Cascading Economic and Political Turmoil and Our Tasks

I’ve been trying to wrap my mind around some of the important economic and political developments cascading across Europe, and how they might affect us.

Late last week, the financial markets were rocked with the announcement that the biggest, and heretofore assumed most stable US bank, J.P. Morgan, lost $2 billion  - the outcome of speculation in high-risk financial securities. In other words, the kind of investing that set off the previous global financial crisis in 2007.

Yet JPMorgan Chase Chief Executive Jamie Dimon speaking just two weeks ago at a conference, where he was lauded as "executive of the year" and introduced as a "CEO Statesman,", argued that the government should focus on resolving its own fiscal issues instead of reengineering a financial system that is healing itself. Dimon claimed:

"The consumer is in my opinion 80% repaired, business 100% repaired," "We have the widest, deepest and most transparent capital markets in the world."

Wow, how’s that for Hubris!

I urge you to listen to William Black’s interview on Democracy Now!

Now we may be witnessing once again the unraveling of the capitalist global financial system.

Europeans stocks are tumbling and investors around the world are keeping a close eye on Greece as the Euro crisis enters a new phase. Thanks to the worldwide economic meltdown and trickle-down austerity response - the Greek economy has been in recession for the last five years.

On the heels of elections that ousted the pro-austerity government in Greece – there will be a new round of elections on June 17th.   The Left will likely pick up even more seats in Parliament - making an anti-austerity coalition government a real possibility just before Greece runs out of money. When Greece goes broke - if the likely new left government refuses as expected to sign on to the austerity and bailout plans - then Greece will default and likely be forced out of the Eurozone.

We see huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.

Those of you that follow such stuff may have noticed the speculators’ “flight to safety” in both Europe and the U.S. This is not caused by a “little thing” like  JP Morgan Chase losing $2 billion. They’re estimated to have an exposure of $79 trillion (that’s t from trillion) on a market capitalization of only $140 billion! Talk about being highly leveraged.

What happened with J.P. Morgan last week—and is still yet to happen further with J.P. as well as with other US banks—shows how deeply the US banking system is integrated with the European. J.P’s losses are Euro-centered, speculation driven, and Credit Default Swaps and other derivatives based. That means what’s been happening in Europe and its banking system is not isolated from the U.S. banks. Today’s emerging European bank crisis—the second globally since the first in 2007-09 centered in the U.S.—will have a significant impact on the U.S.

Some recent headlines read:
Get Ready for the Spanish Bailout
Spain Is the New Greece
Growth Chill About to Hit the US

Keep in mind there are $trillions of dollars of Credit Default Swaps (bets), and other toys the geniuses on Wall Street created, piled on the worlds’ economies and ready to tumble like the proverbial stacked cards.

There’s no way the U.S. economy, despite all the false hype about another recovery now occurring in the U.S., can avoid a further downturn as well.

What’s already been the impact on our jobs, retirement security, on the state budget and services, on our families? One indicator: in 2010, 93 percent of all new income created in the previous year went to the top one percent, while the bottom 99 percent of us had the privilege of enjoying the remaining seven percent.  In other words, the rich are getting much richer while almost everyone else is falling behind.

The real solutions to the parallel failures of economic policies in both the U.S. and in Europe today require basic restructuring of the banking systems in both economies. This will only be possible if we change what’s currently politically possible. We are beginning to see that change:

People across Europe have been shaking things up on the job, in the streets, and at the ballot box.

* Last week, hundreds of thousands of British public sector workers staged a 24-hour strike against their government's attacks on pensions.

* in Spain, hundreds of thousands marched against government plans for more austerity despite record 24% unemployment.

* Polish union members protesting against plans to raise the retirement age chained together barriers meant to keep them out of Parliament on Friday. `We will decide when they will leave,' a Solidarity trade union leader said. `At least for once we will decide something instead of them.' The union members took their action after lawmakers voted to raise the retirement age.

The Greek and French elections show that the people want real income growth and jobs -- and they are clear that austerity is undermining both.

In Germany - Chancellor Merkel saw her Conservative Party get crushed in state. Merkel has been leading the charge for austerity around Europe - but now finds herself vulnerable as support for her Party plunged to 26%.

The voters of Europe have spoken, and surprise: they are not too keen on fiscal austerity.  What are we waiting for–a translator? Everywhere you look - the supporters of trickle-down austerity are getting hammered by voters. However, the anti-tax bogeyman isn't going away soon with Governor Shumlin having the bully pulpit. Let's help Vermonters and other Americans get the message.

The ‘Arab Spring,’ the movement of the ‘indignant ones’ in Spain, the numerous strikes and demonstrations in Greece, the worldwide ‘Occupy’ movement which started in the US, as well as the campaign for a Peoples Budget in Vermont are all a source of encouragement. It is high time to strengthen the organizing and protests! Together, through strong grass-roots activity in Vermont and around the country, we can change the direction of our state and this country. Please don’t ever forget that, even in these difficult times.

Tax The Wealthy; Not The Ratepayers

Ten years ago, the Vermont Public Service Board approved a bailout of CVPS by its ratepayers.  It was in the best interests of the ratepayers to have their publicly regulated monopoly survive.  In the bailout agreement, the PSB permitted 135,000 Vermont households to be “taxed” to the tune of $17 million with a requirement that the ratepayers would be paid back BEFORE any sale of the company took place.  At the time, no one wanted to buy it.

Now on its feet again, and an attractive financial investment, two Canadian companies are interested in buying CVPS.  The VT Public Service Department has proposed that Gaz Metro be allowed to buy CVPS without paying back the rate payers. The proposed terms would allow the $17 million (now $21 million with inflation) to be put into weatherization and energy efficiency programs for the benefit of all Gaz Metro customers.

This is simply not fair.  Although I am a big fan of weatherization programs and renewable energy projects, having proposed those programs in legislation myself, this is the wrong way to go about it. The PSB’s job is to protect the ratepayers who are in a monopoly market.  They can not turn to any other entity for electric service.  This should not be a partisan issue.  It is simply about fairness and living up to our commitments.

Energy efficiency and weatherization programs should be funded by a tax on those who are not paying their fair share, not by the ratepayers who were promised that they would be repaid.

The governor is worried that 3 or 4 millionaires might move out of state if we were to raise their taxes.  He should be more worried that 135,000 families, potentially containing 200,000 – 250,000 Vermont voters might move to another option at the ballot box.

We Need to Invest in the Right Future

This Mother’s Day, I am thinking about mothers and families all over our country. The past few years have not been easy. In Vermont, families continue to struggle to make ends meet here. In Washington, DC Congress is trying to put together a budget for next year. I’m watching this process closely because our state counts on funding from the federal government to implement crucial programs. The budget process will affect each and every one of my constituents.

The budget passed by House Republicans will slash programs used disproportionately by women and families. In addition to the Medicare and Medicaid cuts you may have heard about, it cuts funding for programs like food stamps, childcare, Head Start, job training, Pell Grants, and housing and energy assistance. Meanwhile their budget allows defense spending to continue to increase.

Each year, Congress appropriates more than half of discretionary spending to the Department of Defense. Even without deficit reduction pressure, this overspending takes dollars away from needed domestic priorities that strengthen our economy and ensure that America can compete in the world marketplace.
In the past decade we have spent billions on war. Afghanistan is now the longest war in our nation’s history, and we spent nine years in Iraq. Whether measured merely in direct financial cost, or in the broader and more profound cost of lives lost and damaged, we cannot afford to be a nation perpetually at war.

Some supporters of the Pentagon and their contractors tout money to the Pentagon as a jobs program. Sensible national security jobs make sense, and no member of Congress can ignore the effect of policy decisions on jobs. Nonetheless, economists have shown that federal investments in non-military sectors--like education, healthcare and clean energy--create more jobs than military spending. It makes sense to invest federal dollars in sectors that will create productive jobs that will help our economy grow for years to come.

We can make sensible reductions to Pentagon spending and invest in programs that will help build a vibrant economy for generations to come. This Mother’s Day, let’s honor hard-working women around the nation by calling on Congress to pass a budget that supports women and families and puts us back on the path to a sustainable economic recovery.

This also appeared in the May 5 edition of the Brattleboro Reformer.

Fair Share? Not So Much

When you form a union not everyone has to join. But when a contract is agreed to everyone is covered regardless of whether or not they join the union. And, whether they pay union dues.

Plus, if a non union member has a grievance the union has their back. Which is why unions like the idea of requiring some kind of fee from even the non-union members they have to work for. This fee is called an "agency fee" or the "fair share fee" as it's called these days in the legislature.

When the senate passed an education bill Sen. Tim Ashe (D/P - Chittenden) attached the fair share language that had been discussed on and off all year.

We are about to debate this bill on the floor. Our only option is to agree otherwise the underlying bill will die. There simply isn't time to change it and send it back to the senate. Trick is, House Democrats don't have the votes to pass the fair share provision. That's right, over a third of the House democrats are a knee-jerk no vote on a basic labor principle of fairness.

I believe they'll get the votes after some arm twisting but it's a sorry state of affairs if we can't pass a basic labor principle like a fair share provision for municipal and school employees. Sad.

Vermont Surrendering to Monsanto

A Story by Will Allen and Ronnie Cummins at alternet on April 19, 2012 asks the question, "Is Vermont's Governor surrendering to Monsanto?" The story goes on the say, "Vermont's governor has 2 weeks to stand with 90 percent of his constituents who favor labeling genetically engineered foods, or cave to Monsanto."

In the event that our Governor caves, former Progressive Legislator and farmer David Zuckerman, should be waiting in the wings and announce his bid for Governor.

What do you think?

Proposed Bylaws Changes

Our February State Committee meeting was focused largely on a discussion about which candidates our party can endorse or nominate. The general sense coming out of that meeting was that as a party we are figuring out how to go forward on a case by case basis, and that our bylaws should be cleaned up to reflect our current practices over the past two election cycles.The Coordinating Committee has proposed several amendments to our bylaws. The current proposal (which will be brought forward for a vote at our May 12 State Committee meeting) is available here. The changes proposed would give more power to party committees to endorse candidates, and would likely broaden our endorsement of candidates supporting our issues.Specifically, the changes:

  • State that the CoCo is responsible for allocating party resources to endorsed candidates (section 14);
  • Require a quorum of 50% for endorsement decisions (section 19);
  • Removes the restrictions around committee nominations, a process defined in state statute (section 26); and
  • Gives authority to endorse candidates to county and state committees, with guidance rather than restrictions on endorsements (section 26).

Bylaws changes are voted on by State Committee members, but we would appreciate feedback from any and all. My hope is that the discussion continues here and at the May meeting, and that our bylaws are strengthened to put us in the best possible position for the elections in 2012, and for another thirty years after.

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