Monday, October 31, 2011

Sound familiar? Banks get bailed out. Unemployed get shafted.

Foreclosure aid falls short
Plans bogged down by red tape, banks’ rules
By Jerry Kronenberg
Monday, October 31, 2011
President Obama's original HARP plan was supposed to help some 5 million Americans, but didn’t.
Similarly, President George W. Bush’s 2008 “Hope for Homeowners” plan fell way short of its 400,000 mortgage refinancing goal.
Obama vowed in 2009 that his original HARP plan would help up to 5 million homeowners refinance into lower-cost mortgages. But only 894,000 have gotten new loans so far.
The plan was also supposed to let 3 million to 4 million “at-risk” homeowners cut monthly mortgage payments. However, just 817,000 have gotten permanent modifications to date.
This year’s Emergency Homeowners Loan Program was designed to give some 30,000 people who lost jobs interest-free, forgivable loans to help make mortgage payments. But the application period opened late and the program had lots of onerous rules, so only 11,800 people qualified.
That includes just 568 Massachusetts homeowners, even though Uncle Sam gave the state enough funds for some 1,260 loans.

Wednesday, October 26, 2011

The CBO makes it official:

Top Earners Doubled Share of Nation’s Income, Study Finds
NY Times: October 25, 2011

WASHINGTON — The top 1 percent of earners more than doubled their share of the nation’s income over the last three decades, the Congressional Budget Office said Tuesday, in a new report likely to figure prominently in the escalating political fight over how to revive the economy, create jobs and lower the federal debt.

The report, requested several years ago, was issued as lawmakers tussle over how to reduce unemployment, a joint committee of Congress weighs changes in the tax code and protesters around the country rail against disparities in income between rich and poor.

In its report, the budget office found that from 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of the population with the highest income. By contrast, the budget office said, for the poorest fifth of the population, average real after-tax household income rose 18 percent. And for the three-fifths of people in the middle of the income scale, the growth in such household income was just under 40 percent.

The findings, based on a rigorous analysis of data from the Internal Revenue Service and the Census Bureau, are generally consistent with studies by some private researchers and academic economists. But because they carry the imprimatur of the nonpartisan budget office, they are likely to have a major impact on the debate in Congress over the fairness of federal tax and spending policies.

The report found that higher-income households got a larger share of the pie, while other households got smaller shares. Specifically the report made these points:

¶ The share of after-tax household income for the top 1 percent of the population more than doubled, climbing to 17 percent in 2007 from nearly 8 percent in 1979.
¶ The most affluent fifth of the population received 53 percent of after-tax household income in 2007, up from 43 percent in 1979. In other words, the after-tax income of the most affluent fifth exceeded the income of the other four-fifths of the population.
¶ People in the lowest fifth of the population received about 5 percent of after-tax household income in 2007, down from 7 percent in 1979.
¶ People in the middle three-fifths of the population saw their shares of after-tax income decline by 2 to 3 percentage points from 1979 to 2007.

Wednesday, October 19, 2011

President Obama's economic mentor, Ronald Reagan!

A $45 billion taxpayer bailout rescued BOA from bankruptcy in 2008-09. Now BOA is returning the favor:

"Bank of America reported a $6.23 billion profit for the third quarter"
---Nelson D. Schwartz, NY Times October 18, 2011

"Bank of America announced it would lay off 30,000 employees, as part of a wide-ranging plan to save $5 billion in annual costs by the end of 2013."
---Susanne Craig, NY Times October 18, 2011

Tuesday, October 18, 2011

While unemployment tops 9%....

Citigroup earnings rise 74 percent, to $3.8 billion

PALLAVI GOGOI, Associated Press
October 17, 2011

NEW YORK (AP) — Citigroup Inc.'s earnings rose 74 percent in the third quarter. The profit report came as the Occupy Wall Street movement entered its second month and spread across the country, targeting large financial institutions like Citi.

Monday's results reflected Citigroup's seventh straight quarter of income growth. Citigroup was one of the biggest recipients of taxpayer support during the financial crisis. It received $45 billion in bailouts funds and was partly owned by the government until December 2010.

Bank Of America Sees $6.2 Billion Profit

Jillian Berman, The Huffington Post 
October 18, 2011

Bank of America earned billions of dollars in profits last quarter, even as banking officials expressed concern recently about the effects of new regulations on their bottom line.
The bank reported third quarter gains of $6.2 billion, compared to a $7.3 billion loss during the same quarter last year. The increase in profits comes after Bank of America roiled customers by announcing that it will start charging customers $5 per month to use their debit cards for purchases in 2012. Shortly after the bank announced the fee, Bank of America CEO Brian Moynihan defended it, saying that the bank "has a right to make a profit."
Moynihan and other banking officials have said that they need to start charging fees on debit cards and checking accounts for once-free services to recoup the revenue they expect to lose as a result of financial reform regulations -- including a cap on the debit card swipe fee banks charge merchants -- passed as part of the Dodd-Frank act.
Bank of America isn't the only bank adding new fees. Wells Fargo announced in August that it would test a $3 debit card fee this fall, while Citibank said earlier this month that it would start charging certain customers a $20 fee for low account balances.

Saturday, October 15, 2011

Tax cuts for the rich are killing us.

Tax Cuts For Wealthy Americans Cost Treasury $11.6 Million Every Hour

Tax cuts for the wealthiest five percent of Americans cost the U.S. Treasury $11.6 million every hour, according to the National Priorities Project. America’s top earners will get an average tax cut of $66,384 in 2011, while the bottom 20 percent will get an average cut of $107.

The report comes as party leaders wrangle over the best way to curb the nation’s budget deficit, protesters around the world demonstrate against income inequality and corporate greed and Republican presidential candidates offer their economic plans to voters.
There are some Republicans who support increasing taxes on the wealthy. Former Federal Reserve Chairman Alan Greenspan -- a registered Republican -- told CNBC earlier this month that he supports allowing the George W. Bush-Era tax cuts for the wealthy to expire.
That could be because the tax cuts are weighing on the national debt. The non-partisan Center for Budget and Priorities found that the Bush tax cuts costs about the same as the shortfall from Social Security in the ten years after they were signed into law. If the U.S. reverted to Clinton-era marginal tax rates, the U.S. Treasury would net an additional $72 billion annually, according to Citizens for Tax Justice.
In addition, increasing taxes on the wealthy could also help to narrow the widening wealth gap. The net worth of the bottom 60 percent of U.S. households -- about 100 million households -- is lower than that of Forbes 400 richest Americans. Tax cuts for the wealthy provided Americans making more than $1 million with a $128,832 benefit, while Americans earning from $40,000 to $50,000 got an $860 benefit on average.

Thursday, October 13, 2011

Occupy Wall Street? Here's Why:

According to the conservative American Enterprise Institute, overall taxes in the United States are between 10 percent and 20 percent lower than they are in most other industrial nations.

The top income tax rate in the US (35%) is now the lowest it has been in twenty years.

The capital gains tax rate in the US (15%) is now the lowest it has been in over thirty years.

The wealthiest Americans earn most of their income from capital gains, so they pay a much lower tax rate than the middle class.

After-tax income for the middle class has actually declined over the last decade---while at the same time skyrocketing for the very rich.

This trend (the rich paying lower tax rates on higher income) has been going on pretty much uninterrupted since 1980.

In fact, they got rebates.

The wealthiest among us insist that they are entitled to pay a lower tax rate than struggling middle class families. The rich claim that most of the wealth created in America is supposed to flow to them. They believe that middle class family income has declined because middle class families don't work hard enough. Because they are lazy. Because they are socialists.

Profits are at record highs. Taxes are at record lows. Yet huge corporations have laid off millions of Americans while contributing zero dollars to help reduce the alarming national deficit. These same companies are sitting on trillions of dollars of uninvested capital, and still complaining that they are "over taxed" and "over regulated."

Is it any wonder why Wall Street is under siege?

Monday, October 10, 2011

Wall Street vs Main Street:

Panic of the Plutocrats
October 9, 2011
It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.

Eric Cantor, the House majority leader, has denounced “mobs” and “the pitting of Americans against Americans.” The G.O.P. presidential candidates have weighed in, with Mitt Romney accusing the protesters of waging “class warfare,” while Herman Cain calls them “anti-American.” 

The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.

What’s going on here? The answer is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.

Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.

This special treatment can’t bear close scrutiny — and therefore, as they see it, there must be no close scrutiny. Anyone who points out the obvious, no matter how calmly and moderately, must be demonized and driven from the stage. In fact, the more reasonable and moderate a critic sounds, the more urgently he or she must be demonized, hence the frantic sliming of Elizabeth Warren.

So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.

Wednesday, October 5, 2011


Wall Street protests grow after unions' endorsement
By Jason Kessler and Michael Martinez
October 5, 2011

New York (CNN) -- Wall Street protests swelled Wednesday to their largest numbers yet, after local unions pledged support to a third week of demonstrations against income inequality, corporate greed, corruption and a list of other social ills.

While the fledgling movement has struggled in its definition, demonstrators appear steadfast in their general criticism of the country's wealthiest 1% and its purported influence. Some carried placards and shouted slogans denouncing corporate excess, while others said they were "fed up" with high unemployment and a lack of economic opportunity. Still others said they had simply been waiting for a moment to express their voice and kick-start a conversation about inequality.

The group seemed to gain momentum after a September 24 pepper spray incident involving protestors and New York police officers.

Meanwhile, social media sites such as Twitter seem to be spurring similar protests in other cities, though in vastly smaller numbers. Dozens gathered in Boston; Hartford, Connecticut; and Seattle, while demonstrations were also scheduled later Wednesday in Savannah, Georgia, among other cities. Demonstrations were also expected to take place in Washington, D.C., and Tampa, Florida, on Thursday.

Occupy Wall Street is a leaderless movement made up largely of twenty-somethings upset about the economy, the Afghanistan war, the environment, and the state of America and the world in general. In less than three weeks, the movement has become a magnet for countless disaffected Americans at a time when an overwhelming majority of U.S. adults say the country is on the wrong track.