Yep, reply box is freaking out a lot. 

First off, I have an only ok job (salary wise) in the nonprofit sector.  Our wages have been frozen for the past three years because of the hit the economy has done on fundraising.  If the trends continue, I might be unemployed in the next year.  And I deal all day with programs and initiatives that aimed at helping those in poverty get out of it and those just above the poverty stay from sliding into it.  At the same time I see the people in this community tromp faithfully every election to send the banker-loving Republicans to go represent them. And I don't see anything that would indicate this is going to change on the local, state, and federal level around here.   The conventional wisdom right now is Pence is going to go for the Governor's spot and the only possible Dem who stands a chance is Bayh, and even that is a long shot.And where I live is pretty dang close to being Perioa. 

The American nation can stop it.  First we need to real liberals to step forward and run in the primaries (given the need for a squeaky clean past to run for office, I can't do it personally).  And then the people need to go out and vote for them in the primaries and then in general election.  Until that happens, yes it is the new normal.  It sucks. I don't like it.  But being all angry about it and gnashing my teeth isn't going to change it.  At the very least the liberal candidates need to get close enough to winning in order to scare the establishment Dems (and Republicans) to start tilting toward the left. 

I’ve been fretting over some of the blasé remarks at this site over the issue, and creating the faux-arguments like ‘what can Obama do to get the economy back to (whenever), and ‘baby steps are good with me’ and the acceptance of the Republican/supply side arguments for Scary Deficits and Debt needing fixed NOW.  My faves, though are the identical answers for many of the proposed progressive solutions: “If you do X to create jobs, prosecute banking fraud, create a financial transaction tax for each trade, etc., you risk a possible cascade effect that will throw us into a true depression!!!”

I was asking earlier about the Fed and monetary policy, and I did poke around this morning reading.  There are some folks who believe that Bernanke is spending too much effort at controlling inflation since it’s best for bondholders, and that for the rest of us, some inflation would be a good thing.  I have no idea, but it doesn’t surprise me to hear that Central Banks all over the planet say the same thing. 

Krugman has been a bit apologetic lately that he hasn’t been more forceful about economics, and spent too much time on the politics of economics, which is arguably what the White House cares most about.

I’m not a big Krugman fan, but these paragraphs stood out and nailed some of what seems to be happening now.

“Yet a strange thing has happened to policy discussion: on both sides of the Atlantic, a consensus has emerged among movers and shakers that nothing can or should be done about jobs. Instead of a determination to do something about the ongoing suffering and economic waste, one sees a proliferation of excuses for inaction, garbed in the language of wisdom and responsibility.

So someone needs to say the obvious: inventing reasons not to put the unemployed back to work is neither wise nor responsible. It is, instead, a grotesque abdication of responsibility.

What kinds of excuses am I talking about? Well, consider last week’s release of the latest report on the economic outlook by the Organization for Economic Cooperation and Development, or O.E.C.D. The O.E.C.D. is basically an intergovernmental think tank; while it has no direct ability to set policy, what it says reflects the conventional wisdom of Europe’s policy elite.

So what did the O.E.C.D. have to say about high unemployment in its member countries? “The room for macroeconomic policies to address these complex challenges is largely exhausted,” declared the organization’s secretary general, who called on countries instead to “go structural” — that is, to focus on long-run reforms that would have little impact on the current employment situation.”

He’s pretty freaked no one is talking about jobs!  He names some solutions, admits they are very unlikely.  But why is no one jumping up and down except Bernie Sanders, making a case for the dire need for government to get a jobs program going for infrastructure and other big national needs (that aren’t more paving highways).  Instead it’s shrugs, and penny-ante tinkering with employee tax holidays.  Huh?

Krugman calls it ‘Learned Helplessness’; some call it ‘Stockholm Syndrome by Oligarchy’.  Shock Doctrine.  And this from Paul in ‘Rule by Rentiers’:

“Ask for a coherent theory behind the abandonment of the unemployed and you won’t get an answer. Instead, members of the Pain Caucus seem to be making it up as they go along, inventing ever-changing rationales for their never-changing policy prescriptions.

While the ostensible reasons for inflicting pain keep changing, however, the policy prescriptions of the Pain Caucus all have one thing in common: They protect the interests of creditors, no matter the cost. Deficit spending could put the unemployed to work — but it might hurt the interests of existing bondholders. More aggressive action by the Fed could help boost us out of this slump — in fact, even Republican economists have argued that a bit of inflation might be exactly what the doctor ordered — but deflation, not inflation, serves the interests of creditors. And, of course, there’s fierce opposition to anything smacking of debt relief.”  [snip]

But the reality is just the opposite: creditor-friendly policies are crippling the economy. This is a negative-sum game, in which the attempt to protect the rentiers from any losses is inflicting much larger losses on everyone else. And the only way to get a real recovery is to stop playing that game.

We.Are.So.Screwed.

I'm not saying 'economic impacts be damned'. I'm saying there is a negative economic impact to maximizing financial sector profits at the cost of homeowners and investors and despite the law.

The mortgage market is broken because no one will buy houses where the property rights are doubtful by borrowing money from banks who will abuse the law through unwarranted rate hikes, fines, and random foreclosures. Investors won't buy securitized mortgages because of the same worries concerning collateral, unethical trustees and servicers.

The idea that the banks as they stand are good for the economy has no merit. They gouge consumers and small businesses on transaction fees and loans. They gouge new businesses on capital raising. Their addiction to highly volatile capital and commodity markets throw price-signals out of whack. Their immense political clout - reinforced by their illegal profits - prevents these things from being corrected.

And if they are as corrupt as the evidence from the mortgage market suggests, and abiding by the law does force the government to nationalize them and break them up, that won't hurt lending. Outstanding loans and credit lines won't be cut. And it's not like they are making new loans even now with their massive profits. Last I checked their balance sheets were shrinking.

This may be the eleventh time I've put this up here, but A. @ washingtonsblog keeps a list of (the best) economists plus a few extra maybe, who assert that the economy will never recover, nor will trust be restored until the mortgage fraud is prosecuted.

And imagine wanting to buy a house now, and finding that its deed isn't likely registered at your local county clerk and recorder's office.  (MERS).   Hmmm.

In the meantime at least we got to watch Shakira....    ;o) 

p.s. I want my money back.