The Death Of Retail Is Also The Death Of The Middle Class

Jason Del Rey wrote a great article in Vox recently about the death of the department store and how that is directly linked to the demise of the American middle class. It remined me of Sears. The story of Sears illustrates his point. Fifty years ago, young married couples went to Sears to buy their appliances, furnish their new "starter houses," buy baby clothes and furniture, and, of course, buy lawn mowers, garden tools and even have the "family car" fixed. A credit card from Sears was a passport to lower middle class status. You were on the escalator to the middle class. But since the advent of the Reagan Revolution in 1980, that middle class has been shrinking steadily, as the economic escalator has gone into reverse. The anchor stores in the typical American mall were Sears, JCPenny, Lord & Taylor and Macy's. And where are those stores, and malls, and employees now? The same place the robust American middle class has gone: oblivion.

There Will Be No 'Roaring Twenties'

American mainstream news thinks it is so smart. It knows history! It knows that after the flu pandemic of 1918-1919, the US economy boomed into what we call the Roaring Twenties. If we ignore suppression of freedom in the form of segregation and prohibition, the 1920s were a damn good time! And it had to be triggered by the end of the pandemic, right? And history is going to repeat perfectly, 100 years later, right?

If only it was that simple. Thankfully, plenty of people still understand that economics is adjacent to history as a field of study. Some might argue that they are inseparable. How could you describe the rise or decline of an empire or nation without addressing its economy?

The Roaring Twenties, like any economic boom, was brought about by a variety of factors. We had a continued immigration surge (immigration surges almost always lead to economic growth), widespread electrification, the rise of corporations, the dawn of the modern consumer culture, the rise of the US labor movement, and American culture began to define itself.

A note on the last part: popular culture came of age. The rise of the music recording industry and radio went hand in hand, and great American music genres like blues, bluegrass and jazz were the main beneficiaries. Also, it has to be said that American culture is black. We can give white men some credit for the original American spirits. applejack and bourbon (although black people have been involved with those from the start in one form or another). But blues, bluegrass, jazz, barbecue cuisine, and (later) rock n’ roll, R&B, soul, funk, hip hop and rap are distinctly American and all black. And in the 1920s, only a lucky few black men and women could get a taste -a tiny serving- of prosperity and freedom that came with being an accomplished music artist. Later, some black artists would find more freedom in Paris, especially after the Tulsa race massacre in 1921. Let’s be clear. American culture is driven by black American culture. But black people are not allowed to be prosperous or be free. Still.

On the economic side of things, there really was a sea change. Publicly-traded corporations became powerful in the 1920s. But so did a new labor movement, which led to the standard five-day work week. The 1920s gave us weekends, right before the stock market crash and depression. And incredibly, the depression didn’t take our weekends away. Consumers in the late 19th century would often have to buy goods at a general store, and occasionally order products from a catalog (like a proto-Internet). In the 1920s, consumers still used mail order, but more of what they wanted was immediately available in bigger grocery stores and brightly-lit department stores. The American consumer themes of bigger faster and more had come of age. Automobiles were beginning to be owned by every family. Travelling from coast to coast was now possible in 4-5 days by train. The United States was starting to flex its industrial and technological muscle.

We still have a few intelligent people who know that history won’t be repeated simply because a pandemic is ending. Assuming we are just a few months away from this pandemic bing downgraded to an endemic, there can’t be a long-term surge in prosperity after what we’ve just seen in 2020. There are a few reasons for this.

First, last year was a windfall for the billionaires. The wealth transfer in 2020 alone was shocking, even compared to the overall wealth transfer over the last 40 years. Some individuals just ran away with all the wealth. Kanye West (!) entered the billionaire club. And four of the wealthiest Americans alive saw their net worth grow by a combined $229 Billion. There is no catching up for the rest of humanity. This bigger wealth gap simply sets the stage for stagnant wealth creation for the global middle class, and the greater probability of political and social turmoil over wealth inequality. We can’t have a roaring 2020s if the only ones partying are 5,000 US families with a net worth over $100 Million. That’s a wealth gap on the scale of the Philippines, Russia or Brazil.

Second, there doesn’t appear to be a technological revolution to supercharge wealth creation. Autonomous driving isn’t it. Machine learning (marketed as AI) isn’t it. Billionaires buying tickets to low Earth orbit or the Moon isn’t it. Even the vaccines and biotech, as amazing as they are, aren’t it. Free broadband Internet access for all would be significant. But most municipalities aren’t on-board with that idea. Either that or they’re broke.

Third, did I mention we’re broke? We aren’t rebuilding infrastructure. We’re letting municipal water systems fail and die. We aren’t putting money into the hands of builders. We aren’t making public university free of charge. We aren’t forgiving college debt. We aren’t expanding Medicare for all. We aren’t even trying to house the homeless. And where is our shift to clean, renewable energy? What moon shot do we have in us to kick-start a decade of strong economic growth?

Fourth, American manufacturing will never disappear, but the days of a healthy manufacturing sector are long gone. Manufacturing jobs have been replaced by Amazon warehouse and gig delivery jobs that pay a fraction of what the manufacturing jobs paid. Millions of Americans are working just as hard for less, and half of all Americans are poor. We’re going into to 2020s with the poverty, wealth gap and despair of the Great Depression.

Fifth, after the partial recovery of the travel, live entertainment, hospitality and dining sectors, we will still have a black hole in commercial real estate, as many workers are not returning to office spaces full-time. Working from home is now the norm for many, especially in information technology and information security. Some companies are learning to trust their remote workers to maintain their productivity, and are ending their leases for office space. A lot of commercial office space is going to have to convert to residential apartment space. Oh, and while we’re on the topic of buildings, did anyone notice how many vacant retail spaces there were in cities like New York and San Francisco back when the economy was growing? Brick and mortar retail is dead. All the cash is flowing to Amazon.

In sum, I just don’t see years of strong economic growth ahead. A return to the slow growth seen under Obama and Trump would be welcome. But long term, we are still in late capitalism. And man, does it suck. It’s a dystopian capitalist nightmare, frankly.

There Won't Be Much Bounce

People are gullible. People are naïve. People thought that COVID-19 would just go away last summer. Now they are thinking that it will just go away once they are vaccinated. It’s no use trying to educate anyone. Let them believe what they want. But know this: the economy will not simply return to summer 2019 levels at the flip of a switch. That isn’t how macroeconomics works. It will take years -two at the earliest.

On a related topic, our big cities will come back to life. But it will also take years. I’m not really living it up all over Manhattan (although I am making better cocktails at home and plan to resume outdoor dining in March). But I am keeping the city warm until the good times return. Someday.

And while the pandemic will end, the SARS-CoV-2 virus will remain in the human population for centuries. How do I know this? Because I used the Google and learned that what we call seasonal influenza can be traced back to the 1918 flu pandemic. Also H1N1 is a descendant of the 1918 flu. It has been over 120 years. Has influenza gone away? No. Therefore this SARS virus isn’t going away either. How many Americans do we think will die of COVID in 2030? Maybe 20,000? That’s my guess.

So while there won’t be a very strong economic bounce, pandemics continue to bounce like super balls year after year.

Continue To Be Extra Nice To The Rich People

More than any other rule in our society, we cannot break this one: be extra nice to the rich people. Even as society seems to fall apart, the rule is actually enforced more aggressively.

New York State seems to be on the verge of financial ruin. But please, whatever you do, don’t raise taxes on the rich who live in the state. Any politician who dares utter the three words, “tax the rich” is branded a dangerous left-wing extremist. The second, and presumably final COVID-19 stimulus / rescue package just passed by Congress contains many tax cuts. One of them is a ridiculous expansion of the tax deductions for corporate business meals, known since the 1950s as the “three martini lunch deduction.”

We have the best government money can buy, and it's very rare when any politician looks the big shots in the eye and says we're going to raise your taxes. The last president who did was Clinton, and his party was severely punished for it in 1994. Remember the Newt Gingrich revolution? It was about working people. It was all about protecting low taxation for the rich under the banner of deficit reduction and fiscal responsibility.

Right now, the virus has pauperized at least 50,000,000 Americans, and the rich are literally feasting on the fallen. They've bought up the assets of the bankrupt, they're buying more property, and their stocks have more than recovered. They're richer and more powerful than ever. We live in glorious times!

Before We Lost, The Billionaires Won

It’s been over 10 years since the “great recession.” Since then, we had a period of modest growth, followed by a depression. Let’s catch up with the Billionaires and how they have been doing since 2009. Like this Russian family, who tried to get richer just before the pandemic struck.

• In 2009, the world had 793 billionaires with a combined wealth of $2.4 trillion. There were 98 members of a more exclusive club: $5 billion or more.

• As of 2019, the world had 2,153 billionaires with a total net worth of $8.7 trillion. Membership of the $5 billion club quadrupled since 2009 to 424, and 166 people now have at least $10 billion.

• To qualify as one of the world’s 100 richest people, you now need a minimum net worth of $14.4 Billion. Ten years ago it was $4.9 Billion.

Karl Marx pointed out in Das Kapital the capitalism  was the most successful  economic  system yet devised, if measured by the ability to create vast quantities of  wealth. It was in distribution of wealth that capitalism  failed spectacularly . Only when government  heavily taxes concentrated  wealth, and redistributes  it through public programs  like universal health care , free public education through  college, massive, job-creating infrastructure spending and the like, does capitalism produce a system in which every social class sees a steady rise in income and living standards. The United States had such a  system for both corporations and individuals between 1945 and 1980. The rich, as always,  got richer, but a huge middle  class was created,  and with relatively few exceptions, the general standard of living improved in every category. This period came to a crashing end with Reagan, who pursued an unambiguous policy of transferring  wealth to the very top of the income scale through huge tax cuts, the evisceration of  labor unions, and draconian cuts in redistribution  programs. And so here we are. The wealthy waged war on the rest of us, and they won.

In the Trump years, corporations were known for having too much cash and too few investments. It wasn’t a big economic boom as the GOP says. It was a time of amassing cash and not hiring people.

The French economist, Thomas Pickety, wrote a well received book a few years ago that thoroughly analyzed the reasons that capitalism tends to create ever greater wealth and income inequality. The short answer is because, absent a tax policy directly aimed at redistribution, the investor class will do what it's currently doing. Unchallenged by strong unions, which would give workers some leverage in demanding higher wages and benefits, and coddled by a tax cutting and corporate contribution dependent government, investors can simply keep more and more of the earnings that increased productivity and inexpensive labor created. Of course the capitalists keep nearly all of the wealth created in the economy. It isn't taxed for redistribution to the society that makes it possible, and it doesn't go to increased wages and salaries, because workers have no bargaining power. The rich inevitably get richer, and that will not change unless fundamental social and political changes take place. Between 1945 and 1980, the west kept taxes, especially on the rich, very high, and pursued policies which strengthened unions and redistributed wealth through increased home ownership and educational opportunities. But with Reagan and Thatcher, all that changed. Massive tax cuts benefited the already rich, unions were deliberately decimated, good jobs were shipped to low wage countries, and the inherent tendencies of capitalism toward ever greater concentration of wealth at the top reappeared. As Yogi Berra once said, it's like deja vu all over again.

General Motors Betrays The City Of Detroit (Again)

General Motors has done it again. They have shut down a Detroit plant. The last time they dealt a big blow to a Michigan town, it was Flint in 2017.

Back in the halcyon days of the Reagan administration, corporations joined the late capitalist movement of putting the enrichment of the investor class above nearly every other consideration. This involved crushing what was left of industrial unions, stealing the pensions of retired workers through the perversion of bankruptcy laws, and, needless to say, the ruthless looting of public subsidies and tax breaks. Naturally, the public subsidies were delivered, but the promised jobs and prosperity somehow never arrived. GM was simply following the new rules of corporate citizenship when it took the public money, and then walked away when their promises came due. Surprised?

The US Stopped Taxing The Rich 30 Years Ago

Yet another new study shows that the US has not seriously taxed its rich people since Reagan signed his tax reform into law in 1986. The great project launched in 1980 by Reagan has reached its apotheosis. We have a government of, for and by the rich. SUCCESS!!! 

Domestically, the US has lived almost by a single rule: be extra nice to the rich people. It has led to nothing but trouble. It even led to Trump.

Further Down The Spiral

The differences between the Democratic party and the GOP continue to dwindle. The Democrats are sponsored by Wall Street, have abandoned the idea of taxing the rich, and have even abandoned questioning the size of the military-security complex. Meanwhile, Republicans are embracing marijuana legalization and marriage equality. The biggest differences left are really Social Security, science, and medicine (the GOP is against all three). Otherwise, that's pretty much it, folks. We can summarize this nation like this: declare war on the world, give every break and perk to the rich people, spy on everyone, and ignore the man-made environmental catastrophe. The longer we keep these two parties in power, the further this nation is ruined. Considering it has been this way for nearly 20 years, it is probably too late to save the USA.

Chris Rock: Most Americans Oblivious To Class Inequality

None of this is news to Americans who live in our largest cities. Chris Rock is probably correct about most middle Americans being oblivious to class inequality. There, the reality of inequality is right in your face, unambiguously  and apologetically slapping you, just in case you might miss it. In the small towns and suburbs, where most Americans live, the arrogance and entitlement of our plutocrats -and yes, our kleptocrats too- is more abstract, out of sight, and almost never encountered in person. The great and mighty fly in their private jets, to their palaces in the sky, or their private islands. Out of sight, and out of mind, they float above the rest of us, supremely confident and protected. 

The Wonders of Capitalism

I'm afraid this post is going to be a mess. There is no easy way to report on the disappointment that is our capitalist system without writing a book about it. Fortunately, that book was published last summer.

In a summer full of bad news the world over, we in the US should be focused on the five biggest stories that directly effect us: our endless wars, our loss of the Fourth Amendment, our loss of women's reproductive rights, our ongoing water crisis / environmental crisis, and our unsustainable economy.

New York City increasingly relies on executive pay and Wall Street bonuses to keep its treasury full. Once any economy relies on the top 1%, it becomes unsustainable. Even Michael Bloomberg knew this. So the city has had to rely on tourism to make up the gaps. I don't think that is sustainable, either.

This post will focus on our current economy. Simply put, the rich get richer. Here's are just a few angles of the same overall story.

First up, CEO pay is ruining our economy. We now have proof. I can see you are not impressed. Occupy Wall Street tried to make us pay attention, but they didn't succinctly make their case. And now we have articles and books, like the ones above, to prove that Occupy was right, and those kids were on to something. But now we don't give a shit.

But let me elaborate on this a bit more. What does the economy of a city that relies on the top earners look like? How does it function? The answers are right above us, in the new supertall residential buildings going up. In a city in which there is an oversupply of office space, there is a bubble economy in the new luxury residential market.

Who is driving up the prices in new luxury construction? Mainly Wall Street managers and wealthy foreigners. And this price war has helped sustain a real estate appreciation across the whole city that has priced out the middle class. Millions of New Yorkers, whether they care or not, have lost their chance to buy.

Second up, Wall Street. The average Wall Street annual compensation with bonus is $369K. The average white collar NYC salary is $69K. The US median salary is $51K. And over half of New Yorkers make less than $40K. And what is our national economic policy? Be extra nice to those at the top. Given their contributions to the health of the economy, don't they obviously deserve such a large percentage of the income in the city? After all, consider what their taxpayer backed financial manipulations created in 2008. The world has staggered through the deepest recession since World War II, and the authors of this catastrophe have gotten richer every day since. Ah, the wonders of Capitalism.

And third is the current bubble. Looking up and down the Northeast Corridor, one can see that we are in the midst of a dangerous and destructive real estate bubble. While housing in Baltimore and Philadelphia remains affordable, comparitively speaking, the bubble is in full swing in Boston, New York, and Washington DC. Let's take a quick tour.

In Manhattan, the bubble is not done expanding. It wasn't long ago the average sales price of a Manhattan apartment (condo or co-op) exceeded $1 Million. This past fall, it surpassed $1.68 Million. 2014 was simply a blockbuster year for the borough. It marked the continued inflation of a real estate bubble that began in 2002, and survived the national sub-prime explosion. The average price per square foot in Manhattan is over $1,400. Units in Tribeca or those with a view of Central Park, are setting new records above $5,000 and $6,000 per square foot. On the rental side, it was about 15 years ago that we first saw studios pass the $1,000 per month mark. How does $90 per square foot per month sound?

And at the very top of the market, the properties for the top-half of the top 1 percent live in their own bubble that even Tokyo and London do not yet match. The epicenter of this bubble is the new row of super-tall residential towers in the 50s, with offer upper half residents views of Central Park. The entry-level building for this segment, Extell's One 57, has seen its sales grind to a halt while the elite wait for the completion of 432 Park Avenue, which offers more spectacular views and floorplans, and Extell's upcoming 225 West 57th Street, which will set a new height record for residential towers in the western hemisphere.

Outside of the new midtown skyscrapers, there are the blockbuster exotics, like the crazy triplex co-op at the Pierre Hotel, the new penthouse on top of the Puck Building, and the multi-level mansion at the top of our nation's first skyscrpaer, the Woolworth Building.

The Woolworth Building was once the crown jewel of downtown. In some ways, turning it into condominiums for plutocrats nicely summarizes what's happened to the economy, and the once great city of New York. 

There had to be a point where the prices in Manhattan would be out of reach for most dual $100K earners. Even the affluent are tiny compared to oligarchs and investment bankers. So they shifted their search to Brooklyn. Now Brooklyn is almost as ridiculous as Manhattan. Wait, did I say almost?

How about Queens, then? Nope. Not affordable any more.

The madness continues. When will the city realize it's sitting on a real estate bubble? And do we really have to be reminded of what inevitably happens to bubbles? But say this for bubbles, they can be fun until they burst.

The high end condos are driving the market, but the law of supply and demand will raise both prices and sales everywhere in New York. At least, until the current bubble bursts, and it hits the fan again. But in the meantime, isn't capitalism fun?
 

And we have a bonus stop on our tour: Boston. 

Have you seen the asking price for the penthouse in the yet unbuilt Millennium Tower next to Filene's in downtown Boston? It won't be finished until 2016, so there's still time to buy, if you can come up with $37,500,000. At that low price, it might attract a bidding war. The new apartment building at the TD Garden will feature apartments on the upper floors of $8,000 to $10,000 a month. IN BOSTON. I guess the Manhattanization of Beantown is nearly complete. 

The Slow Death Of Radio Shack Mirrors The Slow Death Of The American Working Class

I must say, aside from grabbing a copy of Capital in the Twenty-First Century, this is the must read economics article of the Christmas shopping season:

John Bois: A eulogy for RadioShack, the panicked and half-dead retail empire

What a nightmare the American working class is living through! Since the Reagan administration at least, American workers are routinely treated like soulless, right-less, replaceable machine parts. We're back to working conditions that were common before the Progressive movement, and which we imagined were largely abolished in the New Deal and Fair Deal of the 30's and 40's.

Well, we were wrong, and the capitalists have won. Hooray for us.

Update, February 23, 2015: As Radio Shack closes this week, John Oliver has contributed this little gem:

The New World Trade Center Is Already A Failure

To the surprise of absolutely no one, the World Trade Center site is a disaster on every level where failure was possible. It can't make money, it's an aesthetic nullity, it dishonors the dead, and is the crown jewel of the dysfunctional relationships that permeate the corrupt Port Authority of New York and New Jersey. What's worse, of course, is that this outcome was predicted more than a decade ago, by just about everybody with any knowledge of the situation.

Is It Posh Assholery Or Projection?

Niall Furguson is perhaps the closest thing the UK has to Ann Coulter. He's not a real economist or historian, despite his teaching privileges at Harvard. He's a right wing television commentator with a particular mean spirited, provocative style. He loves to push the buttons of his political and academic opponents.

On May 2nd, speaking to over 500 financial advisors at the Tenth Annual Altegris Conference in Carlsbad, California, Mr. Furguson once again attacked the greatest, most influential economist of the 20th Century. No transcript is available, but he essentially said that the motivation behind Keynes' famous quote, "In the long run, we are all dead," stems from his being both gay and childless. The argument that Keynes' alleged homosexuality weakens or invalidates his economic theories has been a staple of anti Keynes criticism for seven decades.

This is not Ferguson's first homophobic slur against Lord Keynes. As long ago as 1995, in an article for Spectator, Furguson asserted that Keynes opposed the 1919 Treaty of Versailles (which formally ended WWI) because he was sexually attracted to the German representative at the negotiations. That was to argue that Keynes was literally gay for Germany. Then, famously in a 1999 book, he accused the greatest economist of the twentieth century of picking up young men in London.

What is it with all these personal attacks on a man who can't defend himself? Could it be projection? Isn't it always?

I noticed that the Harvard History Department was unavailable for comment on Ferguson's latest nasty remarks. Apparently his nose is broken because the American public refuses to embrace the imperial project he believes the Unites States must pursue in order to be true to its destiny. Poor Niall.

New York's Middle Class Has Shrunken

The penthouse at 15 Central Park West, which was purchased by the Rybolovleva family in December 2011 for the full asking price of $88 Million. Their 22 year old daughter, Ekatarina, now lives there following her stint at Harvard.

Last week's New York Times story about nealry one third of New York city’s income going to the top one percent of the city's earners is not surprising. What was once the leading manufacturing city in the United States has been transformed into a huge financial casino, with the gamblers at the top reaping all the rewards. Who cares if they nearly brought the economy to its knees, and blighted the lives of millions of Americans? And who is really concerned that they’ll do it again if they’re not prevented? How fitting that Mike Bloomberg should preside over this carnival!

PhDs In Climatology

All it takes is a few February snowstorms to send the wingnuts into a frenzy over climate change.

But not only climate change.  They also went into a frenzy about the weather's impact on job data.  Educated people who have been paying attention to business news since 1990 or so realize that stormy weather has been proven to have both micro- and macroeconomic consequences.  Weather effects earnings, consumption, spending, production, and everything connected to them in our economy.

They probably don't remember nor care that Enron, once a poster child for 21st century corporate America, developed one of the world's first electronic weather derivatives markets - in which investors and institutions both speculated on what the weather would bring, and also hedged their weather-related exposure.  And now the wingnuts are in denial that a series of strong snowstorms can slow hiring?  They are hysterical, excitable, violent, dim-witted, anti-intellectual liars.

John Stewart vs. CNBC / Jim Cramer, Part III

The extended version of the Jim Cramer appearance on the Daily Show. Jon Stewart destroyed him. And Megan McArdle seems annoyed by it all. How dare primetime TV transcend empty entertainment?

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Working For Free?

If you're good at something, never do it for free. - The Joker

I try not to write about myself because first, this is supposed to be a blog about my team's interests, and not necessarily a blog about us personally. Second, I fear that any discussion of economic hardship that I'm going through while still living in Manhattan will make me sound a lot like Megan McArdle, a person I and others loathe.

The small business I work for had a nightmare day yesterday. Their AMEX card is frozen. Their bank accounts are frozen. They can't do payroll (payday was last Thursday). They owe hundreds of thousands to various shady suppliers. And one character owes the store money, but his last check bounced, in what might have been a retaliation for checks that bounced in the other direction.

So I ask a veteran salesman here when was the last time he was successfully paid (without the check bouncing). He told me five weeks. He explained that he was patient because he considers himself close friends with the family that owns the business.

But the question to myself is - how long do I work for free? Friends say that now is the time to go on 'strike.' But I am getting some decent experience updating content on the store's web site. And it is fun selling rocks (yes, one month in, I admit it).

Am I insane, or will working for free become a common experience in this economy? Now if a corporation missed payroll, it would be finished. But small businesses can cheat a little. And then there's the unemployment insurance issue. If I go on 'strike' I can't resume collecting NY State unemployment insurance. My understanding is that either I have to be laid off, or the company has to go under first.

So here I am, working for free at a small company that seems to be on the edge of Chapter 11, wondering if I can continue to hold on until either my next paycheck or the closing of the store.

In the meantime, I continue to read Paul Krugman's blog. In my opinion, he has been correct in his predictions for over 12 months now. So I urge everyone to rely on him as your macroeconomic weatherman.

Bloody Monday: Over 70,000 Layoffs Announced On January 26th

Most economists have agreed that the US recession will continue through June 2009. But today's news proves that many more months of bleeding will occur before we have a chance to recover (and let's not forget that our recovery could be handicapped or delayed further by a continued global credit crunch). Today's news of over 50,000 announced layoffs, revised tonight to over 70,000, is just stunning. We were averaging over 200,000 layoffs a month, but at this rate, we could soon see half a million per month.

For the best analysis and forecasts, I continue to read Paul Krugman's blog and columns for the NY Times. He's been busy writing and spending time on TV defending Barack Obama.Defending Obama is admirable, but it is not Krugman's job. While I think that Obama has asked Krugman to be an unpaid advisor (heck, just reading Krugman's blog and articles would be more valuable than any paid economic advisor's words), Obama needs to find more surrogates and defenders who can do television interviews regularly.

Run, Don't Walk...

...and read John Kemp's outstanding summary of the US & UK debt crisis at Reuters.com.

And while we're at it, go read John Gray's stunning September 28th piece in the Observer, in which he declares that the UK "has turned itself into a gigantic hedge fund." It was reprinted in Harper's December issue. I am still catching-up with my stack of Harper's, and I finally read the piece this morning.

The $700 Billion Robbery

Today the men who run our country for the next three months, Ben Bernanke and Richard Paulson, formally asked the American taxpayers to bend over and take a platinum phallus to their anuses. Think I'm exaggerating?

They are demanding $700 Billion for the public to purchase worthless mortguages, or else, they say, the country will suffer greatly.

'Give us the money or the country gets it!!'

But the treasury does not have the cash. If this goes through, the US would have to borrow $700 Billion.

If this mortgage bailout plan passes through Congress, we're beyond screwed. How, you ask? Here are some well-informed opinions:

Paul Krugman, NY Times (registration required): Cash for Trash

Sadly, No!: Light 'Em Up, 4 reasons why the package should not be approved.

Dave Lindorff: The Bailout Will Kill The Dollar

Sadly, No!: Forget buying a banker. Buy a Progressive.

Bernie Sanders: No Bailout on the backs of the middle class.

Henry Blodget: Bernanke and Paulson - Here's why we're screwing you.

Howard Rodman: Buffet will make money on his investment in Goldman Sachs, but we won't.