsen in 2009.2

"Bundling" debt into securities was also a factor in the massive failures of the Fannie Mae and Freddie Mac who securitized mortgages from predatory lenders. According to CNBC, "there is roughly $1 trillion of outstanding credit card debt—compared to $14 trillion worth of outstanding mortgages—and in the second quarter of 2008, $385 billion of this had been bundled into asset-based securities, according to the Securities Industry and Financial Markets Association."3

The largest US credit card lenders are Discover Financial Services, Bank of America, Citigroup Inc., JPMorgan Chase, Capital One Financial Corp., American Express Co. and HSBC Holdings. Bank of America, Citigroup, JP Morgan Chase, and Capital One have already received billions in relief from the US Treasury (see 11-13-08 post).4

In other credit news, MasterCard had its second consecutive quarterly loss. The company's loss included a write down for settling a lawsuit against Discover and American Express. MasterCard (36%) and Visa (51%) dominated the credit card market in part by violating anti-trust laws.5

Credit card companies profit by taking a fee, about 2%, from retailers. Retailers assume that consumers will buy significantly more, perhaps 30% more, if they use plastic rather than cash.6

Not surprisingly, as an election nears, relief for working-class debtors facing fates much worse and more permanent than quarterly losses is being discussed but not settled.7