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Summary: America's Financial Crisis: Week of August 8

5 New Items including:

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  • Five myths about the Bush tax cuts
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  • The battle over Elizabeth Warren
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David Culver, ed., Evergreene Digest

John Darkow

Jobless? Your leaders are at ease with that, Paul Krugman, New York Times

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  • None of them want to fix it -- so high unemployment might become a habit.
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  • Punishing the Jobless
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Undocumented immigration: paying the price of NAFTA, Emile Schepers, People's World

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  • A study published by the Carnegie Endowment for International Peace in December 2009 explains how this worked out in practice. ("Rethinking Trade Policy for Development: Lessons from Mexico under NAFTA")
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  • The Economics Of Immigration Reform
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Five myths about the Bush tax cuts, William G. Gale, Star Tribune | MN

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  • A gloomy economic outlook...has given rise to a number of stubborn myths about what extending the Bush tax cuts would -- or wouldn't -- do.
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  • Tax the rich more. (They can take it.)
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  • Trickle Down Economics doesn't work
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  • Top 5 Social Security Myths
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What the NY Times is not telling you about the deficit, Rick Nagin, People's World

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  • The deficit is largely a red herring - an issue being ginned up by the Republicans for the purpose of preventing Obama from making headway on economic recovery. They hope that anger and frustration over the ongoing crisis can be channeled into Republican votes in November.
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  • Reagan’s budget David Stockman director calls GOP tax cuts delusional
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The battle over Elizabeth Warren, John Case, People's World

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  • Real consumer protection against fraud and misinformation in financial services is something the "financial sector" has fought for years. The catastrophe that required a $4 trillion public fiscal and credit injection into the economy makes no impression on the people whose reckless, unregulated behavior caused it, and whose bread is now buttered with its spoils.
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  • The Case For Elizabeth Warren
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What the NY Times is not telling you about the deficit.

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  • The deficit is largely a red herring - an issue being ginned up by the Republicans for the purpose of preventing Obama from making headway on economic recovery. They hope that anger and frustration over the ongoing crisis can be channeled into Republican votes in November.
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  • Reagan’s budget David Stockman director calls GOP tax cuts delusional
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Rick Nagin, People's World

In a major editorial last Sunday (August 1) entitled "What They're Not Telling You About the Deficit," the New York Times offers at best a partial solution to the problem of the deficit. The Times justifiably criticizes the Republicans, who blame stimulus spending and extension of unemployment benefits for the deficit. The Republicans fail to mention the tax cuts they enacted primarily under the Bush administration to benefit the super-rich.

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Allowing the tax cuts for wealthy families to expire at the end of the year would generate $680 billion, a major chunk of the deficit that is expected to rise to $1.4 trillion this year.

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Reagan’s budget director David Stockman calls GOP tax cuts delusional, Teresa Albano, New York Times | NY
In an eye-opening, and at times hard-hitting article in Sunday's New York Times, President Reagan's budget director has slammed today's Republican Party for pushing to extend Bush-era tax cuts for the super-rich.

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Undocumented immigration: paying the price of NAFTA

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  • A study published by the Carnegie Endowment for International Peace in December 2009 explains how this worked out in practice. ("Rethinking Trade Policy for Development: Lessons from Mexico under NAFTA")
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  • The Economics of Immigration Reform
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Emile Schepers, People's World

The rationale for NAFTA (North American Free Trade Agreement), which came into force Jan. 1, 1994, was Ricardian (after the Anglo-Italian classical economist David Ricardo, who thought that each country should specialize in the production that most suited its climate and other characteristics).

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Much of Mexico's rural population was engaged in maize and wheat farming, which is much more productive in the vast plains of the central United States and Canada than in Mexico's more rugged terrain. So the idea was to push the grain farmers off the land and move them into specialized fruit and vegetable farming, and into manufacturing which was supposed to be attracted to Mexico by the cheap labor of displaced farmers.

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The Economics Of Immigration Reform, Matt Corley and others, Think Progress
While anti-immigrant groups use anecdotal evidence to erroneously claim<http://cis.org/UnemploymentAmongNativeWorkers>  that legalization would be disastrous for the American worker, passing comprehensive immigration reform would not only strengthen the labor market, it would promote needed economic growth.

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Summary: America's Financial Crisis: Week of August 1

3 New Items including:

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  • Trickle Down Economics doesn't work
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  • Not Too Big Enough
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David Culver, ed., Evergreene Digest

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Jim Day

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Trickle Down Economics doesn't work says Alan Blinder. Here’s what does. Posted by rmontero, AlterNet

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  • Redirecting money from the expiring Bush tax cuts to unemployment benefits would be a net job creator and give the economy a much-needed boost.
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  • Long-Term Economic Pain
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Long-Term Economic Pain, Bob Herbert, New York Times | NY

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  • Simply stated, more and more families are facing utter economic devastation: completely out of money, with their jobs, savings and retirement funds gone, and nowhere to turn for the next dollar.
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  • Reich and Krugman Agree: The Government Needs to Forget About the Deficit and Fix Unemployment
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  • Krugman: US "Depressed Economy" Could Last 5 Years
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Not Too Big Enough, Rob Larson, Dollars & Sense

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  • How the “too-big-to-fail” banks got that way, and why the current banking reform won’t solve the problem.
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  • US Financial Reform Bill Misses the Mark
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  • Standing Up to the Unholy Alliance Between Washington and Wall Street
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Trickle Down Economics doesn't work says Alan Blinder. Here’s what does.

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  • Redirecting money from the expiring Bush tax cuts to unemployment benefits would be a net job creator and give the economy a much-needed boost.
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  • Long-term Economic Pain
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Posted by rmontero, AlterNet

Top Economist Alan Blinder wrote this article last week supporting letting the Bush tax cuts on the rich expire.

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The Basic idea behind it is that an unemployed person or a lower income person will spend any extra money he gets right away (he doesn’t have a choice) and thus stimulate the economy, whereas a rich person will save it and thus not stimulate the economy.

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One thing that’s left out in almost all discussions is class. Most of the rich people that received the Bush tax cuts will make most of their money through investments and controlling businesses for a profit, most of the poor make their money on their labor. Any sound businessman knows the way you make a profit is to spend the least amount of money while profiting the most, any of the money you give to businessmen will be used to make them more money. That money won’t trickle down, hiring won’t increase simply because those doing the hiring have more money, hiring will only increase if those doing the hiring must hire more in order to make more profit, which will only happen when demand increases.

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Long-Term Economic Pain, Bob Herbert, New York Times | NY

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  • Simply stated, more and more families are facing utter economic devastation: completely out of money, with their jobs, savings and retirement funds gone, and nowhere to turn for the next dollar.
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  • Reich and Krugman Agree: The Government Needs to Forget About the Deficit and Fix Unemployment
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  • Krugman: US "Depressed Economy" Could Last 5 Years
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