This post originally appeared at Speak Out California.
As we face this state budget crisis, we would like to remind people that it didn’t have to be this way. The Democrats in California’s legislature tried to do the responsible thing to keep the state running and head this off, and passed a good budget in January. The Republicans and the Governor instead wanted to create a crisis and force the state into bankruptcy.
From January, Schwarzenegger vetoes budget bills,
Gov. Arnold Schwarzenegger this afternoon vetoed the Democratic plan to reduce the budget deficit by $18 billion and will urge lawmakers to use his January proposal as a template for implementing midyear cuts…
The move forces leaders to start over in their efforts to close a budget deficit estimated at $40 billion over the next 18 months. It jettisons — for now — what Democrats hailed as “the only game in town” — because it included tax increases approved without Republican votes.
Democratic leaders sent Gov. Arnold Schwarzenegger an $18 billion deficit-cutting package on Tuesday, a plan he quickly vetoed as anti-tax groups filed a lawsuit to stop it.
The activity came amid the Legislature’s third special session since the November election to deal with California’s worsening budget deficit, projected at $42 billion over the next 18 months.
For some reason, it has been forgotten that this budget would have solved this problem and avoided the May 19 election and resulting chaos. But the anti-tax extremists blocked it because they don’t want government to work, they want it to shut down. It is a strategy they are following because it keeps their base active and brings them corporate donations. They do not believe in government, they have said so, and they have all signed a pledge to that effect.
The Democrats should be strategic as well as responsible and pass this budget again. This time if the Governor vetoes it or the anti-tax extremists take it to court they will be doing so while people’s own schools are forced to lay of teachers, and their own police departments are being forced to reduce patrols. It won’t be hypothetical, it will be happening in their neighborhoods and their cities. The public will be able to see for themselves who is trying to keep the state running, who is trying to keep their schools open, and who is trying to shut the state down. And if it goes to court they will be forced to ask why we do not have majority rule in California, how there can be a law allowing a small number of extremists to block everything.
Click through to Speak Out California.
Corporations have convinced the public that government and government spending are bad.
Question, was Eisenhower building the interstate highway system good or bad for the economy, the public and for corporations?
Being a poll worker is a long and rewarding day. I had to be at my precinct – a half-hour drive – at 6am. Set up the polling place and the machines, do the paperwork, and open the polls at 7am.
Close the polls at 8pm. Then take down everything, reconcile the ballot count — unvoted ballots from the morning, provisionals, spoiled ballots, machine count, etc…
The vote has gone overwhelmingly against the propositions. The comments from voters that I overheard were always about how the legislature wasn’t doing its job and they resented it. i didn’t hear a single comment about taxes.
This was not a vote against taxes. It was a vote against legislative dysfunction, secrecy, and structural ungovernability.
I’m starting to get it, about how these bailouts work.
In the 90s and 2000s Wall Street made billions and billions of “profits” and the people working there made millions and hundreds of millions each, placing bets with “credit default swaps.” The upside was all in the sale of these — the downside happens if mortgages and loans go bad.
So the money from selling these credit default swaps was supposed to be set aside as reserves to cover potentinal losses, but was instead handed out as profits and bonuses.
So when the mortgages and loans did go bad, instead of those people paying up from the billions the companies made and the hundreds of million that individuals made, instead you and I taxpayers are paying off on these bets.
They get to keep the money that they called “profits” back then, even though they were not profits, but were supposed to be set aside to cover the losses that might happen later. When the losses did happen later, we pay it off for them and they keep the private jets, mansions and yachts.
And the reason this is happening is because the Wall Street types put some of the money into paying off people in Washington, and “lobbying” and into right-wing think tanks, etc. The people with the power to make us pay off those losses are being paid or otherwise influenced by the money that was called “profits” in previous years, but which really should have been used to cover these losses.
Is that about right?
When the Republicans were preparing to invade Iraq people were out in force in demonstrations. According to BBC News, on Feb 15, 2003, hundres of thousands of people demonstrated against the coming invasion in the United States – 250,000 just in San Francisco, and as many as 10 million people worldwide.
The U.S. corporate press — at the time complicit in the invasion preparations — barely covered these demonstrations, so most Americans did not know that there was a great deal of opposition to the coming invasion.
Fast forward to today. President Obama is going to speak at Notre Dame – a Catholic university. A dozen or so right-wingers are protesting because Obama believes that women should have the right to make their own health care decisions. And this is almost the only thing in the news. You cannot turn on the corporate cable news channels or the corporate radio without hearing about the huge controversey about the President coming to speak.
How many people were enriched by the Treasury Department’s illegal leaking of the “stress test” results?
Question: is this being investigated and will it be prosecuted? Or do we still have a politicized law enforcement system?
The Senate Permanent Investigations subcommittee puts the annual tax loss at $100 billion; Treasury sets the figure at $123 billion. Collecting those lost billions could mean that Americans could pay no withholding tax from November 15 to December 31; it could pay for healthcare for about 20 million of the roughly 50 million Americans without health insurance.
. . . Congress should pass a law funding pursuit of every major tax cheat, just as we pursue every killer, rapist and drug dealer. Using offshore accounts to cheat the government out of $50,000 or more for two or more years should be made a felony per se. Then let’s provide an escape hatch, which would spare prosecution of anyone who fesses up and fully pays taxes, penalties and interest. The same law should make public the name and details of every person or company that skips the opportunity to make things right.
Why do we tolerate these offshore tax and corporate scams? Why don’t we just put an end to it — and get better schools, health care, etc. out of the deal?
I have questions about the bailouts and I can’t seem to get answers. This by itself means there are big problems with the bailouts and the rest of this effort to restore the economy. I am a citizen in a (supposed) democracy and I am not getting enough information to allow me to do my job. As a citizen I’m in charge of all of this, yet I don’t know where my money is going, how it is being used, what alternatives were considered, who is profiting, who is gaming the system, and I can’t find out.
Like the old Soviet Union, when the institutions that are supposed to provide information are not trusted – or are not there – rumors and alternate explanations (read: “conspiracy theories”) abound. And so it is with the national discussion of the bailouts. Ask anyone on the street about the bailouts, read almost any blog, op-ed page, letter to the editor: people do not understand why these particular corporations are so special that they should get this special access to our money after they got themselves into trouble, and no one is doing a good job of explaining to the public-at-large just what is going on. “Trust us” is not democracy.
Take a look at this short video clip of Representative Alan Grayson (D-Fla) asking the Federal Reserve Inspector General what she knows about the trillions that the Fed has put up and the IG saying she doesn’t know:
Q: “You’re the Inspector General … do you know who received that one trillion dollars plus…?”
A: “I do not know.”
And there are reports that the Congressional Oversight Panel headed by Elizabeth Warren is having trouble getting sufficient information from the Treasury Department. So as far as I can tell, no one is getting sufficient information and reporting back to us citizens what is being done in our name and with our money. And it is a lot of money. Right-wing radio and blogs are certainly taking full advantage of this information gap to stir up anger and trouble. As David Sirota wrote the other day,
According to Bloomberg News, the White House, the Congress and the Federal Reserve have committed almost $13 trillion to the financial industry in one bailout form or another. If even more resources continue to be devoted to bailing out the same financial con artists who got us into this economic mess, that means far less resources will be available to tackle all of the nation’s other challenges (health care, infrastructure, education, etc.). And when those challenges aren’t met, conservatives will have a set of failures to cite as a powerful rationale for their own political revival.
So let me ask a few of my questions:
Are the stress tests being gamed as rumored? If so, why? They used 8.9 percent unemployment as their “worst case” and, as Dean Baker wrote, “The unemployment rate hit 8.9 percent last week and it is undoubtedly going higher.”
Is the Public/Private Investment Partnership (PPIP) plan being gamed as rumored with big banks using bailout funds to trade toxic assets at inflated prices and again fraudulently boost their balance sheets (BBuBfBBs)? (The dual-alliteration test might be just as valid as a stress test that used a sure-to-be-topped unemployment number as its worst case.) But seriously, is someone looking into this and stopping it if true?
Is it true that, as rumored, individuals at AIG are offering sweet deals (backed by taxpayer dollars) in exchange for very-high-paying jobs down the line with the recipients of those deals? Again, is someone looking into this and stopping it if true?
Why was it essential that those particular corporations be bailed out to get credit flowing? Couldn’t other banks take over their lending subsidiaries or departments with government help? Instead we’re giving billions to already-too-big corporations followed by rumors that they are using the money to acquire other companies and get even bigger. Are we making too-big-to-fail corporations into too-bigger-to-fail corporations?
Why do Treasury Secretary Timothy Geithner and others in the Obama administration appear (at least from the information I get) to think their employer is the financial sector instead of the People of the United States? For example, in the restructuring of GM they are allowing jobs to be outsourced. How does this match up with the idea that in our democracy those workers are their employer?
Along the same lines, why didn’t the legislation authorizing the bailouts prohibit the companies receiving taxpayer money from lobbying? Why didn’t it limit pay and bonuses at all levels to the amount earned by the President of the United States? Why did it have so many loopholes that allow these companies to game the system with our money? In other words, why does it seem like the people writing the legislation felt they worked for the banking industry instead of the people?
People got really, really rich looting financial institutions, and then when the taxpayers came in to fix it connected insiders got really rich from that, too. … Valuable properties were sold to connected insiders for pennies on the dollar. Pretty much everyone was allowed to keep what they made from what we think of as bad practices.
So look at the results of the current crisis. A few got really rich by looting financial institutions, taxpayers on the hook to bail everyone out, and the cleanup looks like it involves connected insiders getting really rich. …
So maybe the lesson WAS learned. For example, we think Lehman was a failure? But a few people made millions, even hundreds of millions from those decisions. … And they were all allowed to keep the money.
So the lesson for US to learn is that this stuff works out really well for the people making the decisions. If we want these things to stop we need to get the money back … and put enough of them in jail. Otherwise the incentive structure guarantees this will happen over and over. It is set up that way.
Yes, these are a lot of questions.
And one last one: Do we want to “restore” our financial system, or change it? What we had didn’t work. In fact what we had demonstrated the most extreme example of “didn’t work” that any of us have experienced in our lifetimes. So why do we want to “restore” it? The words imply a wish to return to the way things were. Ryan Avent writes,
Many progressives want to use the actual process of crisis resolution to reshape the financial system, but this is like trying to install a sprinkler system while one’s home is on fire.
Ryan, this fire burned down the whole town. What I want is a complete investigation of how the fire started, who started it, why there wasn’t a sprinkler system, why the fire department wasn’t making them install a sprinkler system (and was someone paid off), and how much the fire department is spending on fighting the fire. And then I want complete accountability: who will go to jail for starting this fire and who will be fired because there was no sprinkler system. And when all that is out of the way I want new management at the fire department and a completely overhauled fire code that protects the public and never lets this happen again.
Shouldn’t we instead learn from what happened and make some fundamental changes to bring it more in line with our ideas about democracy and who is supposed to be in charge here? As I have been asking for years, who is our economy for anyway? Shouldn’t we see that too-big-to-fail is too big and limit by law the size of corporations – as well as limit the allowed percentage of ownership any person or entity can as they grow larger? Shouldn’t we realize that corporate money should stay in the corporation and not be allowed to influence our decision-making? Shouldn’t we all be asking more questions and getting answers?
If anything needs to be “restored” it is the understanding that We, the People are in charge here and have a right to all the information we want and need from our government and our elected officials. They work for us. Under our system We, the People are supposed to be telling the corporations what to do, not the other way around.
I’m wondering about the effect of contractors on the statistics. They have become a larger portion of the labor force in the recent decade. They are usually the first laid off. But contractors can’t claim unemployment. If the stats are missing this, it affects the ability to forecast and leads to faulty decisions.
Even though I am swamped with moving, I want to give a good word for Eric Boehlert’s book “Bloggers on the Bus, How the Internet Changed Politics and the Press.”
The title is a reference to 1972’s “The Boys on the Bus” by Timothy Crouse, about the press and the 1972 campaign (and just males, I guess).
I’m reading the book and I can’t put it down except when my wife yells at me to get back to moving things. It is so well written that it is like reading a novel. I’ll try to write more later if I live through this move.