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Weekly Audit: Hostage-Taking Over the Debt Ceiling

8:34 am in Uncategorized by TheMediaConsortium

By Lindsay
Beyerstein, Media Consortium blogger

The latest contrived showdown
between Congressional Republicans and the White House is over what
concessions the GOP will demand in order to increase the federal debt
ceiling.

George Zornick of The Nation explains how the shakedown works:

Congress now needs to approve any borrowing past the $14.3
trillion debt ceiling, which the United States will reach “no later” than
May 16, according to Treasury Secretary Timothy Geithner. If Congress
doesn’t raise the debt ceiling, the government would have to stop
spending—including stopping interest payments on those Treasury bonds,
meaning that the United States would effectively default on its
debt.

The debt ceiling has to be raised and everyone
knows it. Surely the Republicans knew it when they voted for tax cuts for
the rich with borrowed money. If the debt ceiling is not raised, the
United States will default on some of its obligations. Just like what
happens after you miss a credit card payment, the country’s creditors will
demand higher interest in order to lend to us in the future.

Playing chicken with the debt ceiling is a recipe for increasing the
national debt. Paul Waldman argues in The American Prospect that
the Republicans hate government so much that they are willing to declare war on the economy in a quixotic
bid to smash the state:

The reason we’re now seeing an
unprecedented amount of attention paid to a vote that ordinarily passes
with little notice is that the Republican Party’s agenda is being set by
a group of ideological radicals who seem quite willing to cripple the
American economy if that’s what it takes to strike a blow against the
government they hate so much.

Peak
Crazy

At AlterNet, Joshua Holland explains why failure to
raise the debt ceiling would be an economic
catastrophe
that could jeopardize the economic recovery. “Peak Crazy,”
he calls it.

However, Holland notes that a showdown over the debt
ceiling does not risk an immediate government shutdown, like the one we
faced over the budget battle. Borrowing isn’t the only way that government
agencies are funded. The government could still spend the $150 billion or
so it takes in every month in tax revenue, for example.

Yet, Senate
Minority Leader Mitch McConnell (R-Kentucky) has announced that 47 GOP
senators oppose raising the debt ceiling unless “credible attempts” are
made to cut federal spending. Meanwhile the Tea Party is launching an
all-out lobbying effort to urge House Republicans not to raise the debt
ceiling without major spending cuts.

The Tea Party’s wish list
includes some total pipe dreams like a balanced budget amendment to the
constitution, and a law to require a two-thirds majority for all future
tax increases. Former senator and current U.S. presidential hopeful Rick
Santorum cheerfully announced that he would let the United States default
on its debt if health care reform is not repealed. Rep. Michele Bachmann
(R-Minn) helpfully suggests paying the interest on Treasury Bills using
money that would otherwise go to Social Security.

Shoot the
hostage

Cenk Uygur of the Young Turks argues that
Democrats are panicking needlessly and, once again, offering needless preemptive concessions to the
Republican fringe in the form of a proposed “hard cap” on government
spending, which would cap new government spending, and subtract any
overruns from social welfare programs like Medicare and Social
Security.

The truth, Uygur notes, is that Wall Street has already
told the Republicans in no uncertain terms that the debt ceiling will be
raised. The economic consequences of doing anything else would be
unthinkable. The Tea Party can yell and scream, but the adults have
already made the decision. Knowing this, Democrats should not be trying to
placate the Republicans so as to induce them to do something they will
ultimately end up doing.

Digby on Social
Security

Democrats are wavering in their decades-long
commitment to defend Social Security,
Heather Digby Parton (a.k.a., “Digby”) writes in In These
Times:

In a quixotic attempt to fix the problems
in the current economy without confronting the plutocrats, the Democrats
are using the illogical argument that since Social Security is projected
to have a shortfall in 35 years, we must cut benefits now. And they seek
to prove to “the market” that the government is fiscally responsible by
showing it’s willing to inflict pain on its citizens—in the
future.

Even if we do nothing, Social Security can pay
out full benefits for the next 35 years. There is no crisis. A small
increase on the payroll cap on Social Security could shore up the program
for generations to come. Republicans oppose Social Security because they
are ideologically opposed to social welfare programs, not because Social
Security is broken.

This post features links to the best
independent, progressive reporting about the economy by members of The Media Consortium. It is
free to reprint. Visit the Audit for
a complete list of articles on economic issues, or follow us on Twitter. And for the best
progressive reporting on critical economy, environment, health care and
immigration issues, check out The Mulch, The Pulse
and The
Diaspora
. This is a project of The Media Consortium, a network of
leading independent media outlets.

Campaign Cash: The Tea Party Jets to Grassroots Rallies, Wall Street-Style

8:35 am in Uncategorized by TheMediaConsortium

Flickr/scottjlowe

by Zach Carter, Media Consortium blogger

Two Tea Party leaders, Mark Meckler and Jenny Beth Martin, have been jet-setting all over the country ginning up support for conservative politicians. Literally.

They’ve been flying around in a private jet like Wall Street CEOs, except they’re heading to “grassroots” rallies instead of merger talks. Meckler and Martin don’t say how outraged, ordinary citizens can find the money to support such extravagance, and they don’t have to. Thanks to the Supreme Court’s ruling in this year’s Citizens United v. the Federal Election Commission, they can now accept unlimited funding without disclosing the identities of their donors.

No one would even know about the jets themselves, but Meckler and Martin never counted on Mother Jones, or a reporter named Stephanie Mencimer. Using public flight-tracking information, the Tea Party Patriots’ flight schedule, and some serious attention to details in the group’s own videos, Mencimer was able to figure out which jet the not-so-populist duo were using. She then traced the plane to Raymond F. Thomson, founder and CEO of a semiconductor company called Semitool, which he sold last year for a cool $364 million.

It’s both sad and hilarious to see the secret financial arrangements of the super-rich masquerading as grassroots activism. But it also shows the lengths to which reporters must go to actually report on political spending in the wake of Citizens United. There is no documentation to follow, just the contrails of private jets.

Social groups target state races

And while secret political spending has been dominated by big corporations this cycle, the legal maneuvering that liberated corporate coffers was actually performed by fringe right-wing groups targeting social issues. As Jesse Zwick emphasizes for The Washington Independent:

Groups advocating against abortion and gay marriage have waged a low-grade war on laws restricting their ability to spend money freely in elections since the early 1980s, and their victory in the recent Citizens United ruling has hardly caused them to rest on their laurels.

Our democracy is now more beholden to corporate greed than ever, but at least gays won’t be allowed to visit each other in the hospital.

This is just the beginning of corporate rights

But the implications of Citizens United extend far beyond the (critically important) realm of campaign finance itself, as Jeff Clements and John Bonifaz of the organization Free Speech for People emphasize in an interview with Amy Goodman and Juan Gonzales of Democracy Now! As Bonifaz notes:

Citizens United was not just a campaign finance case, it was a corporate rights case. In fact, it was an extreme extension of a corporate rights doctrine that has eroded the First Amendment for thirty years.

At its core, Citizens United grants First Amendment rights to corporations on the grounds that corporations are people, just like ordinary citizens. Sound crazy? It is.

The bill of rights for corporations?

As AlterNet’s Joshua Holland emphasizes in an interview with historian Thom Hartmann, the implications of the view that corporations are people are simply absurd. Now corporations have been granted First Amendment rights, but what happens when they start arguing for Second Amendment rights? And what would it even mean for a corporation to have Second Amendment rights?

A visual map of Campaign Cash

What are the most common themes and issues surrounding the untold amounts of cash flowing into this election cycle? To create that visual, the Media Consortium piped 10 articles by our members through Wordle. While all the articles were generally focused on this topic, they were picked at random and published between October 25-29.

For clarity’s sake, we made “Tea Party” “TeaParty,” “Supreme Court” became “SupremeCourt,” and we also merged the first and last names of key players such as Karl Rove and Jim DeMint. Finally, we removed any extraneous words such as “the,” “and,” and “even.” We did not combine the words corporate/corporation/corporations or Republican/Republicans (but examine the frequency as much as the size). To get the latest reporting on the funds feeding into the mid-term elections, go to www.themediaconsortium.org or follow the search term #campaigncash on Twitter. Wordle research by Amanda Anderson.

But wait, there’s more!

This post features links to the best independent, progressive reporting about the mid-term elections and campaign financing by members of The Media Consortium. It is free to reprint. Visit The Media Consortium for more articles on these issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Will Obama Save Homeowners From Wall Street’s Latest Fraud Scheme?

7:45 am in Uncategorized by TheMediaConsortium

by Zach Carter, Media Consortium blogger

A massive foreclosure fraud scandal is rocking the U.S. mortgage market. Wall Street banks and their lawyers are fabricating documents, forging signatures and lying to judges—all to exploit troubled borrowers with enormous, illegal fees, and in some cases, improperly foreclose on borrowers who haven’t missed any payments.

The fraud is so widespread that it could put some big banks out of business and even spark another financial collapse. Fortunately, things haven’t fallen apart just yet. With strong leadership from President Barack Obama and Congress, the government can help keep troubled borrowers in their homes and prevent another meltdown.

One fraud begets another

As Danny Schecter emphasizes in an interview with GRITtv’s Laura Flanders, this mess is just one element of a broader, criminal fraud at the heart of the foreclosure fiasco and resulting financial crisis. Banks pushed fraudulent loans onto borrowers during the housing bubble because the loans could be packaged into mortgage-backed securitizations and pawned off on hedge funds and other banks. Banks made a lot of money from this process, until the mortgages went bad and the fraud-packed securities plummeted in value.

Document drama

At the heart of any mortgage is a document called “The Note”, which lays out the terms of the mortgage and the kinds of fees that banks can levy against borrowers if they fall behind on their payments. Owning the note also gives banks the right to foreclose when a borrower stops paying.

The trouble is, in an effort to cut costs and boost bonuses, banks haven’t kept actually kept track of the note—in fact, they’ve actively destroyed the document so they don’t have to deal with filing it. Now that mortgages are going bad, banks are taking advantage of the documentation vacuum they created to levy massive, illegal fees on borrowers both before and during the foreclosure process. They do this by manufacturing fake documents, forging signatures, and getting bogus signatures from notaries to approve sham documents.

This is all terribly unfair to borrowers. In some cases, illegal fees push borrowers over the edge into foreclosure, while in others, borrowers get saddled with tens of thousands of dollars in illegal fees after getting kicked out of their home. The situation is a national disgrace.

Failure to produce

But the situation also creates legal liabilities that can push banks into failure. If banks can’t pony up the note, they don’t have the right to foreclose—not without some serious, expensive legal maneuvering. And what’s more, if the banks who created these shoddy securities can’t supply notes, investors who bought the securities can force losses back on the banks that created them. Given that there are $2.6 trillion in mortgage-backed securities out there, banks are very worried that losses and lawsuits stemming from shoddy documentation could spark another round of major financial turmoil.

The sheer lack of documentation makes it very difficult for investors to decipher which banks are exposed to loads of red ink, and which banks are not. That’s a recipe for financial panic.

Silencing whistleblowers

The banks know they’re in serious trouble. That’s why, as Andy Kroll notes for Mother Jones, mortgage servicers like GMAC are trying to silence whistleblowers who can explain the extent of these frauds. GMAC employee Jeffrey Stephan confessed to robo-signing 10,000 foreclosure documents every month without actually examining them. His acknowledgment sparked the current public scrutiny of foreclosure fraud, which has expanded to banks including JPMorgan Chase and Bank of America.

Kroll was one of the first to report on these fraudulent foreclosure mills and their illegal fees, and his coverage of the issue is essential reading for anybody following the unfolding crisis. Kroll also highlights the wave of new investigations and inquiries being launched by attorneys general in eight states, a phenomenon that is likely to expand as the crisis widens.

As Annie Lowrey details for The Washington Independent, one of those states is Ohio, where Attorney General Richard Cordray is suing GMAC, seeking $25,000 in damages for every fraudulent document the company has filed. In Ohio alone, there have been 190,000 foreclosures over the past two years. Cordray hasn’t won his suit, and not every foreclosure will include fraud, but that’s a potential loss of over $7 billion to GMAC from foreclosures in Ohio alone over the past two years. And that doesn’t include what would be much higher losses to banks who packaged the mortgage securities, who are forced to repurchase them by burned investors.

Banks are doing their best to minimize the appearance of scandal, but the scope of potential losses from outright fraud is quite clearly a threat to the viability of the financial system. It’s easy to imagine a disaster scenario in which the government has no choice but to take major action to prevent the economy from imploding (yes, it can actually get worse).

Obama needs to pick up the slack

So far, President Obama is sending mixed signals about his intentions. As Steve Benen notes for The Washington Monthly, Obama vetoed a bill that would have made it harder for borrowers to show that banks were engaging in fraud during the foreclosure process. That was on Friday—but by Sunday, top Obama adviser David Axelrod was telling the press that the administration was not ready to support a foreclosure moratorium, dismissing the fraud crisis as a set of “mistakes” with lender “paperwork.”

As I note for AlterNet, Axelrod’s comments are a complete mischaracterization of what’s going on in the foreclosure process, and of what can be done. The housing market is a mess because banks have been systematically committing fraud. We cannot rely on such fraudsters to fix the mess– some kind of government action is going to be necessary. Whatever the solution, the administration cannot stand with big Wall Street banks against the borrowers and investors that are being defrauded. Any solution must take the interest of troubled borrowers as paramount. We’ve already tried saving the banks without saving homeowners, and as the unfolding foreclosure fraud crisis illustrates, it didn’t work.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Can Elizabeth Warren Save the Economy?

8:41 am in Uncategorized by TheMediaConsortium

by Zach Carter, Media Consortium blogger

President Barack Obama’s decision to appoint Elizabeth Warren to set up the new Consumer Financial Protection Bureau (CFPB) couldn’t have come at a more critical time.

Over 44 million Americans were living in poverty last year. That’s the highest number on record. The Great Recession is taking a terrible toll on everyone outside the executive class, but policymakers have been reluctant to pursue an economic agenda that improves the lives of ordinary Americans.

The uniqueness of Warren’s new post raises plenty of questions, but it puts a fierce defender of the middle class in office at a time when the middle class most needs help.

So what exactly will Elizabeth Warren do?

As Annie Lowrey emphasizes for The Washington Independent, it’s not entirely clear what Warren’s new job will be or how long she will have it.

Consumer advocates have pushed hard to get Obama to name Warren the first director of the new CFPB. Obama, citing Senate confirmation hurdles, has instead charged Warren with setting up the agency as an adviser to both the Treasury Department and Obama himself. The post allows Warren to get to work setting up the agency, but not the power to start drafting regulations. It’s good to see her get a post on the Obama team, but we do not yet know how influential she will be.

Tim Fernholz sums up the pros and cons of Warren’s appointment in a piece for The American Prospect. There are very real drawbacks to the move. Confirming Warren for a permanent post as director of the CFPB will be harder next year—Democrats are likely to lose Senate seats in November.

It’s not impossible, but if confirmation was Obama’s chief worry, he’s only made it harder on himself by kicking the nomination down the road. This is true for whoever Obama picks—the bank lobby is going to scream about anybody other than a bank lobbyist, and Republicans are filibustering almost everybody Obama nominates to any post, including critical economic policy positions at the Federal Reserve.

Getting to work

But the new role also gets Warren on the economic policy team right away, and allows the agency to begin staffing up under her stewardship, even if it can’t draft regulations until a permanent director has been confirmed. There will finally be a strong voice on Obama’s economic team prioritizing household financial security above all else. That’s very good news.

Whatever the formal powers of Warren’s new post, we can be sure she’ll have a significant impact on policy making. Her current role as chair of the oversight panel for the Wall Street bailout was given almost no power at all by Congress, yet Warren has transformed it into the only real source of economic accountability in Washington, D.C. That’s no easy task, and we can expect similar courage and creativity from her as a member of Obama’s economic team.

What will the CFPB look like?

Warren herself seems to be pleased with the appointment. In a piece for AlterNet, Warren says that she "enthusiastically agreed" to take on the new position, and explains the vision for the CFPB:

"The new consumer bureau is based on a pretty simple idea: People ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them — way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market."

Sea change

That sounds common-sense, but it’s exactly opposite to the past three decades of deregulation. Reversing the damage caused by that anti-regulatory fervor has been extremely difficult. The Obama administration needs Warren’s voice now more than ever. In the early days of his presidency, Obama pushed through a stimulus plan that has prevented the middle class from falling completely off the map. But those efforts are expiring, and they haven’t been enough to prevent millions of families from sinking into poverty.

Alarming poverty rate

In a harrowing piece for The Nation, Kai Wright notes that more people are now impoverished than at any time since the government began tracking poverty data. The poverty rate rose to 14.3 percent, with 44 million Americans—roughly one in seven—living in poverty. More than one-third of black and Latino children are growing up impoverished.

So it’s no surprise that income inequality is also at its most severe in decades. As Kevin Drum notes for Mother Jones—for the past thirty years, more and more American wealth has been concentrated among the richest citizens. The richest 1 percent of U.S. earners are raking in 10 percent more of the national income today than they were at the start of the Reagan administration, while the poorest 95 percent have seen their share of the national income decline.

Numbers like these aren’t a fluke—they’re a direct result of policies that put the interests of Wall Street and other powerful corporate players ahead of the well-being of households. Nor were these policies adopted in a vacuum– Wall Street lobbied hard for the right to pillage our pocketbooks, and when it couldn’t rewrite the rules, it simply broke them while bank-friendly regulators looked the other way. Elizabeth Warren can’t fix all of this on her own, and she’ll surely face opposition from some members of Obama’s inner circle. But families couldn’t ask for a better advocate, and her appointment couldn’t come at a better time.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Why Do Deficit Hawks Hate Social Security?

8:27 am in Uncategorized by TheMediaConsortium

by Zach Carter, Media Consortium blogger

Last week, Social Security advocates learned something they had long suspected. Arguments for cutting Social Security aren’t really about economics or the deficit. They’re all about waging war on social services.

In short, some very prominent policymakers are out to dismantle Social Security on ideological grounds. The most recent example of this view comes from Alan Simpson, a former Republican Senator from Wyoming who now serves as co-Chair of President Barack Obama’s Federal Debt Commission. Earlier this summer, Simpson was caught on video spreading absurd lies about Social Security, but his latest outburst explains why he’s been so willing to distort the facts. Simpson simply hates Social Security.

As Joshua Holland highlights for AlterNet, Simpson fired off a nasty email to Ashley Carson, who advocates for elderly women, in which he referred to the most successful social program in U.S. history as "a milk cow with 310 million tits."

Social Security is doing just fine

But Simpson has a lot of power on the Debt Commission, which is expected to recommend that Congress reduce the deficit by cutting social programs in a report this year. But as Holland notes, Social Security isn’t in trouble:

Social Security is in fine shape. It’s got a surplus that will run out in 2037, but even if nothing were to change by then, it could still continue to pay out 75 percent of scheduled benefits seventy-five years from now, long after the surplus disappears, and those benefits would still be higher than what retirees receive today.

What’s more, as William Greider notes for The Nation, Social Security has never added one cent to the federal budget deficit. According to the law that created the program, Social Security never can. Targeting Social Security in order to fix the deficit is like invading Iraq to fight Al-Qaeda. The issues are not related.

Raising the retirement age robs workers

The Debt Commission is likely to recommend raising the retirement age—the age at which Social Security benefits begin to be paid out. But as Martha C. White notes for The Washington Independent, it’s a "solution" that simply robs low-income workers of their tax money. Everybody pay Social Security taxes when they work, and when they retire, they receive federal support. If you don’t live long enough to actually retire, you don’t get any benefit from Social Security.

"The hardship of raising the retirement age falls disproportionately on low-income workers who work in physically demanding professions, jobs they may not be able to continue through their seventh decade. … Moreover, though the average lifespan has increased since Social Security’s creation, those extra years aren’t enjoyed equally by all Americans. Overall, Americans are living about 7 years longer. But the poorest 20 percent of Americans are living just two years longer."

Raising the retirement age, in other words, disproportionately hurts the poor—the very people Social Security is supposed to help most.

Subprime scandal 2.0

So who would pick up the slack if Social Security were to be cut? The same crooked Wall Street scoundrels who brought us the financial crisis. If the government cuts back on retirement benefits, the financial establishment can step in and manage a bigger piece of the retirement pie. The more we learn about the financial mess, the less we should want to see our retirement money controlled by bigwig financiers. Truthout carries a blockbuster new investigative report by ProPublica’s Jake Bernstein and Jesse Eisinger that reveals a new, multi-billion-dollar subprime scam engineered by the financial elite.

We’ve known about Wall Street’s subprime shenanigans for some time, but the report reveals that banks were essentially selling their own products to themselves in order to create the illusion that people really wanted lousy mortgages. It’s called "self-dealing," and it’s supposed to be illegal.

Subprime Disaster, meet Mortgage Nightmare

Here’s how the scam worked: Wall Street crammed thousands of mortgages into securities, then sliced and diced those securities into new products called CDOs. Those CDOs, in turn, were divided into different "buckets" and sold to investors. The riskiest buckets paid out the most money to investors, but were the most likely to take losses if the underlying mortgages ever went bad. As the housing bubble grew more and more out-of-control, investors became wary of these risky buckets, and stopped buying them.

Wall Street banks were still making a killing from the packaging and sale of everything else, though, so they devised a plan to get rid of some risky bits: they’d buy them up themselves, without telling anybody. A bank would create a CDO called, say, Mortgage Nightmare CDO. Then it would create a separate CDO, called, say, Subprime Disaster CDO. Subprime Disaster would buy up a risky bucket from Mortgage Nightmare, creating the illusion to the market that banks were still able to sell off risky mortgage assets without any trouble, even though the bank was basically just selling garbage to itself.

That illusion propped up the prices of these risky assets and created more revenue for the tricky bankers who sold them, and plump, short-term profits for the banks. It also strongly encouraged other bankers to issue lousy mortgages to the public, since those loans could be packaged into lousy CDOs and score short-term profits for Wall Street’s schemers.

Ultimately, this scheming resulted in a multi-billion-dollar disaster for Wall Street, which taxpayers ended up footing the bill for. Anybody want to see that happen with Social Security?

Social programs did not cause the deficit

As Seth Freed Wessler notes for ColorLines, deficit hawks’ emphasis on social programs is at odds with the factors that actually created the deficit. The Bush tax cuts, the wars in Iraq and Afghanistan and the bank bailouts are the big-ticket items when it comes to government revenues and expenses. Yet deficit hawks in Congress have been refusing to extend paltry unemployment benefits or food stamps to the people hit hardest by the recession. And pretty soon they’re going to go after Social Security too.

In reality, the deficit is only a problem if investors are afraid that the government will default on its debt. Markets measure this worry with interest rates—high rates mean investors are worried, low rates mean they are not. Right now, interest rates on government bonds are at their lowest in decades. With the recession dragging on and the recovery weakening, now would be a great time for the government to spend more money to create jobs and help those knocked out of work.

Instead, the policy debate features cranky old men whining about 310-million-titted cows.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Brown-Nosing Wall Street Reform

8:44 am in Uncategorized by TheMediaConsortium

by Zach Carter, Media Consortium blogger

More than two years after the collapse of Bear Stearns, the House and Senate finally ironed out their differences on Wall Street reform in the wee, small hours of Friday morning. The bill now goes back to both the House and Senate for final approval, but it’s fate in the Senate is uncertain following the defection of Tea Party Sen. Scott Brown (R-MA).

The resulting bill has several things going for it, but largely misses the critical structural lessons of the Great Financial Crash of 2008. As Wall Street continues to score epic profits and grotesque bonuses over the coming months, progressives must be committed to continuing the fight for a fair economy.

Megabanks intact

As Andy Kroll explains for Mother Jones, the bill essentially lets too-big-to-fail banks off the hook. Megabanks like J.P. Morgan Chase and Citigroup will not be broken up into smaller institutions that could fail safely, nor will they be required to exit many of their most reckless business ventures. One of the most promising reforms still on the table as Congress moved on the bill was a plan to ban banks from gambling with taxpayer money—and Congressional leaders sabotaged it at the last minute.

As Tim Ferhnolz notes for The American Prospect, instead of strengthening the bill by negotiating with committed reformists like Sens. Maria Cantwell (D-WA), and Russ Feingold (D-WI), Senate leadership chose to cut a deal with Tea Party favorite Scott Brown (R-MA). Brown’s price? Allowing banks to gamble by running their own proprietary hedge funds. After Senate negotiators gave Brown what he wanted, he suddenly reversed his support for the bill on Saturday morning.

Derailed by in-fighting

Essentially, petty interpersonal spats overwhelmed the push for real reform. Cantwell and Feingold’s objections to the legislation were correct so far as policy substance were concerned, and Cantwell always made clear that her vote could be won by simply closing a huge loophole in the bill. But after the two Democrats voted against the bill for being unnecessarily weak on the Senate floor, Sen. Chris Dodd (D-CT) simply shut them both out of the negotiation process. This would be funny, if it weren’t true.

Brown had already proved his ability to go back on his word with Senate negotiators just a few weeks prior. He was a committed "yes" vote when the bill went to the Senate floor, but unexpectedly reversed his position at the last minute, causing the legislation to fail the first time it came up for a vote. But instead of trying to cut a deal with progressives, Dodd decided to roll the dice again with Brown, and the legislation now finds itself in limbo, with Senate approval uncertain.

A slight improvement

But despite its unnecessary shortcomings, the Wall Street reform bill is still an improvement over the status quo, as I emphasize for AlterNet. We get a stronger set of consumer protections, along with a thorough audit of the Federal Reserve. The Fed served as the government’s principal bailout engine throughout the crisis, pumping $4 trillion into the nation’s financial system with almost no accountability or oversight. Bringing these massive bailout operations into the light should build momentum for broader reforms, but it’s up to engaged citizens to make that a reality.

There are plenty of major policy battles brewing that directly involve the financial industry. As Dean Baker notes for Truthout, the current economic policy agenda is a Wall Street executive’s dream. Lawmakers are seriously considering slashing Social Security while ignoring an unemployment catastrophe and leaving troubled homeowners out in the lurch. These are all catastrophic economic errors in the making.

Foreclosed again

As Annie Lowrey reports for The Washington Independent, Fannie Mae unveiled a new policy last week to punish borrowers who owe more on their mortgages than their home is worth. As home prices have plunged in value over the past three years, huge swaths of borrowers owe their bank hundreds of thousands more than their home is worth. Now many borrowers, realizing that they are pissing away huge amounts of their monthly income to a ruthless bank, are making the perfectly rational decision to walk away from their mortgage.

In cases where borrowers can, in fact, afford to continue making payments, but simply do not want to waste their money, walking away is called a "strategic default," and there is nothing wrong with it. Both parties knew the terms of the mortgage agreement when it was signed, and a well-paid, professional banker signed off on it. Borrowers are not violating a contract by failing to pay—in a mortgage, the borrower keeps paying the bank, or the bank gets the house. Walking away just means that the bank gets the house.

But, of course, bankers are upset that they didn’t predict the downturn in home prices, even though this is part of their job description, and the reason they get paid big bucks. When borrowers walk away, bankers lose money. So banks putting pressure on the government, Fannie Mae and Freddie Mac to punish borrowers who walk away, and Fannie Mae has acquiesced by agreeing to shut borrowers out of the mortgage market for seven years, and harassing them in court for unpaid mortgage balances.

Your right to rent

As Greg Kaufmann emphasizes for The Nation, there are much better policy alternatives. Instead of slamming borrowers, the government could encourage bankers to write down their total debt burden to whatever their house is currently worth. Bankers don’t want to do that, because it means taking a loss, and when agencies like Fannie Mae are willing to intimidate borrowers to line bankers’ pockets, why should bankers agree to play ball?

According to Kaufmann, one of the best ways to get banks to negotiate seriously with borrowers is to establish a right-to-rent policy. Borrowers who receive a foreclosure notice would get the right to rent their current home at a fair market rate, determined by a court, for up to five years. Bankers don’t want to be landlords, so the provision would force them to negotiate with borrowers in trouble by imposing an unpleasant new duty on the bank. If bankers still didn’t want to negotiate, borrowers would have five years to find a new place to stay. It’s great policy, and legislation to implement it has already been introduced in the House.

The final version of the Wall Street reform bill is worth supporting, but it won’t fix the foreclosure crisis or prevent bankers from taking outrageous risks that put the entire economy in jeopardy. Many key reforms are still necessary, and it’s up to progressives to keep the pressure on lawmakers to make sure they are enacted in the coming months.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Deficit Reduction = Selling Out to Wall Street

9:33 am in Uncategorized by TheMediaConsortium

by Zach Carter, Media Consortium blogger

In the fall of 2008, decades of finance-first, bankers-know-best economic policies coalesced to create one of the worst economic crises in history, one that the banks themselves could not survive without staggering levels of government support.

Yet astonishingly, nearly two years after the crash, Wall Street is still setting the economic agenda in Washington. As Congress begins to examine broader economic policy, lawmakers are under heavy Wall Street pressure to reduce the federal budget deficit—even though that could mean deepening the jobs crisis without any substantive economic benefits.

Small-bore reforms

At the same time, the financial reform bill that Congress is on the verge of passing leaves quite a bit to be desired. As the editors of The Nation emphasize, that legislation includes several small-bore fixes to ease the damage caused by Wall Street excess, but almost nothing to actually curb the excesses themselves. The capital markets casinos will largely be left untouched. Congress still has time to improve the bill over the next month as the House and Senate iron out their differences, and many useful reforms remain in play.

Nevertheless, Wall Street’s lobbyists have succeeded in taking the most important reforms off the table. We will not break up the biggest banks this year, nor will we tax reckless financial speculation. We aren’t even banning economically essential banks from participating in risky securities businesses.

Et tu, Buffet?

As Annie Lowrey notes for The Washington Independent, the crisis has even discredited Warren Buffett, one the few financial superstars who previously had a reputation as a "straight-shooter" that invested in responsible enterprises.

Buffett was once a harsh critic of credit rating agencies, the firms who slapped top ratings on toxic mortgage-backed securities and derivatives. But Buffett himself is also a top shareholder in Moody’s, one of the worst ratings agencies. The Financial Crisis Inquiry Commission had to compel Buffett’s testimony at a recent hearing via subpoena after Buffett turned down multiple requests to appear. At the hearing itself, Buffett did everything he could to pass the buck from himself and Moody’s to any other possible target.

Slashing the deficit

Wall Street’s ugly influence on economic policy extends far beyond the realm of bank regulation itself. Right now, financial elites are pushing hard on a right-wing plan to slash the federal budget deficit, and even many moderate Democrats are coming out in support of reduced government spending.

This strategy is a tremendous political blunder, as Steve Benen emphasizes for The Washington Monthly. It’s true that the deficit does not poll very well—but the deficit is only one side of the issue. Cutting the deficit means slashing federal support for jobs—we can help the economy or we can slash the deficit, but we cannot do both at the same time.

Nearly everyone believes that creating jobs should be a top priority for the government, but if politicians only ask questions about the deficit, they won’t hear answers about the economy. The political imperative is clear, as Benen notes:

This really shouldn’t be complicated: invest in more job creation, help struggling states as they keep laying off workers, and make clear to voters that the economy is more important than the deficit. Do this immediately, without apology.

Replacing Social Security with credit cards?

Wall Street loves cutting social services in the name of deficit reduction. Every public good that can be efficiently provided for by the government can also be inefficiently provided by the private sector—replacing public benefits with corporate profits. The bank lobby would like nothing more than to replace Social Security with credit cards for senior citizens. Wall Street doesn’t make a dime on the government’s Social Security payments—but they can make a killing on a privatized market.

Weak job growth=Weak private sector

Lest there be any question about whether or not the government needs to take strong action to strengthen the labor market, take a look at Friday’s jobs report. As Tim Fernholz notes for The American Prospect, this report was the most disappointing piece of economic news in months. While the economy gained 431,000 new jobs during the month, 411,000 of them were temporary hires by the U.S. Census, meaning the private sector is not able to support much new hiring.

There’s a critical lesson there: The only serious engine of job growth in the month of May was the federal government. Absent government hiring, the economy is not improving at all. There is an almost bottomless supply of critical social needs that require work right now, but no private-sector momentum to meet those needs.

The BP oil catastrophe should underscore how important new, green energy is to the U.S. economy—yet U.S. efforts to develop green energy solutions have fallen far behind those of China and other industrial powerhouse nations. Major federal investment into the research and implementation of green energy would be good for our environment and good for our economy.

Don’t let social services suffer

But astoundingly, the advice on the world economy currently coming from top policymakers at the Federal Reserve, the International Monetary Fund and European central banks is echoing the bank lobby line: Slash social programs now, and let the job market fend for itself. As Dean Baker emphasizes for AlterNet, these are the exact same policymakers who missed the housing bubble, made the wrong calls on bank regulation and sent the global economy into freefall.

There has been little change in personnel and no acknowledgment of error at the central banks whose incompetence was responsible for the crisis . . . . their agenda seems to be the same everywhere, cut back retirement benefits, reduce public support for health care, weaken unions and make ordinary workers take pay cuts.

In short, Wall Street and the Wall Street policy agenda remain ascendant, despite economic catastrophe. In the Great Depression, the government actually learned its lesson—we regulated the banks, created Social Security and put millions to work through government hiring programs. That same basic agenda is needed today. Failing to meet it could well mean decades of economic decline.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Why Democrats Must Focus on Jobs Now

8:33 am in Uncategorized by TheMediaConsortium

by Zach Carter, Media Consortium blogger

The job market in its worst state since the Great Depression and is putting tremendous strain on millions of Americans. Without action from Washington, D.C., the unemployment rate will remain elevated for years to come, and almost certainly above 9 percent through the end of 2010. Public esteem for economic policymakers isn’t doing so hot either. There are several simple steps that President Barack Obama and Congress could take to create jobs, but of late, neither have shown much interest in doing so.

Jobs matter

As Tim Fernholz emphasizes for The American Prospect, one of the best opportunities to repair the job market is a piece of legislation authored by Rep. George Miller (D-CA). The bill’s strategy is straightforward: Local governments pinched by the recession can apply for federal funds to ensure that teachers, cops, and other public servants are not laid off in the name of balanced budgets. Local governments that have already let employees go could apply for funding to re-hire them.

The result would be a clear win for the economy. Miller estimates that his bill could create 750,000 jobs, while the Economic Policy Institute expects the bill could create as many as 945,000. It’s also a smart political move—Obama’s political adversaries would no doubt find some way to criticize the move (they invented death panels for health care, after all), but as Fernholz notes, voters care much more about getting back to work than they do about ideological warfare or abstract bloviations about the federal budget deficit.

The deficit vs. jobs

And the federal budget deficit is no excuse for inaction on jobs. In the middle of a recession, providing funding for jobs can ultimately be deficit-reducing. More people working means more people buying goods and services. That means higher tax receipts for the government on a variety of fronts.

The deficit only matters if it is so severe that investors are skittish about lending money to the government. We would see this nervousness in the interest rates on U.S. Treasury bonds—the rate would be very high, as investors demanded a high return for the risk they were taking on. But in fact, interest rates are very low—the interest rate on 30-year bonds is currently just over 4 percent, while it frequently eclipsed 9 percent during the presidency of George H. W. Bush.

War doesn’t improve the economy

But if lawmakers wanted to take action on the deficit, there is no reason why they should do so at the expense of jobs. Congress just approved an additional $60 billion in funding for the war in Afghanistan, while refusing to provide a $28 billion for teachers in the name of deficit reduction. Congress has officially spent $1 trillion on the wars in Afghanistan and Iraq, as Robert Greenwald notes for AlterNet, wars which have done little to improve either U.S. economic or foreign policy goals:

These wars aren’t making us safer. They aren’t worth the cost, and we don’t need them. What people do need are jobs and help when they don’t have enough work or any work at all. But instead of leading on the jobs issue, they’re delaying and dissembling about the cost– while spending trillions on war.

Indeed, the failure of Congress to take action on jobs before its Memorial Day recess means that over one million Americans will stop receiving unemployment benefits within a month’s time.

Tax time

As Art Levine emphasizes for Working In These Times, spending is only half of the budget equation. The other half is revenues, which means taxes. There are all kinds of ways that the government could responsibly raise taxes and use that money to create jobs. One political no-brainer would be requiring hedge fund mangers and private equity kingpins to pay taxes at the same rates as those of other billionaires.

Thanks to a George W. Bush-era tax cut, these Wall Street titans are taxed at rates as low as 15 percent, dramatically lower than the 35 percent tax rate for rich people who make their millions in the form of salary rather than interest on investments. Levine also details a host of jobs initiatives that were ultimately axed in favor of concerns about the deficit.

Tax the speculators

As Sarah Anderson notes for Yes! Magazine, taxing financial speculation itself could help give our economy a double jolt. By taxing risky Wall Street gambling, the government could bring in billions to spend on jobs. If that tax discouraged Wall Street traders from engaging in risky gambling, the lower levels of speculation would help insulate our economy from the kinds of shocks it received in the fall of 2008.

Come November, the top concern at the polling place will correspond closely to the top concerns of consumer pocketbooks. Tough economic times will mean losses for incumbents in both political parties, but the party that does the most to create jobs will do the most to curb its losses. It will also be pursuing responsible public policy, and advancing the well-being of its constituents.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Wall Street Goes to the Movies

10:10 am in Media by TheMediaConsortium

by Zach Carter, Media Consortium blogger

Last week, the U.S. Senate rejected a plan that would have broken up the nation’s six largest banks firms into firms that could fail without wreaking havoc on the economy. Even though the defeat reinforces Wall Street’s political dominance, there is still room for a handful of other useful reforms, like banning banks from gambling with taxpayer money and protecting consumers from banker abuses. After looting our houses, banks are now pushing for the ability to bet on movie box-office receipts, and will keep trying to financialize anything they can unless Congress acts.

Wall Street calls the shots

Writing for The Nation, John Nichols details last week’s Capitol Hill damage. Today’s financial oligarchy, in which a handful of bigwig bankers and their lobbyists are able to write regulations and evade rules they don’t like, will still be in place after the Wall Street reform bill is passed. The lesson is clear, as Nichols notes:

Whatever the final form of federal financial services reform legislation, one thing is now certain: The biggest of the big banks will still be calling the shots.

Still worth fighting for

As I emphasize for AlterNet, Congress has made a terrible mistake here, but there is still room for reform. It took President Franklin Delano Roosevelt seven years to enact his New Deal banking laws. It took even longer to reshape public opinion of monopolies when President Theodore Roosevelt took on Corporate America in the early 1900s.

What’s still worth fighting for? We have to curb the derivatives market—the multi-trillion-dollar casino that destroyed AIG. We have to impose a strong version of the Volcker Rule, which would ban banks from engaging in speculative trading for their own accounts. We have to change the way the Federal Reserve does business and force the government’s most secretive bailout engine to operate in the open. And we have to establish a strong, independent Consumer Financial Protection Agency to ensure that the horrific subprime mortgage abuses are not repeated.

As Nomi Prins details for The American Prospect, the current reform bill will not effectively deal with the dangers posed by hedge funds and private equity firms—companies that partnered with banks to blow up the economy through investments in subprime mortgages. That means that whatever happens with the current bill, Congress must again take action next year to rein in other financial sector excesses.

The derivatives casino at the movies

As Nick Baumann demonstrates for Mother Jones, banks are doing everything they can to gobble up other productive elements of the economy. The economy crashed in 2008 in large part because banks had used the derivatives market to place trillions of dollars in speculative bets on the housing market. This wasn’t lending, it was pure gambling: Instead of using poker chips, bankers placed their bets with derivatives. But, as Baumann emphasizes, banks are now looking to expand the sort of thing they can make derivatives gambles with. The latest proposal is to allow banks to bet on the box office success of movies. That’s right, banks would be gambling on movies.

Hollywood may be shallow, but it isn’t stupid. It doesn’t want to see the banking industry repeat its destructive looting of the housing industry on the movie business, and is pushing hard to ban banks from betting on movies. But we can’t count on every industry having a powerful lobby group to counter every assault from the banking system.

Taking stock in schools

Consider the unsettling report by Juan Gonzales of Democracy Now!. Gonzales details how big banks gamed the charter school system to score huge profits while simultaneously saddling taxpayers with massive debts that make teaching kids supremely difficult. By exploiting multiple federal tax credits, banks that invest in charter schools have been able to double their money in seven years—no small feat in the investing world—while schools have seen their rents skyrocket. One school in Albany, N.Y. saw its rent jump from $170,000 to $500,000 in a single year.

About that unemployment rate…

It’s not like public schools are flush with cash right now. The $330,000 increase in rent could pay the salaries of more than a few teachers. As the recession sparked by big bank excess grinds on, even the good news is pretty hard to swallow. As David Moberg emphasizes for Working In These Times, the economy added 290,000 jobs in April, but the unemployment rate actually climbed from 9.7 percent to 9.9 percent in March. That’s because the unemployment rate only counts workers who are actively seeking a job—if you want a job but haven’t found one for so long that you give up, you’re not technically "unemployed." All of those "new" workers are driving the official figures up.

In other words, it’s still rough out there. And likely to stay rough as state governments try to deal with the lost tax revenue from plunging home values and mass layoffs. Nearly half of all unemployed people in the U.S. have been out of a job for six months or more. And while we’d be much worse off without Obama’s economic stimulus package, that percentage is likely to grow this year, Moberg notes.

This is what unrestrained banking behemoths do. They book big profits and bonuses for themselves, regardless of the consequences for the rest of the economy. Congress absolutely must impose serious financial reform this year. After the November election, breaking up the banks must once again be on the agenda when Congress considers the future fate of hedge funds, private equity firms, Fannie Mae and Freddie Mac. If we don’t rein in Wall Street, banks will continue to wreak havoc on our homes, our jobs and even our schools. Congress must act.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Congress Must Get Tough On Wall Street

8:38 am in Uncategorized by TheMediaConsortium

by Zach Carter, Media Consortium blogger

Congress returns from its April recess this week with financial reform at the top of its to-do list. With millions of Americans still bearing the brunt of the worst recession in 80 years, Congress needs to start protecting our economy from Wall Street excess, and repair the shredded social safety net that has allowed the Great Recession to exact a devastating human cost.

Big banks are an economic parasite

In an excellent multi-part interview with Paul Jay of The Real News, former bank regulator William Black explains how the financial industry has transformed itself into an economic parasite. Black explains that banks are supposed to serve as a sort of economic catalyst—financing productive businesses and fueling economic growth. This was largely how banks operated for several decades after the Great Depression, because regulations had ensured that banks had incentives to do useful things, and barred them from taking crazy risks.

The deregulatory movement of the past thirty years destroyed those incentives, allowing banks to book big profits by essentially devouring other parts of the economy. Instead of fueling productive growth, banks were actively assaulting the broader economy for profit. None of that subprime lending served any economic purpose. Neither do the absurd credit card fees banks charge, or the deceptive overdraft fees they continue to implement.

As Matt Taibbi explains in an interview with Amy Goodman and Juan Gonzales of Democracy Now!, banks didn’t just cannibalize consumers. They also went directly after local governments, bribing public officials to ink debt deals that worked wonderfully for the banks, and terribly for communities. In Jefferson County, Ala., J.P. Morgan Chase helped turn a $250 million sewer project into a $5 billion burden for taxpayers. The deal generated nothing of value for either citizens or the economy, but J.P. Morgan Chase was still able to line the pockets of its shareholders and executives. This kind of behavior was illegal, but the transactions involved were complex financial derivatives, which are not currently subject to regulation. To this day, nobody at J.P. Morgan Chase has been prosecuted for bribery or corruption.

Congress set to avoid tough regulations

There is a clear need for Congress to enact some firm restrictions against risky and predatory bank activities. But at the behest of Treasury Secretary Timothy Geithner, Congress is doing its best to avoid inserting any hard terms in legislative language, instead leaving the specifics to federal regulators to work out. As Tim Fernholz emphasizes for The American Prospect, this is an exercise in futility. Regulators already have the power to impose more stringent rules on nearly every arena of Wall Street business that matters (derivatives are a very noteworthy exception). If they wanted to fix things, they could do it without Congressional help. The trouble is, the financial sector has polluted most of the regulatory agencies, so that many regulators now act more like lobbyists for the banks they regulate, rather than law enforcers. Indeed, as I note for AlterNet, the top bank regulator in the U.S. spent over a decade lobbying for the nation’s largest banks before taking up his current job. If Congress doesn’t establish firm rules, regulators under future administrations would be free to simply undo any measures that the current agencies actually implement.

Megabanks equal mega risks

As Stacy Mitchell illustrates for Yes! Magazine, most of the problems in the financial sector are connected to the size of our banking behemoths. Big banks have enormous power—if they fail, the economy goes off a cliff. As a result, any responsible government wouldn’t allow any of our megabanks to actually fail. But knowing that the government will protect them from any true catastrophes, big banks take bigger risks—if the risk pays off, they get rich, if it backfires, taxpayers will suck it up. That puts the interests of big banks at odds with the public interest, and creates an economy where bankers don’t try to finance useful projects with a safe and steady return, but instead back crazy bets that just might pay off.

You can’t fix that problem with regulations or idle threats of taking down a big bank when it gets itself in trouble—the markets won’t believe it, and the banks will still take risks. The only solution, Mitchell notes, is to break up the banks into smaller institutions that can fail without wreaking havoc on the economy.

Economic inequality weakening the economy

All of this ties into rampant economic inequality in the United States. Since the 1970s, conservatives have waged a constant battle on the social safety net, shredding protections for ordinary people, while empowering corporate executives to take advantage of them. In an illuminating blog post for Mother Jones, Kevin Drum highlights the fact that average income has only rose from about $20 an hour in 1972 to $23 an hour today. This isn’t because workers were slacking off—productivity has increased at roughly five times that rate. In other words, nearly all of the economic gains since the Nixon era have accrued to the wealthy.

When people don’t have access to strong and improving income, they finance things with credit. But if wages never actually improve, that debt becomes a significant burden. When an entire society finds itself overly indebted, people stop buying things, and the economy tanks. The predation in the American financial sector makes this problem even worse.

But political theatrics are even trumping efforts to provide relief to those hit hardest by the recession. Sens. Jim Bunning (R-KY) and Tom Coburn (R-NE) have blocked the extension of unemployment benefits twice in the past month. As Kai Wright emphasizes for ColorLines, that recklessness puts up to 400,000 Americans at risk of losing their unemployment checks. That’s a human tragedy—hundreds of thousands of people will have no way to pay the bills. It’s also bad for business, since those people won’t have any money to buy things that businesses produce. It is, in short, short-sighted economic insanity.

The economy is supposed to work for everybody, not just the rich, not just bankers. For that to happen, politicians have to establish meaningful regulations to make sure finance works for the greater good– and safety nets to make sure that anyone who falls through the cracks doesn’t see her life prospects permanently diminished.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.