US corporations post 'near-historic' profits, as poverty and joblessness increase: Now what?

This week, the Huffington Post reported that corporate profits are at "near-historic" levels-- up 38% compared to the same time period a year ago.

It's a pretty disgusting article about how layoffs, outsourcing, and low interest rates have allowed corporatists to rake in the cash-- and hoard it-- rather than reinvest it, which would improve the nation's ecomomy.

"Since 2008, corporate profits increased 10 percent -- but revenue was down 6 percent, the WSJ [Wall Street Journal] says. To achieve the impressive quarterly results, companies have had, as the WSJ puts it, to "streamline" their operations. This means firing workers, outsourcing labor and shuttering unprofitable (or less profitable) divisions.

"The robust state of corporate profits presents a paradox: companies won't spend their money until the economy improves, but the economy won't improve until they spend their money. An increase in hiring, for example, would help drive a recovery. The New York Times reports this "chicken-and-egg" phenomenon, noting that near-zero interest rates have encouraged companies to borrow money and simply hoard it because, as the NYT puts it, 'they can.'"

This is a perfect example of how dysfunctional trickle down economic theory is.

Juxtapose this story about historic corporate profits with the stories about the widening wealth gap between rich and poor, rising poverty in most states, disappearing middle class, people living in vehicles, and states and cities going broke.

Given this scenario, how can Congressional Republicans continue to support tax cuts for the wealthiest Americans and balk any time they are asked to extend unemployment?

How can Tea Party/Republicans like Sharon Angle (Nevada), Joe Miller (Alaska), and Jesse Kelly (Arizona) call for privatization of Social Security, elimination of the health care safety net, and elimimation of the national minimum wage? Angle, Miller, and Kelly are puppets of the corporatists. I can't believe that they honestly think dissolution of these programs would help the majority of Americans.

Privatization of Social Security would just give Wall Street's corporate gamblers more money to play with and another way to boost their historic profits even higher. Elimination of the health care safety net and the minimum wage and continued outsourcing of jobs would through the US into third-world status. It would be end of life as we know it. The former US middle class would become economic refugees.

UPDATE, October 6: Blog for Arizona's AZ Blue Meanie posted Update III: The New Corporate Business Model: Increase Profits, Not Jobs.

UPDATE, October 8: Diane Rehm's Friday News Roundup covers this story. (Diane, honey, mention my blog next time, OK?)

Budget cuts: Arizona Legislature has it's meat cleavers and chainsaws ready

Random Musings and Blog for Arizona cross-posted a pretty disgusting story this afternoon about the Arizona Legislature's Finance Advisory Committee (FAC) meeting last week.

As we all know, after decades of trickle down economics and other short-sighted policies, the Republican majority in the Arizona Legislature has run this state into the ground economically and socially.

But wait... there's more!

According to an article in the Arizona Republic, Arizona has a "$2.25 billion deficit that needs to be wiped out in the next 20 months."

The purpose of last week's FAC meeting was to discuss the budget and the state's economic crisis. The briefing materials for the meeting are here, and the video is here.

Pondering what these right-wing extremists will do to balance the budget without raising revenue keeps me awake at night. As the other bloggers pointed out, the state's abysmal financial situation underscores the need for us to elect Attorney General Terry Goddard to the governorship.

We saw how crazy Phoenix was last spring with Republican Governor Jan Brewer at the helm and Republicans controlling both houses in the Legislature. Boycotts and loss of business due to SB1070 aside, Arizona was the laughing stock of the country with regular stories on The Daily Show, The Colbert Report, and Saturday Night Live. With SB1070, the birther bill, anchor babies, "Constitutional carry" gun laws, and Brewer's babbling about beheadings, we gave the satirists plenty of material.

What happens in 2011 to our quality of life and our children's future may not be easily parodied if Goddard loses. Here is a little food for thought from Random Musings:

The Republicans in the legislature are sharpening their meat cleavers and oiling their chain saws in gleeful anticipation of inflicting mortal wounds upon public education in Arizona during the next budget cycle.

"However, the presence of Terry Goddard in the governor's office will serve to mitigate the carnage.

"He and his veto pen will be there to force the anti-society extremists in the legislature to the negotiating table and force them to minimize the long-term damage.

"Of course, electing Terry Goddard only sets up a strong, but not impenetrable, defense to the worst of the lege's machinations...

"Electing more Democrats to the legislature, maybe even enough to tie or take control of one of the chambers, would go a LONG way toward stopping the R-led slaughter of Arizona's physical and societal infrastructures.

Today is the last day to register to vote in Arizona. If you haven't done so already, go to the Service Arizona website before midnight October 4, register your sorry ass, and vote on November 2.

Are Congressional Republicans myopic? Or just really bad at math?

Last week, the national Republican Party unveiled their Pledge to America. If you watched the brilliant Jon Stewart piece on this, you know that the much-ballyhoo'd Pledge is the Same Old Sh-- from the Grand Old Party (AKA, the Party of No Ideas): tax cuts for the rich (AKA, trickle down economics); elimination of "Obamacare" (AKA, pay-your-own-way health savings accounts); traditional values (AKA, we hope everyone has forgotten those gay sex scandals); control spending (AKA, we hope everyone has forgotten our deficit-spending binge under Bush II); reduce government (AKA, we hope everyone has forgotten those earmarks and bail-outs we voted for); support the troupes; stand by our friends; tort reform; yada, yada, yada.

There was much comparison in the media of the Pledge to America and the Contract with America, Newt Gingrich's document from the early 1990s when the Republicans took control of Congress. As Stewart so aptly pointed out, the Pledge to America is "not even a sequel [to the Contract with America], it's a shot-by-shot remake." He proceed to show clips of long-term Congressional Republicans like House Minority Leader John Boehner (above, courtesy of NPR) spouting the same ideas in 1994 - 2004 as they outlined last week in the Pledge.

The grand finale was Boehner 2010 side-by-side with Boehner of the past saying exactly the same words with the same emphasis and pacing. (How's that for living up to your stereotype of the Party of No Ideas?)

Fast forward one week...

Pundits are now analyzing and commenting on the content of the Pledge to America, and more data are being released about the dismal state of the economy. ("Drat, we thought we could get by with soundbites!" Boehner is overheard saying in Southern Ohio tanning spa.)

- The Economic Policy Institute released a report that says the Republicans' job creation plan (AKA, give more money to the rich) would result in the loss of 1.1 million jobs. (I guess they are the only ones who have not heard that giving money to the rich is the least effective way to stimulate the economy and jobs and that trickle down economics doesn't work.)

- The 2010 Census data revealed that the gap between rich and poor is widening (duh), and that poverty has increased in most states. (So, why have Republicans vote against extension of unemployment repeatedly? Why are they holding extension of the middle class tax cuts hostage? Why did they try to block Obama's jobs bill? Why do they want to eliminate the public safety nets of healthcare reform and Social Security? Why? Because all of these things are unfriendly to the corportists. They represent the multinational corporations of America-- not the people.)

- Robert Reich said on NPR that the middle class can't go any deeper into debt and can't work longer hours. They're doing everything they can to survive.

And besides all of this, their plan just doesn't add up. They want to repeal healthcare reform and make all of the Bush II's tax cuts (especially those for the ultra rich) permanent PLUS cut government and cut the deficit.

George Bush I called trickle down economics "voodoo economics" when he ran against Ronald Reagan for president. What the Republicans are proposing with the Pledge to America is "voodoo math". Healthcare reform and sunsetting Bush II's tax cuts on the richest Americans save us BILLIONS of dollars. If Congressional Republicans are allowed to accomplish these two goals, the US economy will be hurt even more. Also, decreasing the size of government means eliminating government jobs. On the NPR's Diane Rehm Show, one commentator said that even if the Republicans take government spending back to Reagan era levels + cut more, we would still be no where near a balanced budget.

The bottom line is: the Pledge to American is a hoax. Don't buy the lie.

Giffords stands with the middle class and fiscal responsibility

The Arizona Daily Star reported today that CD8 Congresswoman Gabrielle Giffords chose to stand with the middle class and fiscally responsible-- rather than caving in and going along with those who want to continue the budget-busting Bush tax cuts for the richest Americans.

Forty-seven House Democrats sent a letter to President Obama saying that they would support extension ofall of the Bush era tax cuts.

Obama has been promoting keeping the Bush tax cuts for people who make less than $250,000 but allowing the cuts to expire for the richest Americans.

Although the Republicans have been pushing the IDEA of fiscal responsibility (in order to win over the Tea Bagger vote), they also have been pushing hard to make all of the Bush tax cuts permanent, which add BILLIONS to the deficit.

This fall Republicans have been willing to let all of the tax cuts expire-- even cuts for the middle class-- if they can't get continued give-aways for their rich cronies. When will they give up on trickle down economics?

I am seriously disappointed that these DINOs wrote a letter of support for this fiscally irresponsible Republican plan, but I am proud of Giffords for not caving. Go, Gabby.

Arizona: the edge of civilization

Arizona is becoming less and less civilized everyday.

When this state had plenty tourist income for repeated tax cuts for the rich (courtesy of the Arizona Legislature's Republican majority) and modest services for the rest of us, it was a tolerable place to live. Now, I'm not so sure.

Once the housing bubble burst, construction jobs disappeared, and tourist revenues declined, Arizona's house-of-cards economy plunged. The result has been two-years of fiscal mismanagement by the Legislature and Republican Governor Jan Brewer. Heaven forbid that they would fix the inherent problems with the state's revenue streams. Instead, they went to work cutting the budget for education,healthcare for children and the poor, and other services, while offering more tax breaks for business and the richest residents and relinquishing federal matching funds.

In addition, the Republicans voted to waste tax payer funds on hiring an independent lawyer to sue the federal government over healthcare reform and wasted time on a birther bill that would require everyone to show a birth certificate to run for office in Arizona.

The latest jewel in the crown of the 2010 session of the Arizona Legislature is Senator Russell Pearce's ant-immigrant bill (SB1070). Bouyed by anti-immigrant propaganda and false statements (dare I say "lies"?) by Pearce, the bill has passed both houses on a party line vote-- with Republicans pandering to the extreme fringe of their party.

SB1070 is a scary expansion of police powers in Arizona. Basically, during any "lawful contact" (ie, running a red light) any law enforcement officer can ask anyone for an ID to see if you are in the US legally. If you don't have an ID, you are "presumed to be an alien."

Will the governor sign the bill? Brewer has vowed to "do the right thing" without saying what that is.

Arizona is fast becoming an impoverished police state with minimal government and no services-- including basic public education. If these fascist policies and budget cuts continue, Arizona will see a brain drain, with the best and the brightest moving to more progressive states. Our universities and businesses will have a difficult time attracting professors, researchers, and skilled workers-- further hurting Arizona's economy. Those left in Arizona will be "clinging to their guns and religion" -- and trickle down economics.

If you don't like the direction of Arizona government, vote in the fall.

This article was originally published in my Progressive Examiner column. Check out the link to see the video of State Senator Kyrsten Sinema scold the Republican-controlled Legislature for passing poor policies, such as the birther bill.

I.O.U.S.A.: a case for fiscally responsible government

Pontificating about the national debt and fiscal responsibility is popular campaign rhetoric, but politicians haven't done anything significant to reduce the national debt since President Bill Clinton was in office.

In fact, under President George W. Bush, Clinton's $127 billion surplus was transformed into a record $455 billion deficit-- through repeated tax cuts for the wealthy, military imperialism, and adherence to the failed theory of trickle down economics. Now the debt is in the trillions of dollars--and increasing every minute.
As we approach a new year with cautious hope, many Americans are glad to see 2009 end. With skyrocketing unemployment and home foreclosures, failing local businesses, and bankrupt state and local governments, it has been a rough year and a half since the economic crash of 2008.

Watching I.O.U.S.A. One Nation. Under Stress. In Debt on New Year's Day was a chilling experience. The movie offers a learned but understandable look at the current national debt, how we are dealing with it (or not), and what the country has done in the past to pay off debt. For a thorough recap and independent review of the movie, check out this link.

In a nutshell, the premise of the movie is that the US actually has four deficits:

1- The federal budget deficit-- The national debt is $12 trillion and counting;

2- The savings deficit-- we are a country of consumers, not savers;

3- The trade deficit-- we buy more from other countries than they buy from us; and

4- The leadership deficit-- our politicians are more interested in getting re-elected, than making tough choices. The leadership deficit is glaringly apparent in Arizona, where the Republican governor and Republican-controlled legislature nip away at the multi-billion-dollar budget while avoiding tough choices and refusing to listen to ideas put forth by the legislative Democrats.

I would two more deficits to this list:

5- The education deficit-- It was shocking how many people in the movie could not define the word "deficit". This is a symptom of our failed educational system, which is only going to get worse in bankrupt states like Arizona. Public education in the US is in a downward spiral, and no one is acting upon this. After all an uneducated populace will not question those in power. If you can't even define "deficit," you're not likely to ask for accountability from the leaders who are running it up. We are shortchanging future generations by allowing this to continue.

6- The media deficit-- With the demise of local newspapers and the rise of television entertainment news, the media in the US is in a shambles. Our best hope for real news-- not controlled by corporate press releases-- is citizen journalism.

When the continuation of the war in Iraq, escalation of the war in Afghanistan, multiple stimulus packages and corporate give-aways, and potential healthcare reform are added to our current fiscal obligations and the impending financial doom with the government starts paying Social Security benefits to millions of retiring Baby Boomers, the scenario is mind-boggling. For years, US taxpayers have been paying more into Social Security than is being paid out to retirees. Within the next 10 years, as more Baby Boomers retire, Social Security will be obligated to pay out more than it takes in. This in itself is a problem, but the US government has been borrowing against the Social Security surplus for years. No more surplus = no more borrowing = an even higher budget deficit.

Where do we go from here?

- Americans have to be willing to make tough economic choices. Thanks to Ronald Reagan, Newt Gingrich, George W. Bush, and the ideologues at FOX News, many Americans believe we can have everything we want and not pay for it. Our credit card mentality has to change. The bill is coming due, and we have to figure out how to pay it.

- We absolutely have to hold our elected officials accountable. In many elections, there is a "throw-the-bums-out" sentiment. This can be good or bad. Yes, throwing the bums out can clean house, but it is not blanketly a good idea to vote for the challenger "just because". We should reward politicians who have the guts to make the tough choices for the collective good. (Except for President Barack Obama and some in his administration, I can't name too many politicians who are putting the public good in front of personal ambition.)

- It is unconscionable for us to spend, spend, spend and leave crippling debt, a crumbling infrastructure, and a devastated educational system to our children and grandchildren.

- What can you do personally? Get involved in your local community and local government. Register and vote. Educate yourself about candidates and issues. Talk with friends and family. An educated and informed electorate is the key to change. Check out the I.O.U.S.A. trailer as a first step.

- Release yourself from debt. Pay off your credit cards, cut them up, and close the accounts. Don't buy things you can't afford. Save money. Make a plan to become financially independent.

This article originally appeared in my Progressive Examiner column.

Unemployed in Arizona: State suffers largest job losses

The US economy has lost hundreds of thousands of jobs in the past year. Businesses of all sizes have closed their doors. In Tucson, signs of the recession are everywhere; empty auto dealership lots, vacant storefronts, and going-out-of-business signs abound.

One of the most telling signs of Arizona's weak economy is reflected in the job loss statistics. According to statistics released by the Economic Policy Institute, Arizona has lost the highest proportion of jobs in the US. Other states have lost more jobs, but their losses constitute a smaller percentage of their state's total economy.

As reported in the East Valley Tribune, Arizona has lost 9.9% of its jobs or 265,000. Most of the job loss has been in construction, which is down by 45%. These figures clearly reflect Arizona's dependence upon boom and bust cycles in the housing industry.

The statistics also reflect shortsightedness on the part of Arizona's political leaders--especially in state government. Rather than invest in education, job creation, and home-grown industries-- like solar power-- during boom times, the Republican-controlled state legislature offers tax cuts to businesses. In bust times, what do they do? They cut education (making Arizona less competitive in the long term). Cut social services. Cut financial support to cities. And cut anything else they can think of in order to avoid raising revenue. The thought of increasing revenue by relinquishing previous tax cuts is not even on their radar.

Last week, a Phoenix legislator was interviewed by John C. Scott, a Tucson radio talk show host. When asked about the state's financial crisis, including the job losses. His only suggestion was to offer further tax cuts to business--particularly homebuilders and developers to incentivize them to build more homes, which will create some construction jobs-- at least temporarily. (Scott should have asked who was going to buy these houses with so many Arizonans out of work.)

The myopia in the state legislature is frightening. The Republican ideologues continue to cling to Reaganomics. The trickle down theory-- giving tax cuts to the wealthy and thus incentivizing them to invest and create jobs-- has proven to be a failed economic policy. George Bush the First was right when he called it "voodoo economics." When will the Arizona legislature wake up?