Thursday, August 6, 2020
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Why Didn’t They Think of That?

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Cross-posted at Blue Commonwealth.

It has been nearly three years since the collapse of Lehman Brothers, and the related malfeasance of Lehman and other Wall Street firms.   Hank Paulson has admitted Lehman's balance sheet was bogus.  According to Robert Reich, Goldman Sacks helped Greece hide its public debt and then bet against it with credit default swaps, those risky derivatives, in the news so much in 2007-2009, to avoid risking its own capital.  If you think the scenario is familiar, think AIG.  By any stretch of the imagination, these overpaid and overfed hacks and flacks should have been left to suffer the consequences, stripped of their wealth and in prison.  Why hasn't this happened?  We have waited and waited for economic reform we can believe in, which Wall Streeters are fighting tooth and nail.  We've been told that we can't have the meaningful reform we crave, that we must accept "bipartisan" compromise.  The GOP slings its empty "free market" bull (bull, because they never actually mean a free market, but rather a rigged market, in practice). Then they blame an administration inheriting the effects of their party's utter lack of fiscal stewardship.  Now they fight reform to fix it and assure proposed re-regulation is toothless.  And of course, it's everyone's fault but their own.  The faux-helpless foxes at the SEC guarded the hen house then.  Even our own side has acted fairly helpless in the face of so many misdeeds. Should the administration not use the tools and methods available to it, it will deserve later scrutiny and judgment.  I reserve judgment for the time being. However, as Reich observes, it turns out that we do not need "reform" to do something about it.

Democrats Turn Economy Around; Best Jobs News Since 2007

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As the Washington Post reports, the U.S. economy added 162,000 "non-farm" jobs last month, representing "the biggest one-month jobs gain in the past three years."  And in other good economic news, "[t]he Institute for Supply Management reported that manufacturing activity was up for the eighth consecutive month, with a rate of growth faster than any since July 2004." But wait, there's more:
...Factory orders, particularly in durable goods, are so positive at a 0.6% month-to-month rise that they are beginning to merit the description of  "robust." And retail sales at chain stores were also up 0.6% for the week, which means they are on target to top 3% or more for the whole month compared with last year's dismal record.

Motor vehicle sales were up as well, to a seasonally adjusted annual rate of 11.8 million, a vast improvement over February...

And let's not forget the stock market, which just had "its strongest first quarter since 1999." Great news, and we have Democrats - who passed a huge economic recovery package, as well as several other jobs measures, with essentially no Republican support - largely to thank for this (the graph above tells a powerful story). So, where's Eric Cantor and his Party of no this morning to talk down America's economy and to tell us that the economic recovery package passed a year ago "isn't working?"  No comment on the above graph, which shows the economy cratering under a Republican administration and coming back strong with Democrats in charge? Apparently, the cat's got the Republicans' (forked) tongues so far today, but give 'em time, I'm sure they'll think of something bad to say soon enough.

UPDATE: Analysts weigh in.

Commonwealth Institute: McDonnell Budget Costs Us 37,000 Jobs, Over $2 Billion...

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The "independent, nonpartisan, nonprofit" Commonwealth Institute just released a new study analyzing the impact of Bob McDonnell's budget on Virginia's economy. It's not pretty.

An estimated 37,000 job losses and reduced economic activity of over $2 billion will likely result from cuts to state spending in health care and education under the budget approved recently by the General Assembly according to a new, comprehensive study released today by the Commonwealth Institute for Fiscal Analysis.

In addition, the analysis estimates that the cuts will result in over $2.2 billion in lost gross domestic product over the biennium and over $1.5 billion in lost personal income.

"We are not just talking about a few jobs here," says Michael Cassidy, Institute Executive Director. "We're talking about causing the layoffs of more people than are currently employed with Northrop Grumman's Newport News Shipbuilding. That's never okay."

Using nationally recognized REMI economic modeling, The Commonwealth Institute estimates that 37,000 jobs would be eliminated under the General Assembly's compromise budget, which now awaits the Governor's signature.

As always, heckuva job by the Republicans.