Income Inequality

Digby has a post here with a couple of good TED videos (especially the first one) on income inequality.

Worrisome

 

Monica Almeida, New York Times

This past Sunday, the New York Times had a worrisome, if not scary, article on chronic joblessness in America. So many jobs have been lost over the last year and a half. It may take a very long time to recover those jobs, if they're recovered. I think people in some way will eventually get back to work, but the form and the pay may be very different from previous jobs (less on the pay). This article makes one motivated to work more just to hold onto what one's got.

The Warning

Frontline had a very good program on a couple of weeks ago. Thankfully, one can still watch it online which I just did. The program is about the unregulated market in derivatives and how a woman named Brooksley Born (above) back in the 90's tried to warn the government that there needed to be regulation of this dark market. Unfortunately, the economic powers that were, Alan Greenspan, Robert Rubin, Larry Summers, held sway, and nothing was done, despite events at the time! And today, we've seen how derivatives brought Wall Street to its knees and how the government has had to step in and bailout a number of firms. Hopefully, there will finally be some regulation enacted, but it is slow going, particularly with Obambi in the White House.

Wall Street and the Third World: vanityfair.com

A good article by Joseph Stiglitz about the damage that has been done by the current economic crisis to the idea of market forces. America has prescribed tough medicine (spending cutbacks, no bailouts) for other parts of the world when they have faced economic crises, but then it does the opposite when facing its own crisis. The ideas of the West in regards to global economics have been under suspicion in the developing world, because the ideas seem to benefit primarily the West and not all the world.

Wall Street and the Third World: vanityfair.com

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Too Much Wall Street

josephstiglitz.com

Nobel prize-winning economist Joseph Stiglitz has a good op-ed in the New York Times today. It's a criticism of the Obama administration's latest bailout plan for banks for buying up their toxic assets. As Paul Krugman has already publicly proclaimed, Stiglitz is critical of the plan for being heavily favored towards banks and investors with great risk towards taxpayers.

In the plan, taxpayers take about 92% of the risk in the form of matching funds and guaranteed loans to investors. If buying some toxic assets somehow pays off, then investors and taxpayers get some profit, but if the purchases don't pay off, taxpayers are stuck with the vast amount of the losses. Privatized gains, socialized losses.

This is another example of Wall Street having too much of an influence in Washington. Goldman Sachs CEOs were the previous two Treasury secretaries, and Larry Summers and current Treasury Secretary Timothy Geithner are heavily influenced by Wall Street.

There is an article in the May issue of Atlantic Monthly that is getting some publicity. From what I hear and need to read myself, it discusses the US taking on some aspects of a banana republic, one of those aspects being "financial oligarchs" having too much influence in the country.

Anyway, I'm not too pleased with the Obama administration's economic plans. Obama is too afraid of temporarily nationalizing banks which may be the more effective way to go. Let's see some real leadership and less talk from the man.