Weekly Audit: The Real Legacy of Reaganomics

 

By Lindsay Beyerstein, Media Consortium blogger

Sunday marked the 100th anniversary of the birth of B-movie actor-turned-conservative president, Ronald Wilson Reagan. On the eve of the centennial, economist Yves Smith talked Reaganomics on the Real News Network. Smith argues that Reagan’s real legacy is the deregulation of the U.S. economy that set the stage for the economic meltdown of the late 2000s:

But [with] financial services, you have companies that have state guarantees. That’s the bottom line with the banking system. Ever since the 1930s, we in advanced economies have made the decision we’re not going to let the banking system fail. So if you don’t regulate banks, you have set up the situation that we have now, which is that you have socialized losses and privatized gains. And what have we seen come out of that? Financial crises. When we had a heavily regulated financial system, we had nearly 40 years of hardly any financial crises. When we started deregulating the banks, you saw increasing in frequency and increasing in significance financial crises directly resulting from that.

Spot of Tea?

Ordinary Britons are rallying to the defense of the welfare state. Faced with the deepest public spending cuts in living memory, citizens are taking to the streets to force deadbeat companies to pay their taxes, Johann Hari reports in The Nation. Their federal government has pledged to slash £7 billion in public spending. Cuts to subsidized housing alone will force 200,000 people out of their homes.

A group of friends in a local pub were galvanized by the news that Vodafone, one of the UK’s leading mobile phone companies, owed an astonishing £6 billion in back taxes. Calling themselves UK Uncut, the friends staged a protest outside Vodafone headquarters in London. The meme went viral. In the following days, several Vodafone stores were temporarily paralyzed by peaceful sit-ins.

Hari argues that the success of UK Uncut can teach American progressives a lot about how to build a grassroots counterpart to the Tea Party.

Persistent vegetative states

Big or small, liberal or conservative, state governments are screwed. That’s the upshot of Paul Starr’s latest essay in The American Prospect. Unemployment remains at recession levels and there is little political will to raise taxes. States can’t deficit spend like the feds do. So, the only option is public service cuts, which means firing teachers, doctors, firefighters, and other public workers.

Starr argues that the economic stimulus was a good start, but one that didn’t go far enough. As part of the stimulus, the federal government picked up a larger share of the states’ Medicaid costs. This was a good thing, in Starr’s view, because the extra federal dollars saved jobs while providing health care for the poor. Starr argues that state budget woes during recessions are so predictable, and the consequences so dire, that the Medicaid subsidy should kick in automatically whenever unemployment rises past a predetermined threshold.

Anti-union bill dead in CO

A bill to end collective bargaining for public employees in Colorado died in committee this week, according to Joseph Boven of the Colorado Independent. The bill would have abolished an executive order signed by former Gov. Bill Ritter, which gave state employees the right to organize. If the bill had been enacted, this kind of organizing would become illegal. This bill, sponsored by Sen. Shawn Mitchell (R-Broomfield), was just one of many attempts by Republicans to scapegoat public sector unions for what Mitchell calls the “financial Armageddon” facing state governments.

Smurfs rob Moms

“Smurfing” is money laundering slang for recruiting a lot of low-level accomplices to move money in untraceably small increments. But the word may soon have a new derogatory connotation.

Kevin Drum of Mother Jones reports that a kids’ video game, Smurfs’ Village, is depleting parents’ bank accounts, one wagon of Smurfberries at a time. Capcom’s game offers kids the chance to build the village from scratch. Along the way, they can pay real money for in-game resources. One mother was shocked to receive a $1,400 bill from Apple because her daughter bought innumerable imaginary props, such as $19 “buckets of snowflakes,” and a $100 “wagon of Smufberries.” The purchases require a password, but critics say it’s too easy for clever kids to circumvent the security. As Drum says, if adults want to waste their real dollars on virtual Farmville paraphernalia, that’s fine, but such a racket has no place in kids’ games.

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.

Can't Afford Healthcare? Make More Money.

I came from a dinner this evening where one of my dad's friends complained about the possibility of healthcare reform this year. As we dined on Oysters, Champagne and Filet Mignon, hw lamented on how the United States is headed for socialized medicine and that apparently Obama will put a bullet in his brain once he realizes what a mistake it will be when the public hates him for footing the taxpayers with healthcare bills.

Growing up rich isn't all it's cracked up to be...especially when you were born into humble working class conditions in the rough streets of Bushwick, Brooklyn, and with luck, you ended up in an affulent Long Island neighborhood driving an Audi as your first car.

There's more...

White Priviledge

That diary up there on the rec list has my collar steamed. So, before i go putting the crimp in it, I'm going to ask you to read this:

http://newstandardnews.net/content/?acti on=show_item&itemid=116

Thank you for your time and patience.

You see, when we start to talk white privilege, most people think about being stalked by security in a grocery store. I'm told that happens (and when you, as plainclothes security, are getting calls about a "suspicious individual" that just happens to be YOURSELF, I can acknowledge that yeah, it is happening).

But this world runs on currency, on money and the accumulation of money. And this is where Black people suffer. And will continue to suffer, for crimes long long past.

75% of whites can trace their wealth back to racist policies, be they FHA loans or the Homestead Act (you didn't know that was racist, now didja?)

I don't have time to write a full well researched diary right now, though I'll try and add onto this as the day goes on.

I'm calling for some action, I'm calling for this to get up on the Recommended list, because... America ought to recognize where she is, before she can go anywhere.

Those MILLIONS of blacks mentioned in the rec list are one Layoff away from being one of those POOR blacks. If you're white, you might not get that. But if you have a house, and you're laid off, you can get a second mortgage to pay the rent for a while. You got money, there, that you can depend on.  If you're renting, if the biggest wealth you can lay claim to is a car, which you happen to need to find more work, you don't got that cushion.

There's more...

The Twelve Days of Capitalism (a sing-along post)


This Christmas season, I'm excited to offer a few thoughts on capitalism, consumption, Christmas and crookedness -- while also summing up this week's posts at the Movement Vision Lab.  Here goes.



THE TWELVE DAYS OF CAPITALISM

(to the tune of: The Twelve Days of Christmas)


On the first day of Christmas, Amaad Riverasays we have: 

an economy that favors rich whites.


On the second day of Christmas, even Adam Smith would add:

two separate classes
and an economy that favors rich whites


On the third day of Christmas, Minsun Jipoints out:

(way more than) three exploited workers
two separate classes
and an economy that favors rich whites


On the fourth day of Christmas, Tiny talks about:

(at least) four presents instead of presence
(way more than) three exploited workers
two separate classes
and an economy that favors rich whites


On the fifth day of Christmas, Amy Wolfmade a great film:

(cue organ music)
five problems with big box stores!

(at least) four presents instead of presence
(way more than) three exploited workers
two separate classes
and an economy that favors rich whites


On the sixth day of Christmas, Kathy LeMay taught:

six taboos about wealth
(cue organ music)
five problems with big box stores!
(at least) four presents instead of presence
(way more than) three exploited workers
two separate classes
and an economy that favors rich whites


On the seventh day of Christmas, I still somehow bought:

seven overpriced trinkets
six taboos about wealth
(cue organ music)
five problems with big box stores!
(at least) four presents instead of presence
(way more than) three exploited workers
two separate classes
and an economy that favors rich whites


Okay.  This is getting tedious.  Let's cut to the end....


Eventually by some day of Christmas, we all wised up:

we started shopping local
gave more time then stuff
valued more than money
tackled structural racism
spread the wealth and love
because we're...

(cue organ music)
ALL IN IT TOGETHER!

no more shallow culture
no more credit debt
no more rich and poor
an economy that favors us all!




Happy holidays from the Movement Vision Lab!

And you know you get major props if you record yourself singing this, upload to You Tube and post the link at the Movement Vision Lab!  

There's more...

Disappointment of the Day: Senator Schumer Champions Special Tax Treatment for Billionaires

(by Amy Traub of DMIblog) It must be pretty nice to be taxed like a hedge fund manager. Despite the many millions you are compensated, most of your income isn't taxed at the 35% rate, like ordinary income for the top tax bracket.  Unlike your highly-paid colleagues in other industries, a nifty IRS loophole allows you to pay just 15% in taxes on much of your compensation. On paper, it works because a big chunk of your pay is considered capital gains, not ordinary income. The real world effect is that you get taxed at a similar rate as the guy who makes your morning latte.

The Economic Policy Institute estimates that $6.3 billion in tax revenue is lost every year by providing hedge funds with privileged tax status, with an equivalent amount lost annually by providing these tax benefits to private equity mangers.  

For a federal government stretched at the seams, trying to foot the bill for two wars, increased homeland security, veterans' health care,  health coverage for poor kids, crumbling national infrastructure,  investments in renewable energy, efforts to make college more affordable,  or just making the tax code more fair to middle-class Americans you'd think ending the low-tax loophole for billionaires would be high on the list of new revenue sources. And you'd be right.

There's more...

Diaries

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