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There are no magic wands.

12:47 pm in Economy, Financial Crisis, Government, Media by dakine01

Occupy Wall Street sign

Occupy Wall Street sign

Yesterday afternoon, I stopped by Mr Pierce’s joint and saw he had a post up and the video of Senator Elizabeth Warren’s appearance on CNBC’s Squawk Box this past Friday (July 12), talking about her proposed legislation to reinstate the Glass-Steagall Act from the 1930s. I made it almost to the end of the video snippet Mr Pierce had posted when I heard a preposterous question (Columbia Journalism Review identifies the questioner as one Joe Kernen – and accurately identifies the question as a straw-man):

Sullivan’s dumb question is followed by a straw man question from Joe Kernan about how Glass-Steagall—all by itself—wouldn’t have prevented the financial crisis. Warren has amiably knocked that one down before (not coincidentally, it came from CNBCer and NYTer Andrew Ross Sorkin), and she does here as well.

As I was writing this diary, I came across an article from Fortune Magazine on Monday where the author first claims:

Last week, the unlikely political pair introduced a bill aimed at recreating the 1933 law. The effort is welcomed, but the protections of Glass-Steagall aren’t a cure-all for bank risk today — its repeal didn’t cause the financial crisis. And reinstating the law likely won’t protect Americans from another one.

Then immediately follows this first paragraph with this:

This isn’t to say a law like Glass-Steagall isn’t needed. Warren and McCain’s proposal would separate traditional banks that offer your standard checking and savings accounts insured by The Federal Deposit Insurance Corp. from riskier institutions, such as those involved in investment banking, the sale of insurance products, hedge funds, private equity, and the like.

When did we reach the point where proposed legislation like Glass-Steagall is being presented as a miracle cure/magic wand that will cure all the ills? We do not live in a binary world where the options are all-or-nothing. Senator Warren maintained her composure and pointed out to the Wall St Shills Squawk Box hosts this exact point.

Yet this is no where near the first time we hear Beltway Village Idiots Pundits, Politicians, and Courtiers use the argument that X legislation won’t totally solve a problem in-and-of itself so we should not do anything at all. I’m thinking right now specifically of the opposition to even the most basic expansion of background checks at gun shows. Background checks alone will not solve the problems with the proliferation of guns but they just might keep them out of the hands of some folks who should not be allowed to carry (criminals for example.) Will someone who is intent on obtaining a weapon going to be stopped? Probably not. But what is wrong in making it a tad more difficult for them?

We do not live in a binary world, so let’s stop trying to pretend that the solutions are only binary. Oh, and Jim Cramer? When you have to protest that Senator Warren did not make an impact on the issue of Glass-Steagall with her appearance? You pretty much confirm that she DID make an impact.

And because I can:

Cross posted from Just A Small Town Country Boy by Richard Taylor
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It’s Not the Bad Economic News that Surprises Me

12:08 pm in Economy, Government, Jobs, Unemployment by dakine01

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Unlike economists, I can in no way ever claim to be surprised at all the continuing bad news on the economy (and yeah, I will continue to link to and milk that schtick). Just today, we have the Initial Unemployment Claims report (via CNN):

In the week ended May 28, 422,000 Americans filed for their first week of unemployment benefits, the Labor Department said Thursday.

While that marked a 6,000 decrease from the revised 428,000 initial claims filed the week before, it was worse than economists’ expectations for 413,000 claims.

…snip…

Next up is the government’s monthly jobs report due Friday. Economists surveyed by CNNMoney say they’re expecting to see that 170,000 jobs were created in May and that the unemployment rate eased to 8.9% from 9% in April.

In case you’re wondering, that “revised” figure from last Thursday’s Initial Unemployment Claims report was revised upward from 424K. Given how woefully inaccurate the economists’ predictions have been, I will go out on a limb as I stated yesterday and predict that the BLS numbers for May will be much lower than 170K. I’m thinking more likely closer to a quarter of that (42.5K) but I do hope that I’m wrong. As far as the “unemployment rate” easing, this article from the AP (via Yahoo) this morning (Thursday June 2) goes a long way to explaining why the “official” unemployment rate may drop. Good way to make the figures look better by not counting those who get frustrated and give-up.

Now what does surprise me, still, even after all the evidence that has been provided these last few years, is the apparent drive to push most folks’ wages down to minimum wage (while trying to knock minimum wages down even lower). Back in December, I wrote a “what-if” post based on one person trying to survive living on minimum wage. Of course, the fallacy of my post is minimum wage jobs usually are not 40 hours per week, 52 weeks a year type jobs.

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May Economic/Jobs News Will Not Be Good

10:29 am in Economy, Financial Crisis, Government, Jobs, Media, Unemployment by dakine01

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

The economic reports are starting to come out for May and while there are those economists and Beltway Village Idiots Pundits who are making “gee, everything is just fine” predictions, the verifiable numbers easily refute this attitude.

First up is the monthly report from payroll processor ADP on the private sector jobs creation for May (via Reuters):

The ADP report showed private employers added a scant 38,000 jobs last month, falling from a downwardly revised 177,000 in April and well short of expectations for 175,000. It was the lowest level since September 2010.

The report boded poorly for the key U.S. non-farm payrolls report at the end of the week. Credit Suisse lowered its estimate for Friday’s employment number to 120,000 from its previous forecast of 185,000 and its private payroll estimate to 135,000 from 200,000.

ADP’s number has been weaker than the government’s private payrolls figure for 12 of the last 14 months, making Friday’s government numbers likely to come in above ADP’s report, Credit Suisse said.

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