‘Metrosexual Black Abe Lincoln’ By CHARLES M. BLOW

 

The New York Times reported on Thursday that a Republican “super PAC” was mulling over a plan to resurrect President Obama’s former pastor and spiritual adviser, the Rev. Jeremiah Wright Jr., as a weapon against the president.

 

Obama Justice and medical marijuana

The President’s justification for his crackdown on medical marijuana dispensaries has to be heard to be believed

BY GLENN GREENWALD

• President Obama gave an interview to Rolling Stone‘s Jann Wenner this week and was asked about his administration’s aggressive crackdown on medical marijuana dispensaries, including ones located in states where medical marijuana is legal and which are licensed by the state; this policy is directly contrary to Obama’s campaign pledge to not “use Justice Department resources to try and circumvent state laws about medical marijuana.” Here’s part of the President’s answer:

I never made a commitment that somehow we were going to give carte blanche to large-scale producers and operators of marijuana – and the reason is, because it’s against federal law. I can’t nullify congressional law. I can’t ask the Justice Department to say, “Ignore completely a federal law that’s on the books” . . . .

The only tension that’s come up – and this gets hyped up a lot – is a murky area where you have large-scale, commercial operations that may supply medical marijuana users, but in some cases may also be supplying recreational users. In that situation, we put the Justice Department in a very difficult place if we’re telling them, “This is supposed to be against the law, but we want you to turn the other way.” That’s not something we’re going to do. 

Aside from the fact that Obama’s claim about the law is outright false — as Jon Walker conclusively documents, the law vests the Executive Branch with precisely the discretion he falsely claims he does not have to decide how drugs are classified — it’s just extraordinary that Obama is affirming the “principle” that he can’t have the DOJ “turn the othe way” in the face of lawbreaking. As an emailer just put it to me: “Interesting how this principle holds for prosecuting [medical] marijuana producers in the war on drugs, but not for prosecuting US officials in the war on terror.  Or telecommunications companies for illegal spying.  Or Wall Street banks for mortgage fraud.”

That’s about as vivid an expression of the President’s agenda, and his sense of justice, and the state of the Rule of Law in America, as one can imagine. The same person who directed the DOJ to shield torturers and illegal government eavesdroppers from criminal investigation, and who voted to retroactively immunize the nation’s largest telecom giants when they got caught enabling criminal spying on Americans, and whose DOJ has failed to indict a single Wall Street executive in connection with the 2008 financial crisis or mortgage fraud scandal, suddenly discovers the imperatives of The Rule of Law when it comes to those, in accordance with state law, providing medical marijuana to sick people with a prescription.

 

UPDATE: Andrew Sullivan has a good post elaborating on the point made here, but partially defends Obama this way: “To be fair to Obama, he specifically said the policy was against those abusing the medical marijuana law to sell illegally.” I concede it’s a bit ambiguous, but I don’t think that’s what Obama is saying. He’s not claiming they’re targeting only dispensaries that sell to recreational users in violation of the law; rather, he’s saying that all large dispensaries inherently have the potential to do so and must therefore be targeted (Obama: it’s “a murky area where you have large-scale, commercial operations that may supply medical marijuana users, but in some cases may also be supplying recreational users”).

Much more important, though, is that the Obama DOJ is aggressively prosecuting dispensaries without any suggestion that they’re breaking local law, and worse, is threatening states considering enacting medical marijuana laws that dispensing medical marijuana, in and of itself, even to sick people with a prescription, is a violation of federal law that will be prosecuted. So if, as Andrew suggests, Obama is actually claiming that they’re only targeting medical marijuana dispensaries when they are violating state law by providing to recreational users, that’s patently untrue. They are aggressively targeting medical marijuana dispensaries even when they are in full compliance with state and local law.

 

JPMorphing

When he disclosed a stunning $2 billion trading loss at JPMorgan Chase last week, Jamie Dimon, the bank’s chief executive, insisted that the trades had not violated the Volcker Rule, a crucial part of the Dodd-Frank reform law that is supposed to bar banks from doing risky trading for their own account.

When the 1 Percent Fails to Contribute Its Fair Share, Veterans Pay Dearly

Jon Soltz

Co-Founder of VoteVets.org, Iraq War Veteran

 

Over the last few weeks, thousands of people from across the country have taken to the streets to demand the biggest corporations in the U.S. pay their fair share of taxes. Last week, Bank of America was the latest corporation to face the wrath of shareholders and protesters for its business practices; this week,it’s JPMorgan Chase, which is at the center of shareholder anger after losing $2 billion in investments, and Morgan Stanley, which has slashed jobs and rewarded its executives with lavish pay and bonuses despite its role in thefinancial meltdown.

The America that allows huge corporations to cut jobs here at home and get large tax breaks in the process is not the America I fought for. What has happened to basic fairness in our economy when so many troops come back from their service, unable to find a decent job, yet still pay more in taxes than the likes of billionaires or huge corporations like GE?

Veterans have served our country at considerable sacrifice. No one enlists to become rich or famous. We’ve spent significant time away from our families and worked in life-threatening situations. We care about our country and we invest in it every day with our time and expertise. We work hard and play by the rules. Along with almost everyone else in this country, veterans pay our taxes so that our kids can go to school, so we have clean air and water, and healthcare when we need it. Veterans also pay our taxes to help provide people currently serving in our military with the resources they need, both in the field and when they come home.

As it turns out, big corporations aren’t playing by the same rules — and our communities are paying for it. Families are struggling to stay in their homes, facing joblessness and cuts to vital services. Our children’s schools are crumbling and the American Dream — a good life for those who work hard and play by the rules — is receding further and further out of sight.

Many who served in Iraq and Afghanistan were part of the National Guard. While they can’t be laid-off while deployed, there was no guarantee the company or small business they worked for would exist when they came home. Military families are particularly hard-hit, often having to make do with less income while loved ones are deployed, and expenses like child care increase in a temporary one-parent household. They need relief.

Yet corporations like General Electric, Wells Fargo and Bank of America rake in billions and get away with paying no federal income taxes, or are taxed at a lower rate than those serving in the military. Their refusal to pay their fair share has cost our economy billions of dollars that could fund Medicare, education, veterans’ services, and create jobs for men and women returning from service.

Tax-dodging General Electric was once a shining example of American enterprise, providing good jobs that could support families. Entire towns and cities grew around GE plants and generations of families worked for GE for their entire lives. Innovation and job creation went hand in hand and as GE grew, so did our economy.

Now, GE is the poster-child for corporate tax-dodging. GE keeps billions offshore, avoiding U.S. taxes. It lavishes millions on executives while cutting tens of thousands of jobs, and employs an army of tax attorneys and political lobbyists like Capitol Tax Partners (which also lobbies for Goldman Sachs, JPMorgan Chase, State Street Corporation and other Wall Street giants that crashed the economy) to buy influence, invent and lobby for corporate tax loopholes, and keep GE ahead of its tax bill.

From 2008 to 2011, while hundreds of millions of Americans lost their jobs, their homes, and their dreams, GE made $10.5 billion in U.S. profits. Rather than pay federal income taxes, GE received $4.7 billion from U.S. taxpayers. We pay income taxes even on our unemployment insurance, but GE got away with paying a scant 2.3 percent in taxes over the last decade.

GE claims they’ve used these loopholes to create jobs. But that’s not true. Since 2004, GE has cut 32,000 jobs, even though the corporation’s board of directors is stacked with “job creators.” Meanwhile, the unemployment rate for the youngest age bracket of Iraq and Afghanistan veterans topped 20 percent last year.

Those of us who served this country didn’t do so in order to safeguard tax loopholes for the wealthiest 1 percent and giant corporations. We have a deep sense of duty and loyalty to our communities, to our children’s futures, and to seeing our fellow Americans achieve their dreams.

It is time that those of us who served our country, and those we served for, join together to demand an economy and an America that work for all of us.

Jon Soltz is an Iraq War Veteran and Chairman of VoteVets.org.

Occupy Isn’t About Electing Democrats–It’s About Exposing a Broken System

 

The Mississippi Freedom Democratic Party didn’t succeed by electing candidates–it succeeded showing the limitations of the electoral system. Occupy should do the same.

As long as there has been a thing called Occupy Wall Street, there have been people who’ve suggested it should become the left’s version of the Tea Party. Josh Harkinson’s piece is a notable contribution to the conversation because it comes after eight months of in-depth reporting on the movement. Harkinson, like Jennifer Granholm, suggests that Occupy should recruit and run candidates, so the left has champions in Congress and can credibly threaten less ideologically aligned Democrats. According to this logic, it doesn’t matter if Occupy does this itself or essentially outsources the job to our progressive allies — the point is to find ways to elect more good Democrats.

The idea of a progressive Tea Party was totally my jam before Occupy started. Like Harkinson, I didn’t see how the left could create real change in America without taking control of the Democratic Party. Now I think it’s important to recognize that the problems we face as a country can’t be solved by electing more Democrats, or even by electing more good Democrats. A progressive Tea Party would be a welcome addition, but it wouldn’t be nearly enough to create the kind of change we need.

If Occupy tried to start a left Tea Party, we would be following in the footsteps of several progressive movement efforts that came up short. Howard Dean’s presidential campaign turned into Democracy for America to reclaim the “Democratic wing of the Democratic Party,” the Progressive Change Campaign Committee explicitly references the DCCC, and Rebuild the Dream originally billed itself as the progressive Tea Party. I have worked for each of these organizations and have lots of respect for their work. But unfortunately, none of these projects, despite their many successes, have managed to mount a serious national effort to take out bad Democrats and replace them with good ones. They are constrained by the lack of a grassroots base in many congressional districts and big donors reluctance to fund challenges to Democrats. Even big, collaborative efforts to take out bad Democrats have a relatively poor record (See Sheyman, Ilya; Halter, Bill; or Lamont, Ned).

Occupy is less well suited than the Progressive movement to overcome these challenges. Most occupiers I know aren’t interesting in learning how to raise money, knock on doors, or run campaigns. Starting a progressive Tea Party is a completely legitimate, useful goal — but it’s something for the progressive institutions to take on. New York state and city provide a good model for how this can work harmoniously: the Working Families Party is a unified progressive block within the Democratic party. They support Occupy and we support them on the issues. Together, we won a huge, unexpected victory for the millionaires tax.

Despite the hard work of our progressive allies, the unfortunate reality is that our political system as presently constructed is simply incapable of responding to people’s needs. The election of the most progressive Democratic nominee of the past 30 years and a Democratic super majority in Congress resulted in relatively little change in American political economy, even during a time of massive economic crisis. The tepid response showed our political system was designed to serve the whims of the market, and no politician has the power to do much about it.

My generation doesn’t put all, or even most, of the blame for this state of affairs on President Obama. We don’t hate the player, so much as we hate the game. I believe Democrats are better than Republicans, because Democrats care more about the lives of gays, women, and people of color. I also believe everyone should all vote, because not voting would hurt people that I care about. That being said, we won’t just win by getting new players — we need to change the game. The system is fundamentally incapable of healing itself.

Occupy is hardly alone in believing our political system is in a state of crisis. Congress’ approval is at 9 percent. Many have written that our 18th Century political system has proven itself uniquely incapable of responding to external circumstances, including noted radicals like James Fallows, Ezra Klein and Matt Yglesias. The presidential system is prone to gridlock (and, frankly, falling apart) and our byzantine, bicameral legislative system makes it incredibly difficult for even winning parties to put their agenda into law. The crisis of parliamentary democracy taking place in Europe is happening in America as well.

Occupy grew at such an exponential rate because it spoke to people’s sense that the rules of our society are deeply unfair and the political system couldn’t do anything about it. In the midst of systemic failure, only Occupy was talking about systemic change. Occupy transformed the public debate by naming the problem — inequality of wealth and power — and the cause – the power of Wall Street. More important than our discursive accomplishments, we showed what an independent, citizen-led social movement for equality and democracy could look like in America. I don’t want to argue we’ve yet built that movement, because it’s still very much a work in progress. By giving people the space to connect, Occupy showed that people power is the only force capable of shaking the foundation of our corrupt system.

Only Occupy can provide the space, literally and figuratively, for this conversation. The Occupy movement would derelict of duty if we focused on the electoral at the expense of putting pressure on the system as a whole. The entirety of civic life can not be reduced to a get out the vote campaign. The left needs strategies that take aim at all the ways neo-liberalism breaks down our communities. The inherent conservatism of America government, and the limitations of electoral organizing, means we need inside and an outside strategies.

Occupy has already inspired a new generation of social justice leaders to build an inclusive, radical movement that also speaks to the mainstream. We continue to push institutional groups towards more confrontational forms of resistance, bring new people into the struggle and provide a unifying message. Like the civil rights, women’s rights, environmental movements before us, we can’t afford to ignore the electoral realm, but we also shouldn’t expect to succeed by voting alone. The Mississippi Freedom Democratic Party didn’t succeed by electing candidates — it succeeded showing the limitations of the electoral system. Occupy should aim to do the same.

By Max Berger

150 Achievements Of Liberalism That Conservatives Seek To Destroy

 

1. The 40-hour work week.

2. Weekends

3. Vacations

4. Women’s Voting Rights

5. The Civil Rights Act of 1964

6. The right of people of all colors to use schools and facilities.

7. Public schools.

8. Child-labor laws.

9. The right to unionize

10. Health care benefits

11. National Parks

12. National Forests

13. Interstate Highway System

14. GI Bill

15. Labor Laws/Worker’s Rights

16. Marshall Plan

17. FDA

18. Direct election of Senators by the people.

19. Occupational Safety and Health Administration, Workplace safety laws

20. Social Security

21. NASA

22. The Office of Congressional Ethics. Created in 2008.

23. The Internet

24. National Weather Service

25. Product Labeling/Truth in Advertising Laws

26. Rural Electrification/Tennessee Valley Authority

27. Morrill Land Grant Act

28. Public Universities

29. Bank Deposit Insurance

30. Centers for Disease Control and Prevention

31. Consumer Product Safety Commission

32. Public Broadcasting/Educational Television

33. Americans With Disabilities Act

34. Family and Medical Leave Act

35. Environmental Protection Agency

36. Clean Air Act

37. Clean Water Act

38. USDA

39. Public Libraries

40. Transcontinental Railroad and the rail system in general

41. Civilian Conservation Corps

42. Panama Canal

43. Hoover Dam

44. The Federal Reserve

45. Medicare

46. The United States Military

47. FBI

48. CIA

49. Local and state police departments

50. Fire Departments

51. Veterans Medical Care

52. Food Stamps

53. Federal Housing Administration

54. Extending Voting Rights to 18 year olds

55. Freedom of Speech

56. Freedom of Religion/Separation of Church and State

57. Right to Due Process

58. Freedom of The Press

59. Right to Organize and Protest

60. Pell Grants and other financial aid to students

61. Federal Aviation Administration/Airline safety regulations

62. The 13th Amendment

63. The 14th Amendment

64. The 15th Amendment

65. Unemployment benefits

66. Women’s Health Services

67. Smithsonian Institute

68. Head Start

69. Americorps

70. Mine Safety And Health Administration (This has been weakened by conservatives, resulting in recent mining disasters.)

71. Food Labeling

72. WIC

73. Peace Corps

74. United Nations

75. World Health Organization

76. Nuclear Treaties

77. Lincoln Tunnel

78. Sulfur emissions cap and trade to eliminate acid rain

79. Earned Income Tax Credit

80. The banning of lead in consumer products

81. National Institute of Health

82. Garbage pickup/clean streets

83. Banning of CFCs.

84. Erie Canal

85. Medicaid

86. TARP

87. Bail Out of the American Auto Industry

88. Lily Ledbetter Fair Pay Act

89. Wildlife Protection

90. End of Don’t Ask Don’t Tell

91. Established the basis for Universal Human Rights by writing the Declaration of Independence

92. Miranda Rights

93. Banning of torture

94. The right to a proper defense in court

95. An independent judiciary

96. The right to vote

97. Fair, open, and honest elections

98. The right to bear arms (Do you really think extreme right wingers would allow anybody besides themselves to have firearms if in power?)

99. Health care for children and pregnant women

100. A stable and strong government established by a Constitution

101. The founding of The United States of America

102. The defeat of the Nazis and victory in World War II

103. Paramedics

104. The Brady Handgun Act

105. The Glass-Steagall Act (It has since been repealed and we’ve been paying the price for it.)

106. Oil industry regulations (The Gulf paid the price after conservatives tore many of these regulations down.)

107. The Affordable Care Act which makes insurance companies more honest and fair.

108. Woman’s Right to Choose

109. Title IX

110. Affirmative Action

111. A National Currency

112. National Science Foundation

113. Weights and measures standards

114. Vehicle Safety Standards

115. NATO

116. The income tax and power to tax in general, which have been used to pay for much of this list.

117. 911 Emergency system

118. Tsunami, hurricane, tornado, and earthquake warning systems

119. Public Transportation

120. The Freedom of Information Act

121. Emancipation Proclamation, which ended slavery

122. Antitrust legislation which prevents corporate monopolies (These laws have been savaged by conservatives, which is why corporations are getting huger and competition is disappearing leading to less jobs and high prices.)

123. Water Treatment Centers and sewage systems

124. The Meat Inspection Act

125. The Pure Food And Drug Act

126. The Bretton Woods system

127. International Monetary Fund

128. SEC, which regulates Wall Street. (Conservatives have weakened this regulatory body, resulting in the current recession.)

129. National Endowment for the Arts

130. Campaign finance laws (Conservatives have gutted these laws, leading to corporate takeovers of elections.)

131. Federal Crop Insurance

132. United States Housing Authority

133. Soil Conservation

134. School Lunch Act

135. Mental Retardation Facilities and Community Mental Health Centers Construction Act

136. Vaccination Assistance Act

137. Over the course of nearly 50 years, liberals contributed greatly to the eventual end of the Cold War.

138. The creation of counterinsurgency forces such as the Navy Seals and Green Berets.

139. Voting Rights Act, which ended poll taxes, literacy tests, and other voter qualification tests.

140. Civil Rights Act of 1968

141. Job Corps

142. Elementary and Secondary Education Act of 1965

143. Teacher Corps

144. National Endowment for the Humanities

145. Endangered Species Preservation Act of 1966

146. National Trails System Act of 1968

147. U.S. Postal Service

148. Title X

149. Kept the Union together through Civil War and rebuilt the South afterwards.

150. Modern Civilization

Author, End This Depression Now! Paul Krugman

The following is excerpted from “End This Depression Now!” available now from W.W. Norton & Company.

 

CHAPTER ONE: HOW BAD THINGS ARE

 

I think as those green shoots begin to appear in different markets and as some confidence begins to come back that will begin the positive dynamic that brings our economy back.

Do you see green shoots?

 

I do. I do see green shoots.

–Ben Bernanke, chairman of the Federal Reserve, interviewed by 60 Minutes, March 15, 2009

In March 2009 Ben Bernanke, normally neither the most cheerful nor the most poetic of men, waxed optimistic about the economic prospect. After the fall of Lehman Brothers six months earlier, America had entered a terrifying economic nosedive. But appearing on the TV show 60 Minutes, the Fed chairman declared that spring was at hand.

His remarks immediately became famous, not least because they bore an eerie resemblance to the words of Chance, aka Chauncey Gardiner, the simpleminded gardener mistaken for a wise man in the movie Being There. In one scene Chance, asked to comment on economic policy, assures the president, “As long as the roots are not severed, all is well and all will be well in the garden. . . . There will be growth in the spring.” Despite the jokes, however, Bernanke’s optimism was widely shared. And at the end of 2009 Time declared Bernanke its Person of the Year.

Unfortunately, all was not well in the garden, and the promised growth never came.

To be fair, Bernanke was right that the crisis was easing. The panic that had gripped financial markets was ebbing, and the economy’s plunge was slowing. According to the official scorekeepers at the National Bureau of Economic Research, the so-called Great Recession that started in December 2007 ended in June 2009, and recovery began. But if it was a recovery, it was one that did little to help most Americans. Jobs remained scarce; more and more families depleted their savings, lost their homes, and, worst of all, lost hope. True, the unemployment rate is down from the peak it reached in October 2009. But progress has come at a snail’s pace; we’re still waiting, after all these years, for that “positive dynamic” Bernanke talked about to make an appearance.

And that was in America, which at least had a technical recovery. Other countries didn’t even manage that. In Ireland, in Greece, in Spain, in Italy, debt problems and the “austerity” programs that were supposed to restore confidence not only aborted any kind of recovery but produced renewed slumps and soaring unemployment.

And the pain went on and on. I’m writing these words almost three years after Bernanke thought he saw those green shoots, three and a half years after Lehman fell, more than four years after the start of the Great Recession. The citizens of the world’s most advanced nations, nations rich in resources, talent, and knowledge–all the ingredients for prosperity and a decent standard of living for all–remain in a state of intense pain.

In the rest of this chapter I’ll try to document some of the main dimensions of that pain. I’ll focus mainly on the United States, which is both my home and the country I know best, reserving an extended discussion of the pain abroad for later in the book. And I’ll start with the thing that matters most–and the thing on which we’ve performed the worst: unemployment.

The Jobs Drought

Economists, the old line goes, know the price of everything and the value of nothing. And you know what? There’s a lot of truth to that accusation: since economists mainly study the circulation of money and the production and consumption of stuff, they have an inherent bias toward assuming that money and stuff are what matter. Still, there is a field of economic research that focuses on how self-reported measures of well-being, such as happiness or “life satisfaction,” are related to other aspects of life. Yes, it’s known as “happiness research”–Ben Bernanke even gave a speech about it in 2010, titled “The Economics of Happiness.” And this research tells us something very important about the mess we’re in.

Sure enough, happiness research tells us that money isn’t all that important once you get to the point of being able to afford the necessities of life. The payoff to being richer isn’t literally zero–citizens of rich countries are, on average, somewhat more satisfied with their lives than citizens of less well-off nations. Also, being richer or poorer than the people you compare yourself with is a fairly big deal, which is why extreme inequality can have such a corrosive effect on society. But when all is said and done, money is less important than crude materialists–and many economists–would like to believe.

That’s not to say, however, that economic affairs are unimportant in the true scale of things. For there’s one economics-driven thing that matters enormously to human well-being: having a job. People who want to work but can’t find work suffer greatly, not just from the loss of income but from a diminished sense of self-worth. And that’s a major reason why mass unemployment–which has now been going on in America for four years–is such a tragedy.

How severe is the problem of unemployment? That question calls for a bit of discussion.

Clearly, what we’re interested in is involuntary unemployment. People who aren’t working because they have chosen not to work, or at least not to work in the market economy–retirees who are glad to be retired, or those who have decided to be full-time housewives or househusbands–don’t count. Neither do the disabled, whose inability to work is unfortunate, but not driven by economic issues.

Now, there have always been people claiming that there’s no such thing as involuntary unemployment, that anyone can find a job if he or she is really willing to work and isn’t too finicky about wages or working conditions. There’s Sharron Angle, the Republican candidate for the Senate, who declared in 2010 that the unemployed were “spoiled,” choosing to live off unemployment benefits instead of taking jobs. There are the people at the Chicago Board of Trade who, in October 2011, mocked anti-inequality demonstrators by showering them with copies of McDonald’s job application forms. And there are economists like the University of Chicago’s Casey Mulligan, who has written multiple articles for the New York Times website insisting that the sharp drop in employment after the 2008 financial crisis reflected not a lack of employment opportunities but diminished willingness to work.

The classic answer to such people comes from a passage near the beginning of the novel The Treasure of the Sierra Madre (best known for the 1948 film adaptation starring Humphrey Bogart and Walter Huston): “Anyone who is willing to work and is serious about it will certainly find a job. Only you must not go to the man who tells you this, for he has no job to offer and doesn’t know anyone who knows of a vacancy. This is exactly the reason why he gives you such generous advice, out of brotherly love, and to demonstrate how little he knows the world.”

Quite. Also, about those McDonald’s applications: in April 2011, as it happens, McDonald’s did announce 50,000 new job openings. Roughly a million people applied.

If you have any familiarity with the world, in short, you know that involuntary unemployment is very real. And it’s currently a very big deal.

How bad is the problem of involuntary unemployment, and how much worse has it become?

The U.S. unemployment measure you usually hear quoted in the news is based on a survey in which adults are asked whether they are either working or actively seeking work. Those who are seeking work but don’t have jobs are considered unemployed. In December 2011 that amounted to more than 13 million Americans, up from 6.8 million in 2007.

If you think about it, however, this standard definition of unemployment misses a lot of distress. What about people who want to work, but aren’t actively searching either because there are no jobs to be had, or because they’ve grown discouraged by fruitless searching? What about those who want full-time work, but have only been able to find part-time jobs? Well, the U.S. Bureau of Labor Statistics tries to capture these unfortunates in a broader measure of unemployment, known as U6; it says that by this broader measure there are about 24 million unemployed Americans–about 15 percent of the workforce–roughly double the number before the crisis.

Yet even this measure fails to capture the extent of the pain. In modern America most families contain two working spouses; such families suffer, both financially and psychologically, if either spouse is unemployed. There are workers who used to make ends meet with a second job, now down to an inadequate one, or who counted on overtime pay that no longer arrives. There are independent businesspeople who have seen their income shrivel. There are skilled workers, accustomed to holding down good jobs, who have been forced to accept work that uses none of their skills. And on and on.

There is no official estimate of the number of Americans caught up in this sort of penumbra of formal unemployment. But in a June 2011 poll of likely voters–a group probably in better shape than the population as a whole–the polling group Democracy Corps found that a third of Americans had either themselves suffered from job loss or had a family member lose a job, and that another third knew someone who had lost a job. Moreover, almost 40 percent of families had suffered from reduced hours, wages, or benefits.

The pain, then, is very widespread. But that’s not the whole story: for millions, the damage from the bad economy runs very deep.

 

 To Be Continued…

JPMorgan Chase’s $2 Billion Loss

 

Jamie Dimon, the chief executive of JPMorgan Chase, can be clear as a bell when he denounces financial reform. But on an emergency conference call with analysts on Thursday to announce the bank’s stunning $2 billion trading loss, his message was frustratingly vague.

The loss, according to Mr. Dimon, was in the bank’s “synthetic credit portfolio,” which presumably means it involved the same type of complex derivatives that played such a destructive role in the financial crisis. And Mr. Dimon said that sloppiness, bad judgment and stupidity — his own and his colleagues’ — had led to the loss.

It was a stunning admission from a man who led JPMorgan through the crisis relatively unscathed, but it doesn’t explain what actually went wrong.

What Mr. Dimon did not say is that the loss also occurred because of a continued lack, nearly four years after the crisis, of rules and regulators up to the task of protecting taxpayers and the economy from the excesses of too big to fail banks; and, yes, of protecting the banks from their executives’ and traders’ destructive risk-taking.

The fact that JPMorgan’s loss — which Mr. Dimon has warned could “easily get worse” — is not enough to topple the bank, is not the point. What matters is that JPMorgan, like the nation’s other big banks, is still engaged in activities that can provoke catastrophic losses. If policy makers do not strengthen reform, then luck is the only thing preventing another meltdown.

Bank regulators should start by adopting a forceful Volcker Rule. Proposed by Paul Volcker, the former Federal Reserve chairman and included in the Dodd-Frank reform law, the rule would curtail risky and speculative trading with the banks’ own capital.

Banks hate the Volcker Rule, because less gambling means lower profits and lower bonuses for executives and traders. Mr. Dimon has been especially contemptuous, saying at one point that “Paul Volcker by his own admission has said he doesn’t understand capital markets. He has proven that to me.” Early versions of the restrictions have been ambiguous and toothless.

Dodd-Frank also calls for new rules on derivatives — including transparent trading and requirements for banks to back their trades with collateral and capital. If such rules were in place, JPMorgan’s trades could not have escaped notice by regulators and market participants. In the face of heavy lobbying, the derivatives’ rules have also been delayed or watered down.

There are now several bills in the House, with bipartisan support, to weaken the Dodd-Frank law on derivatives. One of those would let the banks avoid Dodd-Frank regulation by conducting derivatives deals through foreign subsidiaries. The JPMorgan loss was incurred in its London office, which doesn’t lessen the effect here.

Mitt Romney has called for repealing Dodd-Frank. That may win him Wall Street cash, but it is profoundly dangerous. President Obama and Congressional Democrats can take credit for Dodd-Frank, but they have not done enough to ensure that the rules are strong enough.

The force of Mr. Dimon’s critique of Dodd-Frank has rested on his personal reputation for smarts and on JPMorgan’s sheen of invincibility. His own admitted fallibility and the bank’s shocking stumble are the best argument in favor of strong regulation. Now politicians and regulators need to stand up to the banks.