On HuffPo:

In an interview with Jon Stewart on Comedy Central's The Daily Show Tuesday evening, Vice President Joe Biden acknowledged the anger and frustration many taxpayers feel over the way financial institutions seem to have favored status in Washington D.C.

Pointing to the hundreds of billions of government dollars that have been spent to keep banks from failing, he recalled a "great expression" of his grandfather, Ambrose Finnegan: "It's socialism for the rich and capitalism for the poor," Biden said...

But what is going on here? Is this a case of "good cop/bad cop"? Obama, the bad cop for liberals; Biden, the good cop? Or is it this: Obama is truly limited by his insane critics on the far right who consistently call him a socialist and a Nazi. Because the such criticisms have a racial core, if he made a comment like the one Biden made on Stewart's show, he would face a flood and thunderstorm of insults. And here we can see something like the source of the problem. Obama does not want to be known as a black president but as an American president, and so he is forced to avoid the kind of language ("socialism for the rich") that would certainly excite criticisms that seem to be about his political philosophy and practices but are, as everyone can see at the end of the day, really about the color of his skin. That reading of things may not be far from the truth.

And we're getting there, slowly but surely.

It sounds like a bad Letterman joke: "The U.S. economy is so bad, Mexican immigrants aren't wiring dollars south—their families are wiring pesos north."

Except it's true.

Good economy = more immigration, bad economy = less immigration. Law enforcement has almost nothing to do with it. Facts is facts.

But have fun with your immigrant-sweep circus, Sheriff Joe. You've already been exposed as a clown.

Amnesty is for the rich:

Nov. 17 (Bloomberg) — More than 14,700 Americans voluntarily disclosed secret offshore bank accounts to the Internal Revenue Service during a partial amnesty program that ended Oct. 15, Commissioner Doug Shulman said.

“We were flooded with people coming in during the final days of the program,” Shulman told reporters on a conference call in Washington today as the U.S. and Swiss governments released a list of criteria used by Switzerland to screen American clients of UBS AG bank for tax fraud.

From the Guardian:

A United Nations special investigator who was blocked from visiting the US by the Bush administration has accused the American government of pouring billions of dollars into rescuing banks and big business while treating as "invisible" a deepening homeless crisis.

Funny that W. was blocking a UN investigator—I guess he knew she was going to break the bad news. For example:

Los Angeles, which is described as the homeless capital of America, has endured an 18-fold increase in housing foreclosures. Evictions from owned and rented homes have risen about tenfold, with 62,400 people forced out last year in Los Angeles county.

Welfare payments are not enough to meet the rent, let alone food and other necessities. A single person on welfare living in Los Angeles receives $221 (£133) a month — an amount that hasn't changed in a decade. The rent for one room is typically nearly double that.

The US state department has one month to respond. What could they possibly say? "Sorry"?

Fools and their money:

These so-called virtual goods, like a $1 illustration of a Champagne bottle on Facebook or the $2.50 Halloween costume in the online game Sorority Life, are no more than a collection of pixels on a Web page. But it is quickly becoming commonplace for people to spend a few dollars on them to get ahead in an online game or to give a friend a gift on a social network.

Analysts estimate that virtual goods could bring in a billion dollars in the United States and around $5 billion worldwide this year.

...But will not be done on this side of the Atlantic:

LONDON — The British government is moving to break up parts of major financial institutions bailed out by taxpayers, with a restructuring plan expected to be unveiled as soon as Tuesday. The move highlights a growing divide across the Atlantic over how to deal with the massive banks partially nationalized during the height of the financial crisis.

It really comes down to neoliberalism for the poor and socialism for the rich:

...Otis Rawl, chief executive of the South Carolina Chamber of Commerce, said in an interview Tuesday. "That came from the entity that's looking at the state. It's the number they anticipate creating."

Rawl said the incentives "go beyond what's normally offered."

"We hope that we create an environment where they want to be here for more than what we've talked about," Rawl said.

"We're doing everything we can to be in the game," he said. "We're putting $170 million on the table."

That's just the upfront money for infrastructure, buildings, equipment and training.

Other significant tax breaks mean Boeing won't have to pay sales tax on computer equipment, on building construction materials or on the aviation fuel it uses in test flights and aircraft delivery flights.

Under another provision, it will have virtually no corporate income-tax liability in the state for five years.

One part of the local economic picture:

Among the dignitaries speaking at Wednesday's ceremonial opening of the new Google campus in Kirkland was the guy who first approved the company's engineering office in the Seattle area.

Alan Eustace, Google senior vice president of engineering and research, said it began five years ago when three smart and persuasive people applied at once to work at Google and they wanted to work in the area.

Another part of that picture:

Kight said the goal is to have the new facility in Charleston up and running by 2011, with the first airplane rolling out in 2012.

Boeing will also paint, flight test and deliver the airplanes from there.

For the first two to three years of 787 production, Kight said, there will be a surge of production in Everett to ensure the successful introduction of the 787-9, the first derivative model of the 787 after the initial 787-8.

After that, he said, the production surge in Everett will be phased out and moved to Charleston.

The order of the our economic galaxy: Tacoma has a military base; Bellevue's base is information technologies; Seattle, the core of the galaxy, has a health and education base; Everett has its base in aircraft production. What will be the fate of Everett? The Detroit of the future? Everything now depends on the success or failure of airplane production (which is not the same as automobile production) in a neoliberal environment. Meaning, can reliable airplanes be made in conditions that are unfavorable to workers? We will find out soon enough.

Seriously, in report after report, this confrontation has not been arranged in this way: management's ruthlessness and labor's bravery; but in this way: labor's foolishness and management's reasonableness.

Discussions between the Machinists union and Boeing over the second 787 production line for Everett are effectively dead, according to a person familiar with the negotiations.

Boeing now appears close to choosing Charleston, S.C., as the location of the second line. The person close to the negotiations said an announcement could come within days.

Boeing management has turned down further talks over the potential 10-year no-strike agreement the company had sought, the person said.

"The union wants to continue talking," said this source, who is not aligned with the union. "The Boeing Co. does not want to talk any further.

"The company is fairly close to being done, if not done already," the person said.

The person close to the talks between the union and the company said hope is fading fast for Washington state.

"The sun is certainly setting," he said.

News from Germany:

German Chancellor Angela Merkel's conservatives have sealed a coalition deal with the Free Democrats (FDP) based on major tax cut plans.

The deal between the CDU/CSU and the pro-business FDP paves the way for the coalition to take office next week.

Income taxes will be slashed by 24bn euros ($36bn, £22bn) starting in 2011, according to the coalition agreement.

The parties agreed to unite after the September general election in which the FDP achieved its best-ever result.

News from America:

We are entering the billionaire bailout society.

For the past thirty years we have minted billionaires, and we have created the most unequal distribution of wealth since 1928-29. This didn't happen by accident. We deliberately deregulated the financial sector and we deliberately eliminated the steep progressive taxes on the super-rich that had kept in check our income distribution.

By unleashing capital and finance we were supposed to get an enormous investment boom in real goods and services. Instead we got a fantasy finance boom as Wall Street marketed derivatives to those with excess capital.

We also got the biggest crash since the Great Depression.

Perhaps the most dramatic measure of our emerging billionaire bailout society is seen by comparing compensation for the top 100 CEOs and to that of average workers (the 100 million or so non-supervisory production workers). In 1970 the ratio was 45 to 1. By 2006 it was 1,723 to one.

For those who do not know what neoliberalism, an explanation from my favorite economist Ha-Joon Chang:

Naked Capitalism has a wonderful breakdown of yesterday's NYT article on the Lehman brothers collapse. (The collapse of Lehman brothers brought the dromedary to its knees, precipitating the present economic crisis.)

Witness the evisceration of some of the core myths of conservative economic theory.

The God-like CEO, shown to an utter and irresponsible fool:

Fuld [Lehman CEO] (and presumably the underlying business) was desperate as of early July. Sorkin has Fuld arranging for contacts to be made to possible buyers like Bank of America on a Saturday. Huh? He was clearly flailing about, yet not offering a price or deal terms commensurate with his obviously panicked state....

What the hell was Fuld doing trying to negotiate his own deals? This is a mistake CEOs make all the time, and it never ceases to amaze me.

Now why is it a bad idea for a CEO or for most principals to negotiate their own deals? Most people are terrible negotiators. And I have to tell you, most people in M&A are not as good as they think they are. They don’t really negotiate all that much. They structure deals, value them, sell, but a lot of the negotiating takes place through the lawyers (many of the key points are negotiated in the negotiations over reps and warranties and the details of the definitive agreement). Most M&A transactions do not have that much negotiating, relative to all the other stuff that goes on in a deal, for most professionals to get that much practice.

But CEOs on average are FAR less practiced at negotiating, and Fuld is by temperament and experience particularly poorly suited for that role. He comes out of commercial paper (which is a very simple “placement” business; negotiating was never a skill he had to develop), he was known for being hyper aggressive and surrounding himself with yes men; he’d have even less give and take on a daily basis than most top executives.

Laissez-faire management of the economy—in which regulators sit idly, despite obvious and desperate signs that intervention was required—is the kindling of the fire:

If Geithner and his colleagues didn’t get that Fuld was at the end of his rope, they were choosing to ignore an elephant in the room. Now they may have been completely unwilling to consider the petition and this was the easiest way to signal their opposition (taking Fuld through a long list of requirements, some of which presumably would have been pretty painful, was another message).

But this speaks to a question we have raised again and again: why was there no serious assessment of what a Lehman bankruptcy would mean? After Bear went down, everyone knew Lehman was next on the list, with Merrill and UBS also known to be wobbly. Why didn’t the Fed, Treasury, and SEC together demand certain types of information from all big US regulated capital markets players (including JP Morgan and Goldman, perceived to be the healthiest, so as not to be singling out the weaker members of the herd?). This is a massive oversight. Relying on luck, which is what assuming all would be well after the Bear debacle, is no substitute for having a strategy. There was clear urgency in July. Even a month of assessment and evaluation of options (it probably would have taken two weeks to orchestrate the information requests among the agencies) would have been better than nothing.

Yves is sharp. You should read and consider the full post.

Here we go again:

Dow nears 10,000
The Dow industrials surged at the open, nearly crossing 10,000 for the first time in a year, fueled by upbeat results from finance firm JPMorgan Chase and chipmaker Intel, and weak September retail sales that still beat forecasts. CNNMoney reports the Dow is within spitting distance of 10,000 — a level not seen since October 3, 2008, when it reached 10,124 during the trading session. full story

The poor die sweatshops; the rich die in sweatboxes:

(CNN) — Two people died and another 19 were injured at a central Arizona resort after spending up to two hours in a "sweatbox," authorities said Friday.

About 50 people had spent up to two hours inside the "sweatbox," a dome-like structure covered with tarps and blankets, according to the Yavapai County Sheriff's Office.

CNN affiliate KPHO in Phoenix reported that the illnesses occurred during a ceremony led by James Arthur Ray, author of the best-selling book "Harmonic Wealth: The Secret of Attracting the Life You Want."

Ray, described on his Web site as a "personal success strategist," has appeared on CNN's "Larry King Live" and on the "Oprah Winfrey Show," and is featured in the self-empowerment film "The Secret."

Neither Ray nor his representatives could be reached Saturday to comment.

Angel Valley Resort advertises itself as "a place to relax and heal ... where powerful earth energies are present and active." It was founded in April 2002 by Michael and Amayra Hamilton, both of whom are teachers and counselors there.

The resort is on 70 secluded valley acres 20 minutes from Sedona, surrounded by thousands of acres of national forest, according to the Web site. It has Internal Revenue Service nonprofit status as a religious organization, its Web site says.

"There are twenty marked vortexes and angel sites to experience connection with Earth and spirit, deep relaxation, and balancing," an online brochure says. "Angel Valley offers two labyrinths and an Angel Wheel for going inward, finding answers and getting insights.

America's new capital? Flint, Michigan:

NEW YORK (CNNMoney.com) — Employers cut more jobs from their payrolls in September and the unemployment rate hit another 26-year high, as the long-battered U.S. labor market took an unexpected turn for the worse, according to a government report Friday.

The Labor Department said there was a net loss of 263,000 jobs in the month, up from a revised loss of 201,000 jobs in August. Economists surveyed by Briefing.com had forecast losses would fall to 175,000 jobs.

From my review of Micheal Moore's new documentary, Capitalism: A Love Story:

The people in Roger & Me... were in a much better situation than the people in Capitalism. The residents of Flint could still go somewhere else, still rent a U-Haul truck and move to a place where the job market was booming. In Capitalism, you can't move to a better place because everywhere else is the same as where you are; everywhere jobs are disappearing and the poor and middle class are being viciously dispossessed of the little that they own. There is even a moment in Capitalism, the most important moment, when Moore discovers that a man being evicted from his rural home received the eviction notice from a company that's based in Flint! The dead city is literally turning the living into zombies.

The car that was, won't be.

[T]he rural meltdown has been the hollowing out—that is, losing the most talented young people at precisely the same time that changes in farming and industry have transformed the landscape for those who stay. This so-called rural "brain drain" isn't a new phenomenon, but by the 21st century the shortage of young people has reached a tipping point, and its consequences are more severe now than ever before. Simply put, many small towns are mere years away from extinction, while others limp along in a weakened and disabled state.

In just over two decades, more than 700 rural counties, from the Plains to the Texas Panhandle through to Appalachia, lost 10 percent or more of their population. Nationally, there are more deaths than births in one of two rural counties. Though the hollowing-out process feeds off the recession, the problem predates, and indeed, presaged many of the nation's current economic woes...

These rural people, by the way, vote Republican and are deeply xenophobic. Yet the solutions to their big problem, their meltdown, are found in adopting values that stand on the left side of the political spectrum.

For example, one solution:

[S]mall towns should seek to embrace immigration whenever possible. The phenomenon of Hispanic boomtowns, a common occurrence in the Midwest, has the potential to transform moribund local economies. Such transformations will be possible only if there is careful planning to ensure that immigrants are integrated into the community in such as way as to increase contact between natives and immigrants and with attendant labor-law reform that curbs abuses and ensures sufficient wages and benefits for workers in agribusiness and manufacturing. Ph.D.'s from India or China and less-skilled immigrants from Mexico or Central America should all be recruited and supported in an effort to make the heartland an immigrant enterprise zone. The region is in critical need of professional-class workers, and bringing in Hispanic workers for the food industry will not be enough to rejuvenate the region.

Another solution:

Alongside the green economy, we should rethink how we produce food in America. Michael Pollan has argued persuasively that now is the time to provide incentives for polycultural farming that will diversify the food produced in the Corn Belt, reduce the use of artificial fertilizers, and increase the availability of organic and locally grown meat and produce. Though it is a daunting prospect to try to loosen the agribusiness stranglehold, reinventing the food industry offers a chance to bring people back onto the land.

And another solution:

[An] area for national action is in the reshaping of postsecondary education to better meet the challenges of globalization and the postindustrial economy. Based on the experiences of the stayers and many of the returners we spoke with, we see a need to provide training in the fields and specialties most sought after, and community colleges will be key in that regard. Already, President Obama has recognized the crucial role community colleges can play when in July he introduced the American Graduation Initiative, which will commit over $12-billion in funding to provide scholarships for students, modernize colleges, and build links with other schools and businesses.

In short, small towns need a revolution in values. The old values, the values of the Value Voters, are killing their way of life.

The article concludes:

The residents of rural America must embrace the fact that to survive, the world they knew and cherished must change. And, on a national level, rural development must be more closely linked to national economic growth priorities, and policies must be created to help these communities prepare for a future that is already here.

The image is by Kyle Simourd.

Also, people in automobiles sometimes become really interested in you and offer you employment. This does not happen too infrequently. I should say that I average about one offer every three days. I have been a gardener, a waiter, a gravedigger, a fisherman, a lumberman, a farm hand, a clerk, a newspaper reporter, a ghost-writer, a chauffeur, a toy salesman, and garbageman. I never keep these jobs long because I am over-fond of the road, and after a week in one place I long to be on an open truck again, watching houses slip by and the land change.

Now that the economy is down again, I hope some people are out having a good time like this. It sounds like fun.

Seattle Times, 2009:

Tacoma, with state support, already had offered the global financial-services company $148 million in tax breaks and other incentives to stay. But Russell's leaders didn't want to talk money.

"They wanted to know, 'Does Seattle play on a global stage?' " Kate Joncas, president of the Seattle business group, recalled Wednesday. " 'Is Seattle competitive in getting the best talent from around the world?' "

Russell must have liked the CEOs' answers.

The company announced Wednesday that, after 73 years in Tacoma, it will move its headquarters and 900 employees by the end of next year into the 42-story tower known until recently as the WaMu Center.

Seattle PI, 2001:

Chairman Phil Condit and other company officials left Seattle's Boeing Field for Chicago about 8 this morning by corporate jet. Once there, they formally announced that Boeing's new headquarters will be at the 100 N. Riverside Plaza office building along the Chicago River.

Condit said there was no single deciding factor, but cited the "ability to get anywhere in the world'' easily from Chicago.

``We are here not because we wanted to leave Seattle, but because we wanted to build a bigger, more capable Boeing Co.,'' he said. "We believe that having our world headquarters separate from any one of our major businesses will help us to achieve our goals of growing this company.''

Boeing immediately becomes Illinois' biggest company, its $51.3 billion in 2000 revenues ranking it ahead of Sears, Motorola, McDonald's and United Airlines.

The state of things simply stated: "Banks aren't extending credit and consumers don't want it anyway."

(McClatchy)One year after the near collapse of the global financial system, this much is clear: The financial world as we knew it is over, and something new is rising from its ashes. Historians will look to September 2008 as a watershed for the U.S. economy.

(NYT) Total consumer credit is declining at the fastest rate since World War II. Revolving credit is falling at the fastest rate since counting began in 1968.

Given how overextended many people were, this should be viewed as good news, at least over the long run.

According to AP, the Cash for Clunkers rebate program generated almost 700,000 sales. But the more profound (if not disturbing—disturbing for Detroit) piece of information is the top ten list of cars that were junked. All are American. On the other hand, the top ten list of cars that were bought, only two are American—Ford Focus and Ford Escape. American automakers have been here before. There were here 30 years ago. When will they learn?

The Prius is seven on the top-selling list.