Why Louis Brandeis Matters: Supreme Court Justice Fought Oligarchy, ‘Bigness’

During the past hundred years, [The New Republic] has continued to champion the principles that made Brandeis the greatest constitutional philosopher of the twentieth century: opposition to the curse of bigness, in corporations and government; devotion to judicial restraint in cases involving economic regulations; judicial vigilance in cases involving free speech and civil liberties; and an enthusiasm for Zionism. But this is an especially appropriate time to evaluate Brandeis’s legacy. The nomination of Elena Kagan to Brandeis’s seat on the Supreme Court comes at a time when progressives are rediscovering the virtues of judicial restraint, as conservatives rush to court to challenge their political defeats in areas ranging from corporate campaign spending to health care reform and economic oversight. And a masterful new biography by Melvin Urofsky offers all the biographical details necessary for reassessing Brandeis’s uncanny relevance.

Read more: Boston, Other People's Money, The New Republic, Louis Brandeis, Bigness, Big Business, Regulation, JP Morgan, Harvard, Big Government, Oligarchy, Rockefeller, Supreme Court, Money Trusts, Financial Crisis, Wall Street, Politics News

LaDonna Pavetti: More Praise for Job-Creating TANF Emergency Fund

“A Jobs Program that Works” is New York Times columnist Bob Herbert’s apt description of the TANF Emergency Fund, which more than 30 states are using to help create private- and public-sector jobs for nearly 200,000 adults and youth. The job market’s continued weakness shows why these programs remain important tools for boosting employment and the overall economy. But as I’ve warned, many states will begin shutting down their programs in the next few weeks unless Congress extends the fund.

States as diverse as Illinois (which is placing as many as 500 people a day in subsidized jobs), South Carolina (which expects to place 600 people in jobs by the fund’s September 30 expiration, most of whom would otherwise receive cash assistance), and Montana (which expects to place 300 adults and 300 youth) have taken advantage of the fund. The subsidized jobs are temporary but can lead to permanent jobs as employers take over the full cost of maintaining the workers on the payroll.

This isn’t the kind of program that Congress can simply extend at the last minute. Some states have already stopped placing people in subsidized jobs because few employers want to take on new employees who can only work for them until September 30. Other states believe they can hold out until the end of July but no longer. Meanwhile, states have employers and unemployed individuals waiting to participate in the program.

Further delays in extending the fund will mean that programs will place fewer people in jobs and some people who are currently employed will return to the ranks of the unemployed — the opposite of what the economy needs right now.

LaDonna Pavetti is director of the welfare reform and income support division at the Center on Budget and Policy Priorities and blogs regularly at Off the Charts.

Read more: Jobs, Unemployment, Recession, Economy, Politics News

Stewart Acuff: Corporate America Offshoring more Jobs in Economic Crisis

Just a week ago I had the honor of being in Mt. Vernon, Indiana for a major protest against the closing of a large Whirlpool factory that had employed 1200 people so they could move the work to Mexico.

In Minnesota, Polaris snowmobiles announced they are closing their factory in Osceola to move that work to Mexico.

Both these decisions made by Corporate America and our Financial Elite during the worst economic crisis and highest unemployment since the Great Depression 70 years ago.

These totally unjustifiable decisions reinforce the fact that the free market isn’t free, that free trade isn’t free, that the invisible hand of the market is a myth and that unregulated, de-regulated capitalism ultimately only works for the Financial Elite.

As I spoke at a rally of some 1200 folks in southern Indiana I looked at the former Whirlpool workers who had just lost their jobs and thought they will never find jobs as good as they lost the rest of their lives. They had had a union and decent wages and benefits, dignity, and a decent quality of life for their families. But for most of them who can’t yet retire all that is now gone. They will find only poverty level jobs–if that.

How long will America force its own people into poverty just to pad the pockets of those who make more in a day than we could spend in a lifetime? How long will CEOs demand salaries over 400 times as much as the people who work for them and produce the goods and services that make a profit and allow CEOs to be so handsomely rewarded? How long will the Financial Elite who drove our economy into the ditch and yet still haven’t suffered at all force the kids of working families into poverty? How long will the middle class survive this ongoing, continuous assault on our wages, our benefits, and working families quality of life? And how long will we continue to pretend that the American Dream is still accessible to those who work hard, play by the rules, and try to live a good life?

As we say in our new book, Getting America Back to Work, America has officially stopped working for ordinary Americans and now only works for the unimaginably rich and powerful. When the Financial Elite, Corporate America, and their Right-wing Republican allies destroyed the freedom to form unions and bargain collectively, they destroyed America’s best ever exit ramp from poverty and entrance ramp to the middle class. They also destroyed the American Dream for millions of workers stuck in poverty level job with no hope of a decent future.

Our new book, Getting America Back to Work, lays out in very accessible language what has happened to the U.S. economy and what will take to get America back to work for ordinary Americans. Destroying the lives of average Americans only makes things worse.

Here is video of the speech:

Read more: Getting America Back to Work, Offshoring, Whirlpool, Utility Workers Union of America, Afl-Cio, Financial Crisis, Stewart Acuff, Corporate Greed, Uwua, Politics News

Leah Anthony Libresco: A Tale of Phrenologists and Predatory Lenders

In Tennessee, defendants won a court case in which prosecutors had attempted to stop them from marketing a service that was to be “inherently fraudulent.”

No, the above is not the latest update on the battle over overdraft fees and payday loans. The embattled businessmen were not part of the banking industry currently trying to lobby their way out of regulation, but a group of fortune tellers, who were successful in striking down a local ordinance requiring all fortunetellers, clairvoyants, hypnotists, phrenologists, etc. to post a disclaimer if they attempted to ply their trade for profit.

The plaintiffs didn’t seek to outlaw fortunetelling per se, they just wanted the psychics held to some standard of truth in advertising. If the psychics couldn’t provide evidence to back up their own hype, well, that was just too bad.

The rhetoric Barbara Moss, one of the attorneys for the psychics, argued that selling is a form of protected speech. She said:

“A person is free to write or sell books saying that the earth is flat or the moon is made of green cheese. Our client should be free to make predictions, for fun or profit, without government interference.”

This argument fails to recognize that there is a difference between claiming the moon is made of cheese and selling your cheese to gullible customers by marketing it as genuine moon-cheese, shipped back by satellite.

The question comes up again and again for regulators and lawmakers. When is a product so harmful that it ought not be sold at all? When is a product so noxious that we can conclude that no one would freely choose to buy it if they were fully informed? This is what is at the root of many of our debates over cigarettes and other mostly toxic products. Companies argue that the existence of a market for the product shows that customers have judged what they’re selling to be worth the risk.

This is the argument we keep hearing as the Senate lumbers towards passing a financial reform bill. The status quo is justified by its own existence, since no financial product or service would exist if there weren’t an eager market of perfectly rational actors eager to buy. This assertion ignores the fact that, even if most consumers were never used biased heuristics when making decisions, the choices of rational actors are only as good as the data they use to decide.

Efforts to refine and simplify the data available to consumers is one of the most important avenues of reform. A recent study found that, when the actual costs of a payday loan are added to the standard disclosure of APR, people turn down the loans. Payday loans, at least in part, are a problem of limited information and education.

The obvious solution is ensuring better financial education for all. But, given the our current inability to make sure high school graduates understand basic math, that day may be long in coming. Until we have a reasonable expectation that consumers are able to access and evaluate the data required to identify predatory loans, government regulation should fill the gap.

Government regulation of financial services does limit the choices of consumers. That is its purpose.

When we are unable to discern the correct choice, and the stakes are high, we ask other people to take the choice away from us and place it in the hands of people who know better. Just as the responsible drinker hands over her keys when she heads out to a party, we turn to regulatory limitations to prevent us from making choices that could harm us or others.
People who are misinformed do not know that their reasoning is compromised. If we were capable of knowing which choices we couldn’t be trusted to make sensibly, we would be able to make them correctly in the first place. Psychologists call this problem the Dunning-Kruger Effect.

Paternalistic regulations exist to help you make the choice you would have made if you were fully informed, and the financial sector, with its tiny print and deceptive practices (how many pleas from banks to not let your overdraft protection lapse did you get this summer?) is crying out for reform.

Our banking system nearly collapsed because some quants claimed supernatural powers of prognostication. Let’s see if we can hold consumer credit providers to a higher standard than street corner clairvoyants.

Read more: Fraud, Financial Crisis, Paternalism, Financial Reform, Overdraft Fees, Payday Loans, Business News

The Media Consortium: Weekly Audit: Congressional Inaction Feeding Unemployment Crisis

by Zach Carter, Media Consortium Blogger

After months of modest gains, the U.S. economy lost 125,000 jobs during June. That’s the worst jobs-related news this year. Without serious action soon, the struggling U.S. economy is going to get even uglier. Unfortunately, President Barack Obama’s economic team was slow to recognize the severity of the jobs crisis, and now seems unable to get Congress to actually do something about it.

As David Corn notes for Mother Jones, the recent jobs data is actually much worse than the 125,000 figure implies:

“The economy needs about 150,000 new jobs a month to keep up with population growth and new entries into the jobs market. It needs a lot more than that to make up for the 8 million or so jobs lost in 2008 and 2009.”

Recession 2.0

Although the economy sluggishly recovered from the catastrophic events of late 2008, economists are warning of a “double-dip” recession in which mass layoffs return. So why is Congress refusing to deal with the jobs crisis in the face of such terrible economic conditions?

Part of the problem, Corn notes, is that Obama didn’t do a very good job selling his economic stimulus package to the public. The bill, which Obama pushed through in early 2009, really did improve the economy–it’s the only reason why the unemployment rate is hovering around 10 percent instead of 12 percent or 13 percent. But by refusing to counter Republican attacks on so-called “wasteful spending” included in the package, Obama failed to show the public how much good the stimulus has done. Instead, the bill is widely perceived as another wasteful giveaway to special interests and akin to the bank bailout.

Spending is stimulus

In reality, government spending is the best way to stimulate the economy during a deep recession. It makes up for the shortfall in spending from consumers who have lost their jobs.

There are all kinds of ways the federal government can spend money to create jobs, including extending unemployment benefits to laid-off workers, providing funding to states to allow them to hire more teachers and cops, and hiring people to build roads and buildings. The government did all of these things with the stimulus package from early 2009, but it didn’t do enough of any of them. The stimulus package was simply spread to thin.

Roots of recession

As Robert Reich explains for The Nation, the recession itself was created by deep economic inequality. By 2007, the wealthiest 1 percent of Americans made 23.5 percent of the nation’s total income. Figures like that had not been seen since 1929, when the richest 1 percent made 23.9 percent of the nation’s total wealth. All of this concentration at the top means that the elite enjoy a disproportionate share of economic gains, but it also sets the entire economy up for massive shocks.

When the rich have all of that money, they have to invest it somewhere. When the majority of citizens are seeing sluggish wage growth, or even a drop in wages, as the U.S. experienced during the Bush years, there aren’t enough valuable assets out there that can absorb that investment. As a result, rich people put their money in speculative asset bubbles. When those bubbles burst, the entire economy can come crashing down, as it did in both 1929 and 2008.

Rampant inequalities around the globe

As Melinda Burns highlights for AlterNet, rampant inequality in not unique to the U.S. More than half of the world’s population lives on less than $2 a day, and decades of conservative economic policies have been unable to reverse that hardship.

One of the best ways to relieve global poverty is also one of the most intuitive–give money to the poor. Brazil has made an aggressive push to cope with widespread poverty by providing $31 billion in pensions and grants to the poor every year. As a result, the nation’s poverty rate has declined from 28 percent in 2000 to 17 percent in 2008, while child malnutrition was cut in half. These policies make good economic sense. When poor people have money to spend, they spend it and fuel growth that benefits the entire economy.

Social insecurity

And yet in the U.S., Obama is seriously considering cutting Social Security in order to reduce the federal budget deficit. As Margaret Smith emphasizes for In These Times, Obama has created a bipartisan “debt commission,” and packed it full of ideologues from both political parties who have been fighting for years to slash Social Security.

This doesn’t really make sense, because Social Security is funded by its own dedicated tax revenue, and is sitting on a multi-trillion-dollar surplus created by those taxes. It really can’t do much to reduce the deficit. With interest rates at record lows, lawmakers do not currently have any reason to be worried about the deficit. But if they wanted to take action on it, they’d have to deal with long-term issues like the rising cost of health care, the bloated defense budget and absurdly low tax rates on the rich. Cutting off income for senior citizens won’t help.

Blocking economic stimulus won’t help

And neither will efforts to block short-term economic stimulus. But Obama’s emphasis on the budget deficit plays into the hands of Congressional opportunists who want to block his economic recovery efforts. If we’re told over and over again that the real economic problem is the budget deficit, no money is going to be dedicated to problems like jobs–even if that money would actually help the government’s fiscal position by fueling economic growth.

The American economy is in the middle of an absolute employment crisis. Without strong federal action, it’s going to get worse.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Read more: David Corn, Margaret Smith, Robert Reich, Pensions, Jobs, The Nation, Unemployment Rate, Alternet, Debt Commission, Layoffs, Deficit, Unemployment, Mother Jones, Melinda Burns, In These Times, Economic Inequality, Stimulus Package, Economy, Home News

U.S. songbirds carry low-risk bird flu, study finds

WASHINGTON (Reuters) – Songbirds such as sparrows and thrushes carry various forms of bird flu and could potentially spread the viruses to pigs and poultry, U.S. researchers reported on Tuesday.

Toyota issues U.S. recall of 139,000 Lexus vehicles

DETROIT (Reuters) – Toyota Motor Corp said on Tuesday it had received reports more than three years ago of faulty engine valve springs at the center of a U.S. recall of nearly 139,000 luxury Lexus vehicles it announced last week.

Obama voices hope for direct Middle East talks soon

WASHINGTON (Reuters) – U.S. President Barack Obama urged Israel and the Palestinians on Tuesday to resume direct peace talks by September and Israeli Prime Minister Benjamin Netanyahu said he will take “concrete steps” to clear the way.