Pundit Country

This clip, from the PBS investigative news program Frontline, covers their report on the credit card industry since before and immediately after the crash.It’s an eye-opening look at what is essentially and industry that has bribed it’s way into making usury both a legal and desirable business practice.

I have to admit I was stunned at the some of the practices the industry is allowed to continue with, even after the most recent attempt at Congressional reform. It makes me glad that I bank with a credit union and discarded my credit cards years ago. In fact, it’s doubtful I’ll ever go bank to a bank after watching this.

The entire program runs about an hour in length, but is well worth your time. My immedaite takeaway from the piece was this:

1) Elizabeth Warren should be hired immediately to serve a larger role than adviser to Congress on financial matters. She really is that smart and capable of explaining this mess in layman’s terms.

2) Tim Geithner needs to be let go (despite my earlier assertion) if for no other reason than he simply doesn’t command the respect or fear that he needs to from the banking industry to get them to comply with his demands. That or he’s just incompetent.

3) President Obama needs to stop craving the approval of the system he needs to radically reform and just do it. People will wait (even for him) for only so long.

4) The idea of a federal Consumer Protection Agency is one of the better ones this crisis has precipitated and should be pushed for the greatest determination.

Related articles

• Advocating For A Consumer Financial Protection Association (themoderatevoice.com)
• Elizabeth Warren: Financial Rules ‘Literally Don’t Work Anymore,’ Regulations Should Be ‘Clear And Painful’ (huffingtonpost.com)
• Joel B. Schwartzberg: Elizabeth Warren: Hard Truths About the Economy (huffingtonpost.com)
• Audio: Hidden Fees on Credit Cards (usnews.com)
• The beginning of the end of meaningful regulatory reform (blogs.reuters.com)

What with all of the news regarding the officer shooting in Lakewood, WA today, I completely forgot that today is the 10th anniversary of the start of N30, or what it’s become known as: the Battle in Seattle.

It’s kinda odd looking back then and seeing where we are now. We were largely ignored by the WTO then and they seem to have repeated that strategy with every subsequent protest since as more and more of the world’s wealth goes to fewer and fewer hands.

Anyway, some of the readers I’ve seen have been posting a “where I was” perspective of the events of that day and I thought I’d add mine. I knew exactly where I was on the 30th. Right behind this photographer, much to the consternation of my girlfriend at the time.

It’s always a bit of a bummer to report that things aren’t getting better, but it’s worse when you keep saying it like a broken record and no one is paying attention. This has been the life of some of the smartest economists over the last several years. And for those who, like me, hoped the change in political administrations would see a change in that trend are finding ourselves disappointed that these bright minds are continuing to be ignored.

Such the life of men like Nouriel Roubini, a well-connected, yet overlooked mind when it comes to making decisions on the fate of the U.S. economy. Roubini latest piece, published in the New York Daily News, is a sobering look at the future of the economy if the unemployment rates continue to rise (and there is little reason or evidence to persuade one to think otherwise). His take?

So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.

…

The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.

Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.

Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.

This is in no way good news, particularly during the holiday season, but my own thoughts are that I’d rather have a better picture of the future and plan for it, than stumble around in the dark, hoping for brighter days.

Related articles

• Secondary Sources: Sold-out Hamsters, Roubini Sees 11% Unemployment for Two Years (blogs.wsj.com)
• Roubini: The Job Loss is Permanent (mydd.com)
• Roubini: “The Worst Is Yet To Come” (econotwist.wordpress.com)
• U.S. job losses wake-up call for optimists (financialpost.com)
• Companies doing more with fewer workers (msnbc.msn.com)

Robert Reich is one of the clearer voices (along with Krugman and at times, Stiglitz) in the field of experts who have been trying the last several months to explain why the much-touted recovery is not stemming the job losses that many states are experiencing. Simply put, the attention has been to the major players in the economy and not to smaller business.

The problem is, our newly expanded government isn’t doing much for average working Americans who continue to lose their jobs and whose belts continue to tighten, and who are getting almost nothing out of the rising Dow because they own few if any shares of stock. Despite the happy Dow and notwithstanding the upbeat corporate earnings, most corporations are still shedding workers and slashing payrolls. And the big banks still aren’t lending to Main Street.

Trickle-down economics didn’t work when the supply-siders were in charge. And it’s not working now, at a time when — despite all their cries of “socialism” — big business and Wall Street are more politically potent than ever.

The whole piece is here.

Related articles

• “Socialism” saved Wall Street (americablog.com)
• Economist Stiglitz sees need for global reserve currency system (dailyfinance.com)
• Why the Dow is Hitting 10,000 Even When Consumers Can’t Buy And Business Cries “Socialism” (tpmcafe.talkingpointsmemo.com)
• Paul Krugman: We Are In Economic “Purgatory” (VIDEO) (huffingtonpost.com)

I fear an increase of this magnitude would effectively end affordable higher we access to the very people who need the most and further populate an undereducated workforce which will drive high tech and finance employers out of areas like Tacoma.

Politics | Tuition, fees, books could jump to $10,000 | Seattle Times Newspaper.