Robert B. Reich's Blog, page 150

The Truth About the Economy: We're Heading Back Toward a Double Dip

Why aren't Americans being told the truth about the economy? We're heading in the direction of a double dip – but you'd never know it if you listened to the upbeat messages coming out of Wall Street and Washington.

Consumers are 70 percent of the American economy, and consumer confidence is plummeting. It's weaker today on average than at the lowest point of the Great Recession.

The Reuters/University of Michigan survey shows a 10 point decline in March – the tenth largest drop on record. Part of that drop is attributable to rising fuel and food prices. A separate Conference Board's index of consumer confidence, just released, shows consumer confidence at a five-month low — and a large part is due to expectations of fewer jobs and lower wages in the months ahead.

Pessimistic consumers buy less. And fewer sales spells economic trouble ahead.

What about the 192,000 jobs added in February? (We'll know more Friday about how many jobs were added in March.) It's peanuts compared to what's needed. Remember, 125,000 new jobs are necessary just to keep up with a growing number of Americans eligible for employment. And the nation has lost so many jobs over the last three years that even at a rate of 200,000 a month we wouldn't get back to 6 percent unemployment until 2016.

But isn't the economy growing again – by an estimated 2.5 to 2.9 percent this year? Yes, but that's even less than peanuts. The deeper the economic hole, the faster the growth needed to get back on track. By this point in the so-called recovery we'd expect growth of 4 to 6 percent.

Consider that back in 1934, when it was emerging from the deepest hole of the Great Depression, the economy grew 7.7 percent. The next year it grew over 8 percent. In 1936 it grew a whopping 14.1 percent.

Add two other ominous signs: Real hourly wages continue to fall, and housing prices continue to drop. Hourly wages are falling because with unemployment so high, most people have no bargaining power and will take whatever they can get. Housing is dropping because of the ever-larger number of homes people have walked away from because they can't pay their mortgages. But because homes the biggest asset most Americans own, as home prices drop most Americans feel even poorer.

There's no possibility government will make up for the coming shortfall in consumer spending. To the contrary, government is worsening the situation. State and local governments are slashing their budgets by roughly $110 billion this year. The federal stimulus is ending, and the federal government will end up cutting some $30 billion from this year's budget.

In other words: Watch out. We may avoid a double dip but the economy is slowing ominously, and the booster rockets are disappearing.

So why aren't we getting the truth about the economy? For one thing, Wall Street is buoyant – and most financial news you hear comes from the Street. Wall Street profits soared to $426.5 billion last quarter, according to the Commerce Department. (That gain more than offset a drop in the profits of non-financial domestic companies.) Anyone who believes the Dodd-Frank financial reform bill put a stop to the Street's creativity hasn't been watching.

To the extent non-financial companies are doing well, they're making most of their money abroad. Since 1992, for example, G.E.'s offshore profits have risen $92 billion, from $15 billion (which is one reason it pays no U.S. taxes). In fact, the only group that's optimistic about the future are CEOs of big American companies. The Business Roundtable's economic outlook index, which surveys 142 CEOs, is now at its highest point since it began in 2002.

Washington, meanwhile, doesn't want to sound the economic alarm. The White House and most Democrats want Americans to believe the economy is on an upswing.

Republicans, for their part, worry that if they tell it like it is Americans will want government to do more rather than less. They'd rather not talk about jobs and wages, and put the focus instead on deficit reduction (or spread the lie that by reducing the deficit we'll get more jobs and higher wages).

I'm sorry to have to deliver the bad news, but it's better you know.

Why Governor LePage Can't Erase History, and Why We Need a Fighter in the White House

Maine Governor Paul LePage has ordered state workers to remove from the state labor department a 36-foot mural depicting the state's labor history. Among other things the mural illustrates the 1937 shoe mill strike in Auburn and Lewiston. It also features the iconic "Rosie the Riveter," who in real life worked at the Bath Iron Works. One panel shows my predecessor at the U.S. Department of Labor, Frances Perkins, who was buried in Newcastle, Maine.

The LePage Administration is also renaming conference rooms that had carried the names of historic leaders of American labor, as well as former Secretary Perkins.

The Governor's spokesman explains that the mural and the conference-room names were "not in keeping with the department's pro-business goals."

Are we still in America?

Frances Perkins was the first woman cabinet member in American history. She was also one of the most accomplished cabinet members in history.

She and her boss, Franklin D. Roosevelt, came to office at a time when average working people needed help – and Perkins and Roosevelt were determined to give it to them. Together, they created Social Security, unemployment insurance, the right of workers to unionize, the minimum wage, and the forty-hour workweek.

Big business and Wall Street thought Perkins and Roosevelt were not in keeping with pro-business goals. So they and their Republican puppets in Congress and in the states retaliated with a political assault on the New Deal.

Roosevelt did not flinch. In a speech in October 1936 he condemned "business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering."

Big business and Wall Street, he said,

had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me – and I welcome their hatred.

Fast forward 75 years.

Big business and Wall Street have emerged from the Great Recession with their pockets bulging. Profits and bonuses are as high as they were before the downturn. And they're spending like mad on lobbying and politics. After the Supreme Court's disgraceful Citizens United decision, there are no limits.  

Pro-business goals are breaking out all over. Governors across America are slashing corporate taxes as they slash state budgets. House and Senate Republicans are intent on deregulating, privatizing, and cutting spending and taxes so their corporate and Wall Street patrons will do even better.

But most Americans are still in desperate trouble. Few if any of the economic gains are trickling down.

That's why the current Republican assault on workers – on their right to form unions, on unemployment insurance and Social Security, on public employees, and even (courtesy of Governor LePage) on our common memory – is so despicable.

And it's why we need a President who will fight for workers and fight against this assault — just as Perkins and FDR did.

By the way, Maine's Governor LePage may be curious to know that the building housing the U.S. Department of Labor in Washington is named the "Frances Perkins Building." He can find her portrait hanging prominently inside. Also portraits and murals of great leaders of American labor.

A short walk across the mall will bring Governor LePage to an imposing memorial to Franklin D. Roosevelt, should the Governor wish to visit.

Governor, you might be able to erase some of Maine's memory, but you'll have a hard time erasing the nation's memory – even if it's not in keeping with your pro-business goals.

The Republicans' Big Lies About Jobs (And Why Obama Must Repudiate Them)

And if all others accepted the lie which the party imposed – if all records told the same tale – then the lie passed into history and became the truth.

– George Orwell, 1984 (published in 1949)

House Majority Leader Eric Cantor was in town yesterday (specifically, at Stanford's Hoover Institute where he could surround himself with sympathetic Republicans) to tell this whopper: "Cutting the federal deficit will create jobs."

It's not true. Cutting the deficit will create fewer jobs. Less government spending reduces overall demand. This is particularly worrisome when, as now, consumers and businesses are still holding back. Fewer government workers have paychecks to buy stuff from other Americans, some of whom in turn will lose their jobs without enough customers.

But truth doesn't seem to matter. Republicans figure if their big lies are repeated often enough, people will start to believe them.

Unless, that is, those big lies are repudiated – and big truths are told in their place.

What worries me almost as much as the Republican's repeated big lies about jobs is the silence of President Obama and Democratic leaders in the face of them. Obama has the bully pulpit. Republicans don't. But if he doesn't use it the Republican's big lies gain credibility.

Here are some other whoppers being repeated daily:

"Cutting taxes on the rich creates jobs." Nope. Trickle-down economics has been tried for thirty years and hasn't worked. After George W. Bush cut taxes on the rich, far fewer jobs were created than after Bill Clinton raised them in the 1990s.

To his credit, President Obama argued against Republican demands for extending the Bush tax cut for those making more than a quarter million. But as soon as Republicans pushed back he caved. And the President hasn't even mentioned that the $61 billion Republicans are demanding in budget cuts this fiscal year is what richer Americans would have paid in taxes had he not caved.

"Cutting corporate income taxes creates jobs." Baloney. American corporations don't need tax cuts. They're sitting on over $1.5 trillion of cash right now. They won't invest it in additional capacity or jobs because they don't see enough customers out there with enough money in their pockets to buy what the additional capacity would produce.

The President needs to point this out – not just in Washington but across the nation where Republican governors are slashing corporate taxes and simultaneously cutting school budgets. President Obama says he wants to invest in American skills, but many states are doing the opposite. Florida Governor Rick Scott, for example, says his proposed corporate tax cuts "will give Florida a competitive edge in attracting jobs." They'll also require education spending be reduced by $3 billion. Florida already ranks near the bottom in per-pupil spending and has one of nation's lowest graduation rates. If Scott's tax cuts create jobs, most will pay peanuts.

"Cuts in wages and benefits create jobs." Congressional Republicans and their state counterparts repeat this lie incessantly. It also lies behind corporate America's incessant demand for wage and benefit concessions – and corporate and state battles against unions. But it's dead wrong. Meager wages and benefits are reducing the spending power of tens of millions of American workers, which is prolonging the jobs recession.

President Obama and Democratic leaders should be standing up for the wages and benefits of ordinary Americans, standing up for unions, and decrying the lie that wage and benefit concessions are necessary to create jobs. The President should be traveling to the Midwest – taking aim at Republican governors in the heartland who are hell bent on destroying the purchasing power of American workers. But he's doing nothing of the sort.

"Regulations kill jobs." Congressional Republicans are using this whopper to justify their attempts to defund regulatory agencies. Regulations whose costs to business exceed their benefits to the public are unwarranted, of course, but reasonable regulation is necessary to avoid everything from nuclear meltdowns to oil spills to mine disasters to food contamination – all of which we've sadly witnessed. Here again, we're hearing little from the President or Democratic leaders.

Look, the President can't be everywhere, doing everything. There's tumult in the Middle East, we're suddenly at war in Libya, Japan is struggling with the aftermath of disaster, and surely Latin America is an important trading partner.

But nothing is more central to average Americans than jobs and wages. Unless the President forcefully rebuts Republican's big lies, they'll soon become conventional wisdom.

The Republican's Big Lies About Jobs (And Why Obama Must Repudiate Them)

And if all others accepted the lie which the party imposed – if all records told the same tale – then the lie passed into history and became the truth.

– George Orwell, 1984 (published in 1949)

House Majority Leader Eric Cantor was in town yesterday (specifically, at Stanford's Hoover Institute where he could surround himself with sympathetic Republicans) to tell this whopper: "Cutting the federal deficit will create jobs."

It's not true. Cutting the deficit will creates fewer jobs. Less government spending reduces overall demand. This is particularly worrisome when, as now, consumers and businesses are still holding back. Fewer government workers have paychecks to buy stuff from other Americans, some of whom in turn will lose their jobs without enough customers.

But truth doesn't seem to matter. Republicans figure if their big lies are repeated often enough, people will start to believe them.

Unless, that is, those big lies are repudiated – and big truths are told in their place.

What worries me almost as much as the Republican's repeated big lies about jobs is the silence of President Obama and Democratic leaders in the face of them. Obama has the bully pulpit. Republicans don't. But if he doesn't use it the Republican's big lies gain credibility.

Here are some other whoppers being repeated daily:

"Cutting taxes on the rich creates jobs." Nope. Trickle-down economics has been tried for thirty years and hasn't worked. After George W. Bush cut taxes on the rich, far fewer jobs were created than after Bill Clinton raised them in the 1990s.

To his credit, President Obama argued against Republican demands for extending the Bush tax credit on those making more than a quarter million. But as soon as Republicans pushed back he caved. And the President hasn't even mentioned that the $61 billion Republicans are demanding in budget cuts this fiscal year is what richer Americans would have paid in taxes had he not caved.

"Cutting corporate income taxes creates jobs." Baloney. American corporations don't need tax cuts. They're sitting on over $1.5 trillion of cash right now. They won't invest it in additional capacity or jobs because they don't see enough customers out there with enough money in their pockets to buy what the additional capacity would produce.

The President needs to point this out – not just in Washington but across the nation where Republican governors are slashing corporate taxes and simultaneously cutting school budgets. President Obama says he wants to invest in American skills, but many states are doing the opposite. Florida Governor Rick Scott, for example, says his proposed corporate tax cuts "will give Florida a competitive edge in attracting jobs." They'll also require education spending be reduced by $3 billion. Florida already ranks near the bottom in per-pupil spending and has one of nation's lowest graduation rates. If Scott's tax cuts create jobs, most will pay peanuts.

"Cuts in wages and benefits create jobs." Congressional Republicans and their state counterparts repeat this lie incessantly. It also lies behind corporate America's incessant demand for wage and benefit concessions – and corporate and state battles against unions. But it's dead wrong. Meager wages and benefits are reducing the spending power of tens of millions of American workers, which is prolonging the jobs recession.

President Obama and Democratic leaders should be standing up for the wages and benefits of ordinary Americans, standing up for unions, and decrying the lie that wage and benefit concessions are necessary to create jobs. The President should be traveling to the Midwest – taking aim at Republican governors in the heartland who are hell bent on destroying the purchasing power of American workers. But he's doing nothing of the sort.

"Regulations kill jobs." Congressional Republicans are using this whopper to justify their attempts to defund regulatory agencies. Regulations whose costs to business exceed their benefits to the public are unwarranted, of course, but reasonable regulation is necessary to avoid everything from nuclear meltdowns to oil spills to mine disasters to food contamination – all of which we've sadly witnessed. Here again, we're hearing little from the President or Democratic leaders.

Look, the President can't be everywhere, doing everything. There's tumult in the Middle East, we're suddenly at war in Libya, Japan is struggling with the aftermath of disaster, and surely Latin America is an important trading partner.

But nothing is more central to average Americans than jobs and wages. Unless the President forcefully rebuts Republican's big lies, they'll soon become conventional wisdom.

As the Global Economy Trembles, Our Nation's Capital Fiddles

Why isn't Washington responding?

The world's third largest economy suffers a giant earthquake, tsunami, and radiation dangers. A civil war in Libya and tumult in the Middle East cause crude-oil prices to climb. Poor harvests around the world make food prices soar.

All this means higher prices. American consumers, still reeling from job losses and wage cuts, will be hit hard. (Wholesale food prices surged almost 4 percent in February, the largest upward spike in more than a quarter century.)

Even before these global shocks the U.S. recovery was fragile. Consumer confidence is at a five-month low. Housing prices continue to drop. More than 14 million Americans remain jobless, and the ratio of employed to our total population is at an almost unprecedented low.

So you might think our elected representatives would want to avoid a repeat of what happened the second half of 2010 when the fragile recovery began tanking. They'd certainly want to prevent a double-dip recession.  

You'd think they'd be creating booster rockets to counter these recessionary forces – freeing up more spending, exempting the first $20,000 of income from payroll taxes, imposing a moratorium on bank foreclosures, giving Americans another six months to file their income taxes, lending states whatever money they need to prevent more of their own budget cuts.

Think again.

Amazingly, the big debate in Washington is about how whether to cut $10 billion or $61 billion from the federal budget between now and September 30.

House Majority Leader Eric Cantor recently stated the Republican view succinctly: "Less government spending equals more private sector jobs."

In the past I've often wondered whether they're knaves or fools. Now I'm sure. Republicans wouldn't mind a double-dip recession between now and Election Day 2012.

They figure it's the one sure way to unseat Obama. They know that when the economy is heading downward, voters always fire the boss. Call them knaves.

What about the Democrats? Most know how fragile the economy is but they're afraid to say it because the White House wants to paint a more positive picture.

And most of them are afraid of calling for what must be done because it runs so counter to the dominant deficit-cutting theme in our nation's capital that they fear being marginalized. So they're reduced to mumbling "don't cut so much." Call them fools.

The U.S. economy is flirting with another dip at a time when the global economy is teetering and most Americans are still in economic trouble. But nothing is being done in our nation's capital because knaves and fools are in charge.

Safety on the Cheap

Can we please agree that in the real world corporations exist for one purpose, and one purpose only — to make as much money as possible, which means cutting costs as much as possible?

The New York Times reports that G.E. marketed the Mark 1 boiling water reactors, used in TEPCO's Fukushima Daiichi plant, as cheaper to build than other reactors because they used a comparatively smaller and less expensive containment structure.

Yet American safety officials have long thought the smaller design more vulnerable to explosion and rupture in emergencies than competing designs. (By the way, the same design is used in 23 American nuclear reactors at 16 plants.)

In the mid-1980s, Harold Denton, then an official with the Nuclear Regulatory Commission, said Mark 1 reactors had a 90 percent probability of bursting should the fuel rods overheat and melt in an accident. A follow-up report from a study group convened by the Commission concluded that "Mark 1 failure within the first few hours following core melt would appear rather likely."

Sound familiar?

The National Commission appointed to investigate the giant oil spill in the Gulf of Mexico last April recently concluded that BP failed to adequately supervise Halliburton Company's work on installing the well.

This was the case even though BP knew Halliburton lacked experience testing cement to prevent blowouts and hadn't performed adequately before on a similar job. In short: Neither company bothered to spend the money to ensure adequate testing of the cement.

Nor did Massey Energy spend the money needed to ensure its mines were safe.

And so on.

Don't get me wrong. No company can be expected to build a nuclear reactor, an oil well, a coal mine, or anything else that's one hundred percent safe under all circumstances. The costs would be prohibitive. It's unreasonable to expect corporations to totally guard against small chances of every potential accident.

Inevitably there's a tradeoff. Reasonable precaution means spending as much on safety as the probability of a particular disaster occurring, multiplied by its likely harm to human beings and the environment if it does occur.

Here's the problem. Profit-making corporations have every incentive to underestimate these probabilities and lowball the likely harms.

This is why it's necessary to have such things as government regulators, why regulators must be independent of the industries they regulate, and why regulators need enough resources to enforce the regulations.

It's also why the public in every nation is endangered if the political clout of its biggest corporations — BP, Halliburton, Massey, G.E., or TEPCO — grows too large.  

Why Obama Isn't Fighting the Budget Battle

In the next week the action moves from Wisconsin to Washington, where the deadline looms for a possible government shutdown over the federal budget. President Obama has to take a more direct and personal role in that budget battle  – both for the economy's sake and for the sake of his reelection. But will he? Don't count on it.

Worried congressional Democrats say the President needs to use his bully pulpit to counter defections in Democatic ranks, such as the ten Democrats and one allied Independent who on Wednesday voted against a Senate leadership plan to cut $6.2 billion from the federal budget over the rest of fiscal year 2011. They want Obama to grab the initiative and push a plan to eliminate tax breaks for oil companies and for companies that move manufacturing facilities out of the country, and a proposal for a surtax on millionaires.

Most importantly, they're worried the President's absence from the debate will result in Republicans winning large budget cuts for the remainder of the fiscal year – large enough to imperil the fragile recovery.

But Obama won't actively fight the budget battle if the current White House view of how he wins in 2012 continues to prevail.

Shortly after the Democrats' "shellacking" last November, I phoned a friend in the White House who had served in the Clinton administration. "It's 1994 all over again," he said. "Now we move to the center."

The supposed parallel between 2010 and 1994 is something of an article of faith in the Obama White House. That's partly because so many of President Barack Obama's current aides worked for Bill Clinton and vividly recall Clinton's own shellacking in 1994. It's also because the Clinton story had a happy ending, at least electorally. The fact that Bill Clinton went on to win re-election is a source of comfort to the current White House as it looks ahead to 2012.

From this, many in the Obama White House have concluded that the president should follow Clinton's campaign script — distancing himself from congressional Democrats, embracing further deficit reduction, and seeking guidance from big business. If it worked for Clinton, it must work for Obama — or so it's supposed.

The superficial logic that so often passes for thought in Washington typically sees causation where there's only correlation. In fact, there's no reason to believe that Clinton's lurch rightward at the start of 1995 is what won him re-election the following November. He was re-elected because of the strength of the economic recovery.

By the spring of 1995, the American economy had bounced back, averaging 200,000 new jobs per month. By early 1996, it was roaring — creating 434,000 new jobs in February alone. I remember suggesting to Clinton's political adviser, Dick Morris, that the president should come up with some new policy ideas for the election. Morris scowled. This election will be about the economy — nothing more, nothing less, he said. Morris knew that voters didn't care much about policy. They cared about jobs. "The president," said Morris, "is going to say, 'You've never had it this good, and you ain't seen nothing yet.'"

The 1991-1992 recession was relatively mild as recessions go. As is typical of most recessions, it had been brought on by the Federal Reserve raising interest rates too high in response to fears of inflation — meaning that a recovery would occur when the Fed reversed course and reduced short-term rates, which then-Chair Alan Greenspan obligingly did.

President Obama won't be as fortunate. The Great Recession resulted from the bursting of a giant debt bubble. Wall Street's irresponsible lending and speculating, negligible oversight by federal regulators, and the insatiable desire of Americans to use their homes as ATMs created a toxic mixture that exploded at the end of 2007 and continues to sicken the economy.

The Fed has kept interest rates near zero for more than a year and has opened the spigots of its discount window, without much result. Unemployment continues to hover around 9 percent. Economic growth is pathetic.

While jobs used to follow corporate profits, American corporations now rack up big profits without expanding employment. Their profits are coming mainly from buoyant sales by their foreign operations — especially in China and India — combined with cuts in jobs, wages, and benefits here in the U.S.

The richest 10 percent of Americans, who own about 90 percent of all financial assets, are buying again (sales at Neiman Marcus and Tiffany's are way up). But most Americans still have little purchasing power. Under a huge load of debt, worried about meeting mortgage payments, and seeing their major asset — their home — continue to drop in value, they're holding back from the malls.

A strong recovery cannot be sustained by the richest 10 percent. Before the Great Recession, the top 10 percent received about half of total income, but they accounted for only about 40 percent of total spending. Forty percent of spending isn't enough to convince businesses to invest in new capacity and jobs, which is why corporations are still sitting on $1.4 trillion of cash.

So many jobs have been lost since Obama was elected and so many people have entered the workforce needing jobs that even if job growth were to match the extraordinary pace of the late 1990s, year after year, the unemployment rate wouldn't fall below 6 percent until 2016. That pace of job growth is unlikely, to say the least.

If Republicans manage to cut federal spending significantly between now and Election Day while state outlays continue to shrink, the certain result is continued high unemployment and anemic growth.

Obama's challenge in 2012 has nothing to do with Bill Clinton's in 1996. He must fight the Republican plans to cut the budget deficit this year and next, and explain to the public why he's doing so. And he must convince Americans that public spending during the next few years is necessary to get the economy moving, reduce the long-term debt as a portion of the total economy, and get jobs back.

Governor Walker's Coup D'Etat

Governor Scott Walker and his Wisconsin senate Republicans have laid bare the motives for their coup d'etat. By severing the financial part of the bill (which couldn't be passed without absent Democrats) from the part eliminating the collective bargaining rights of public employees (which could be), and then doing the latter, Wisconsin Republicans have made it crystal clear that their goal has had nothing whatever to do with the state budget. It's been to bust the unions.

That's no surprise to most people who have watched this conflict from the start, but like any coup its ultimate outcome will depend on the public. If most citizens of Wisconsin are now convinced that Walker and his cohorts are extremists willing to go to any lengths for their big-business patrons (including the billionaire Koch brothers), those citizens will recall enough Republican senators to right this wrong.

But it's critically important at this stage that Walker's opponents maintain the self-discipline they have shown until this critical point. Walker would like nothing better than disorder to break out in Madison. Like the leader of any coup d'etat, he wants to show the public his strong-arm methods are made necessary by adversaries whose behavior can be characterized on the media as even more extreme.

Be measured. Stay cool. Know that we are a nation of laws, and those laws will prevail. The People's Party is growing across America — and the actions of Scott Walker and his Republican colleagues are giving it even greater momentum. So are the actions of congressional Republicans who are using the threat of a government shutdown to strong-arm their way in Washington.

The American public may be divided over many things but we stand united behind our democratic process and the rule of law. And we reject coups in whatever form they occur.

The Principles of the People's Party

The following was sent to me by someone in Madison, Wisconsin, who found it in the Capitol building last week. It was obviously written in a hurry, and it carries the label "first draft."

It's emerging from the heartland – from Wisconsin, Ohio, Indiana, Missouri, and Iowa — and it is spreading across the nation. It doesn't have a formal organization or Washington lobbyists beyond it, but it's gaining strength nonetheless. Like the Tea Party did with Republicans in 2010, the People's Party will pressure Democrats in primaries and general elections leading up to 2012 and beyond to have the courage of the party's core convictions. But unlike the Tea Party, which has been coopted by the super-rich, the People's Party represents the needs and aspirations of America's vast working middle class, along with the less fortunate.

The People's Party is dedicated to the truth that America is a rich nation – richer by far than any other, richer than it's ever been. The People's Party rejects the claims of plutocrats who want us to believe we can no longer afford to live decently – who are cutting the wages and benefits of most people, attacking unions, and squeezing public budgets. The People's Party will not allow them to turn us against one another – unionized against non-unionized, public employee against private employee, immigrant against native born. Nor will the People's Party allow the privileged and powerful to distract us from the explosive concentration of income and wealth at the top, the decline in taxes paid by the top, and their increasing and untrammeled political power.

We have joined together to reverse these trends and to promote a working people's bill of rights. We are committed to:

 1. Increasing the pay and bargaining power of average working people. We'll stop efforts to destroy unions and collective bargaining rights. Protect workers who try to form unions from being fired. Make it easier for workers to form unions through simple up-or-down votes at the workplace.

 2. Requiring America's super-rich to pay their fair share. Increase top marginal tax rates and the number of tax brackets at the top. Treat income from capital gains the same as ordinary income. Restore the estate tax. Revoke the citizenship of anyone found to be sheltering income abroad.

3. Protecting and expanding government programs vital to the working middle class and the poor. These include Social Security, K-12 education, Pell Grants for disadvantaged students, public transportation, Medicare and Medicaid, and the Earned Income Tax Credit.

4. Ending corporate welfare and cutting military outlays. Trim defense spending. End special tax subsidies for specific corporations or industries – at both state and federal levels. Cut agricultural subsidies.

5. Saving Social Security while making it more progressive. Exempt the first $20,000 of income from Social Security taxes. Make up the difference – and any need for additional Social Security revenues – by raising the ceiling on income subject to the Social Security payroll tax.

6. Ending Wall Street's dominance of the economy and preventing any future taxpayer-funded bailout. Break up Wall Street's largest banks and put a cap their size. Link pay on the Street to long-term profits rather than short-term speculation. Subject all financial transactions to a one-tenth of one percent transactions tax.

7. Fully enforcing regulations that protect workers, consumers, small investors, and the environment. Raise penalties on corporations that violate them. Expand enforcement staffs. Provide more private rights of action.

8. Providing affordable health care to all Americans. The new health law isn't enough. We'll fight for a single payer – making Medicare available to all. End fee-for-service and create "accountable-care" organizations that focus on healthy outcomes.

9. Slowing and eventually reversing climate change. We'll fight to limit carbon emissions. Impose a ceiling on emissions or a carbon tax on polluters. Return the revenues from these to the American people, in the form of tax cuts for the working middle class.

10. Getting big money out of politics. We'll fight to appoint Supreme Court justices who will overrule Citizens United v. FEC. Require full disclosure of all contributions for or against any candidate. Provide full public financing for all presidential, gubernatorial, and legislative candidates in all general elections.

A few of the places it's happening:

Madison (ongoing).
Des Moines (ongoing).
March 10: Indianapolis. Gather at 10am and rally at 11:30am at Statehouse, 200 W. Washington St., Indianapolis. Rallies will continue at the capitol until the impasse is over.
March 11: St. Louis. Downtown at 3:30 pm at Kiener Plaza. SB 1 is expected to be voted on in the Senate the week of 3/7 or 3/14.
April 4:  In cities across America. Martin Luther King, Jr. Day – Demonstrations to show that "We Are One."

Why The Street's Euphoric Birthday Has Almost Nothing to Do with a Buoyant Economy

What a difference two years makes. On March 9, 2009 the Dow Jones Industrial Average hit the bottom — closing at a 12-year low of 6,547. Today the Dow is soaring well over 12,000.

From its peak in October, 2007 until its trough two years ago, the stock market lost almost $8 trillion in value. That value hasn't been completely restored but the Street is well on the way.

Some say the Street's buoyant revival should pull the rest of the economy with it. But this is hardly a buoyant recovery.

In theory, at least, the extraordinary bull market should be making Americans feel far wealthier than they felt two years ago. So they should be spending far more, and that spending should be fueling far more job growth than it is.

Why hasn't it happened? In reality, the vast majority of Americans don't feel wealthier because they hold few if any shares of stock. In fact most feel poorer because their major asset is their homes – now worth 20 to 40 percent less than they were worth in 2007 (and there's no sign of a rebound in housing).

The Street's bull market over the last two years has seriously enriched only the wealthiest 5 percent of Americans who hold the lion's share of stock. While their earned income starts at $210,000, their unearned income – dividends and capital gains — now puts them considerably above that.

Shouldn't the shopping of the top 5 percent spur lots of new jobs? Not really. While the top 5 percent are spending more, they're not spending all that much as a proportion of their earnings. The rich sock away a bigger share of their income than everyone else. After all, being rich means you already have most of what you want.

Moody's Analytics estimates that the shopping of America's richest 5 percent now accounts for 35.5 percent of all U.S. consumer spending. Just think how much more spending would be going on — and jobs thereby created — if more Americans shared in Wall Street's gains.

The remaining 95 percent of Americans are still holding back from the malls because they're worried about their jobs, their falling wages, their higher health-care deductibles, and their dropping home values. And as long as they continue to hold back, this recovery will be painfully slow.

Happy Birthday Wall Street. Party away. Just know that most Americans aren't joining the celebration.