You Can Take That To The Bank.

That used to be a statement of certainty. Americans once considered the bank a place of safety for their money; an island of certainty in an uncertain world. No longer. With the repeal of Glass-Steagall in 1999, banks have become little more than high-end casinos – only casinos have some semblance of integrity.

When banks lost their high-stakes bets in 2008, they collapsed our economy. And, in an act of unparalleled hubris, they turned to taxpayers to help them avoid bankruptcy. Instead of paying a significant price for their wantonness, the “too-big-to-fail” banks continued with business as usual, even continuing to pay their executives six and seven-figure bonuses. Meanwhile, other Americans slogged through the greatest recession in history, losing as much as $7 trillion through a combination of home foreclosures, lost salaries, lost interest and lost pensions.

And who made off with most of that money? Why Wall Street, of course.

Given their recent history, one would expect that at least some of the bankers who caused the problems would have been convicted of crimes. They weren’t. Instead, they have continued to profit. Worse, they have continued to game the system. They continue to oppose the Dodd-Frank Wall Street Reform and Consumer Protection Act. They continue to oppose the Consumer Protection Agency. And they continue to gamble with your money.

In fact, since the banking collapse of 2008, bankers seem to have upped their game; engaging in numerous financial scams and committing outright crimes. To wit: UBS paid $2.3 billion in fines when it was discovered that one of its traders hid €5 billion in losses. Wells Fargo paid $175 million to settle accusations that it discriminated against African-Americans and Hispanic borrowers. JPMorgan Chase gambled $2 billion and lost nearly $6 billion. Barclays paid $450 million to settle charges that it manipulated LIBOR, the global interest rate, and UBS paid $1.5 billion to settle similar charges. USBC paid $1.9 billion to settle a money laundering probe. And Barclays was recently fined £284,432,000 for its role in rigging the foreign exchange market.

Though the banks have admitted to felonies and paid billions in fines, they have yet to pay any real penalty. As far as I can tell, only two bankers have gone to jail. And the rest are unrepentant. Indeed, a recent poll of Wall Street traders found that a significant percentage would be willing to commit a crime if it resulted in a payback of $10 million. (Keep in mind that, on Wall Street, $10 million is chump change.)

But instead of cracking down on the banksters, a GOP-controlled Congress seems determined to deregulate Wall Street. (They know who butters their bread or, more precisely, makes the majority of their campaign contributions.) So you don’t have to be a financial expert to know that there will be many more scandals to come.

You can take that to the bank…er…mattress…or whatever.

Remembering The Greatest Economic Crash In History.

Looking back at the market crash of 2008, it’s difficult to believe that it represented a greater loss of stock and home equity than any previous crash in American history. Though we may be impatient for a full recovery of jobs and middle class incomes, we should take a few moments to recognize that the quick action by Congress and the Federal Reserve did, in fact, work. The same can be said for President Obama’s automotive bailouts and economic stimulus which were opposed and derided by Teapublicans.

So you have not yet been able to find the job you want? Or you feel that you are being undervalued and underpaid? Your frustration is understandable. But, when compared to the aftermath of lesser crashes, it could have been a whole lot worse. We were not relegated to soup lines and work camps as our parents and grandparents were following the stock market crash of 1929. But had President Obama not ignored the Teapublicans’ call for austerity measures, we well might have been.

To fully appreciate what I mean, you need to look at the extent of the losses in 2008.

The Dow Jones Industrials lost 778 points in one day – the greatest single day loss in history. It’s estimated that the market crash resulted in a $1.2 trillion loss of market equity. Looking at it another way, the Dow lost 33.8 percent for the full year – surpassed only by the bear markets of 1907 and 1931. Further, GDP contracted for more than a year. Unemployment rose from 5 percent to 10 percent before it began to drop. According to, $3.3 trillion in home equity was stripped from homeowners in 2008 as home values fell by 30 percent. Income levels fell, causing the net worth of households and non-profit organizations to fall by roughly $15 trillion. And the impact of the crash on retirement funds is virtually immeasurable. Indeed, those who were nearing retirement may never fully recover the money lost in their IRAs, 401ks and their defined benefit pension funds.

Despite all of that, our economy recovered remarkably quickly. If you don’t believe me, just look at the economies of many other advanced nations that are struggling with stagnation who mistakenly followed the advice of conservatives. By contrast, the GDP of the US is growing, our deficits have fallen at a dramatic rate and our national debt is now less than 3 percent of our GDP – and it would be much lower if Teapublicans hadn’t fought to give more tax breaks to corporations and the one percent. Certainly, income inequality is skyrocketing, but it was expanding long before the crash as a result of the Bush tax cuts. Yet rather than do something to address the issue, the GOP-led Congress has, instead, voted to eliminate estate taxes for the wealthiest 5,000 families in America!

Remember that the next time you hear someone claim that the GOP is the party of fiscal responsibility. It was GOP policies that led to the Great Recession. And, once again, it was Democratic leadership that led us out of it.

Who’s Really Responsible For Our National Debt?

It’s popular for the Republican Party to blame our $16.7 trillion debt on President Obama. Certainly, like all presidents, he has some responsibility for it. But a much larger share of the responsibility goes to President Reagan, President George H.W. Bush and, most especially, President George W. Bush.

You see, the increase in spending in 2009 following the economic collapse of 2008 should rightfully be attributed to the Bush administration. That’s because the 2009 deficit was the result of a spending bill, including the Troubled Asset Relief Program (TARP), authorized by Congress in October of 2008 and signed by President Bush months before Obama took office. In fact, spending in the first year of any administration is always the result of the previous administration. Properly credit 2009 spending to Republicans, and you’ll discover that President Obama has been responsible for the lowest spending increases since Eisenhower. Similarly, he is responsible for the most rapid cuts to our deficit in more than 50 years!

While it’s true that the debt has increased 18.5 percent since Obama became president, as discussed, he should not be held responsible for most of that increase. Even so, it’s still less than the 20.7 percent increase in national debt that accrued during George W. Bush’s second term. And it’s only marginally greater than the 13 percent increase during Bush Sr’s term, and the 11.3 percent increase during Reagan’s first term.

A better measure of Obama’s spending comes courtesy of Rick Ungar, a contributor to Forbes Magazine (hardly a bastion of liberalism). According to Ungar, in President Obama’s first term, overall government spending grew just 1.4 percent as compared to 7.3 percent in George W. Bush’s first term and 8.1 percent in Bush’s second term!

So why do Republicans continue to place the blame on Obama? First, it’s a matter of political convenience to portray Obama as a “tax and spend” liberal. Second, the narrative is relatively believable since government spending skyrocketed during the first year of the Obama administration. Third, the media has done a very poor job of countering Republican misinformation.

In order to truly understand the federal debt, you have to look at the history of US borrowing.

Following the Revolutionary War, the US debt stood at roughly 35 percent of Gross Domestic Product (GDP). It again reached that level following the Civil War. In both instances, the debt was brought down by a combination of increased revenues and spending restraint. During WW I, the US debt again rose to approximately 35 percent of GDP. Before it could be paid down, our economy collapsed leading to the Great Depression. That was quickly followed by WWII. The two events caused the debt to soar to more than 117 percent of GDP. But, through a combination of post-war prosperity and income tax rates of up to 91 percent during the Eisenhower administration, the debt was again brought under control.

By the end of the Carter administration, the national debt had been reduced to 32.5 percent of GDP.

President Reagan’s expansive military spending during the Cold War once again caused the debt to soar, reaching more than 66.1 percent GDP. Under Clinton, it was reduced to 56.4 percent of GDP. Then, under George W. Bush, two wars (one of which was a war of choice) and lax government oversight led to the Great Recession – the worst economic calamity in nearly 80 years. At the same time, a Republican-led Congress cut taxes (and, therefore, revenue), particularly for the wealthy.

President Obama inherited a debt of more than 84 percent of GDP, along with a worldwide economic collapse, double-digit unemployment, spiraling health care costs, two wars estimated to have cost more than $6 trillion, a Congress that refused to rescind the Bush tax cuts, and a uniquely obstructionist Republican Party.

All of this was roughly the equivalent of combining the costs of World War II and the Great Depression without the primary mechanism needed to reduce the debt – taxes!

President Obama was left with few choices. He had to stimulate the economy through loans and tax cuts in order to put people back to work. This led to reduced revenue. He had to wind down the war of choice in Iraq as quickly as possible. He needed to stabilize the war in Afghanistan that had been allowed to languish under Bush at a cost of $1 million per soldier per year. Moreover, since few Americans had been asked to sacrifice for the wars in Iraq and Afghanistan, unlike World War II, they felt no need to pay for the wars through increased taxes. Indeed, even though federal income taxes were at a 50-year low, extremists funded by billionaires created the TEA (Taxed Enough Already) Party.

All of this led to the growth of our debt, which now equals nearly 102 percent of GDP.

Certainly, this debt is of great concern. But it’s not the short-term crisis Teapublicans would have you believe. (It’s the equivalent of a family earning $100,000/year holding a $102,000 mortgage.) And, without modest tax increases, there are few ways to reduce the debt.

One is to grow the economy, and according to most economists, including Lloyd Blankfein of Goldman Sachs, the economy is on the verge of significant, sustained growth if the nitwits in Congress would just get out of the way and stop dragging us from one self-inflicted crisis to another.

Two is to make cuts without adding to unemployment. (For example, we squander tens of billions each year on weapons systems that our military doesn’t even want, but Congress refuses to defund them because doing so would cost jobs.) And, once the economy shows sustained growth, programs such as food stamps can be cut – especially if we raise the minimum wage to reduce the large number of working poor who have little choice but to rely on government assistance.

In summary, contrary to what Teapublicans would have you believe, our national debt is not Obama’s debt. It’s the result of decades of wars, tax cuts, regulatory indifference, a struggling worldwide economy, out-of-control health care costs, greedy corporations that off-shore both jobs and profits, and a dysfunctional Congress that not only fails to help the economy. It makes decisions that are actually preventing economic recovery!

As a matter of fact, the Tea Party seems determined to force our nation into default. And, like the debt, they would have you believe that it’s all Obama’s fault.

Arizona’s Right Wing “Job Creators.”

When Gov. Janet Napolitano was replaced by the finger-wagging Jan Brewer following Napolitano’s appointment to become Director of Homeland Security in 2009, the last check on Arizona’s right wing-dominated legislature was eliminated. That led to such bills as the anti-immigrant SB 1070; bills that made it legal to carry guns in bars; bills that protected guns, not people; bills that cut tens of millions from public schools while cutting taxes for corporations.

All the while, the right wing legislators claimed that their top priority was job creation.

Therefore, it seems fair to judge their efforts by looking at the jobs created in Arizona compared to the rest of the nation. Since the end of the Great Recession, the US has regained 77 percent of the jobs lost according to the Bureau of Labor Statistics (BLS). Over the same period, Arizona has recovered just 46 percent of the jobs lost. Despite being one of the states hardest hit by the recession, Arizona ranks just 44th in job creation since February 2010.

The statistics show that Arizona has recovered just 66 percent of jobs lost by the information industry, 40 percent of those lost in professional and business services, 34 percent in other services, 32 percent in trade, transportation and utilities, 29 percent in government, and just 27 percent in manufacturing.

How can that be?

According to Teapublican legislators, the best way to create jobs is to cut taxes. Yet Arizona’s corporate taxes are among the very lowest in the nation. They also claimed that SB 1070 would allow Arizona citizens to reclaim jobs from undocumented workers. Somehow, they believed that chasing tens of thousands of immigrants from the state who rent homes, purchase cars, buy groceries and buy clothes would improve the state’s economy.

Apparently they also believe that outlawing a Latino studies program in the Tucson school district, eliminating the poor from Medicaid, attacking the federal government, cutting school budgets, redirecting money to private schools and private prisons, closing rest stops, closing state parks, demanding further proof of Obama’s citizenship, and telling the world that Arizona is unsafe, would entice tourists and sophisticated corporations to come here.

Maybe, just maybe, the right is wrong.