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corporate dominance | labor

The Financial System is Rigged in Favor of the Rich

"If the Federal Reserve had thought more about Main Street when it was bailing out the financial system, there might not be an Occupy Wall Street movement throughout the country today.The belief that the economic system is rigged in favor of the rich and powerful is an important factor driving OWS. This belief is based on the way in which the financial bailout was handled."
"Policymakers insulated banks from losses using the argument that protecting Wall Street would also prevent large losses on Main Street. But the bailout alone wasn't enough to prevent big problems on Main Street, and it came to be viewed as largely a giveaway to the wealthy interests controlling financial institutions.

It didn't have to be that way. Instead of bailing out banks directly, we could have given money to homeowners to help them pay their mortgages. The money could have been earmarked for mortgage payments so that it still ended up in the hands of banks, but by allowing the help to pass through households first, the distribution of the benefits from the bailout would be much different: Both households and banks would have realized gains, and this would have been much more politically acceptable.

However, monetary policy authorities do not generally place much weight on the distributional consequences of the policies they enact. With fiscal policy, the distributional implications of tax and spending changes - whether they fall on the poor, the middle class, or the wealthy - are an important element of the politics surrounding these policies."

MARK THOMA is a macroeconomist and time-series econometrician at the University of Oregon. His research focuses on how monetary policy affects the economy, and he has also worked on political business cycle models and models of transportation dynamics. Mark blogs daily at Economist's View  http://economistsview.typepad.com/

to read Mark Thoma's article published in: The Fiscal Times, November 8, 2011, click on

 link to www.thefiscaltimes.com

homepage: homepage: http://www.thefiscaltimes.com
address: address: http://www.buzzflash.com


What caused the financial crisis? The Big Lie goes viral. 09.Nov.2011 09:25

Barry Ritholtz

"One group has been especially vocal about shaping a new narrative of the credit crisis and economic collapse: those whose bad judgment and failed philosophy helped cause the crisis.

Rather than admit the error of their ways Repent! these people are engaged in an active campaign to rewrite history. They are not, of course, exonerated in doing so. And beyond that, they damage the process of repairing what was broken. They muddy the waters when it comes to holding guilty parties responsible. They prevent measures from being put into place to prevent another crisis.

Here is the surprising takeaway: They are winning. Thanks to the endless repetition of the Big Lie.

A Big Lie is so colossal that no one would believe that someone could have the impudence to distort the truth so infamously..."

to read Barry Ritholtz' article published in: The Washington Post, Nov 5, 2011, click on

 link to www.washingtonpost.com

capitalism 09.Nov.2011 18:02

mcbee

is rigged to favor capitalists.