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Robert Reich: The Zero Economy

Evans Liberal Politics
September 3, 2011

 

Robert Reich: The Zero Economy

The Zero Economy, Robert Reich.org, September 2, 2011, by Robert Reich, used with permission, quoted verbatim:

The Bureau of Labor Statistics reports today no jobs were created in August. Zero. Nada.

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Well, not quite. The strike at Verizon reduced the labor force by 45,000. Minnesota government employees returned to work, adding 22,000. So in reality, America added 23,000 jobs. Almost zero.

In reality, worse than zero. We need 125,000 a month merely to keep up with population growth. So the hole continues to deepen.

Since this Depression began at the end of 2007, America’s potential labor force – working-age people who want jobs – has grown by over 7 million. But since then the number of Americans with jobs has shrunk by more than 300,000.

If this doesn’t prompt President Obama to unveil a bold jobs plan next Thursday, I don’t know what will.

The problem is on the demand side. Consumers (whose spending is 70 percent of the economy) can’t boost the economy on their own. They’re still too burdened by debt, especially on homes that are worth less than their mortgages. Their jobs are disappearinig, their pay is dropping, their medical bills are soaring.

And businesses won’t hire without more sales.

So we’re in a vicous cycle.

Republicans continue to claim businesses aren’t hiring because they’re uncertain about regulatory costs. Or they can’t find the skilled workers they need.

Baloney. If these were the reasons businesses weren’t hiring – and demand were growing – you’d expect companies to make more use of their current employees. The length of the average workweek would be increasing.

But the length of the average workweek has been dropping. In August it declined for the third month in a row, to 34.2 hours. That’s back to where it was at the start of the year – barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009).

It’s demand, stupid.

So what does a sane nation do when the consumers and businesses can’t boost the economy on their own?

Government becomes the purchaser of last resort. It hires directly (a new WPA and Civilian Conservation Corps, for example). It helps states and locales, so they don’t have to continue to slash payrolls and public services. (The help could be structured as a loan, to be repaid when unemployment drops to, say, 6 percent.)

And it hires indirectly — contracting with companies to rebuild our crumbling infrastructure, including school buildings, to take another example.

Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need – generating more jobs.

Get it? Not exactly rocket science.

So why don’t Republicans get it? Either they’re knaves – they want the economy to stay awful through next Election Day so Obama gets the boot. Or they’re fools – they’ve bought the lie that reducing the deficit now creates more jobs.

Every time you hear anyone say we’re “broke” or “can’t afford to spend more,” tell them we’ll be in worse shape if we don’t. If the economy remains dead in the water, the ratio of public debt to GDP balloons.

And remind them that the federal government can now borrow at fire-sale rates. Interest on the ten-year Treasury bill is 2 percent.

Do you hear me, Mr. President? Please — be bold next week. And if, as expected, Republicans refuse to go along, take it to the people. Mobilize the public. Use the bully pulpit. That’s what you have it for.

One more thing, Mr. President. You also have to tackle inequality. When so much income and wealth continues to flow to the very top, America’s vast middle class still won’t have enough purchasing power to boost the economy. Priming the pump is necessary but won’t be sufficient without enough water in the well.

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Robert Reich was the nation’s 22nd Secretary of Labor under Bill Clinton and is Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations. In 2008, Time Magazine named him one of the Ten Most Successful Cabinet Members of the century. He has written eleven books, including “The Work of Nations,” which has been translated into 22 languages. His recent book is “Supercapitalism.” For Professor Reich’s book page for Supercaptialism at Amazon, go here. Reich’s newest book, Aftershock: The Next Economy and America’s Future has been released September 21, and is available for ordering at this link (Amazon.com). The above article is from Reich’s new blog, and can be viewed here.

Robert Reich’s commentaries are available for listening to at Publicradio.com. Watch the video Aftershock: The next economy and America’s future (about his new book). Thanks to Professor Reich for permission to publish his articles on an ongoing basis.

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Going Populist? Dems Put GOP On Spot Over Tax Benefits For The Super-Rich

Evans Liberal Politics
July 2, 2011

 

Going Populist? Dems Put GOP
On Spot Over Tax Benefits
For The Super-Rich

Going Populist? Dems Put GOP On Spot Over Tax Benefits For The Super-Rich, Talking Points Memo, July 1, 2011, by Brian Beutler, excerpt quoted verbatim:

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Several weeks after Republicans and Democrats began high-level negotiations to slash federal spending by trillions of dollars — the GOP’s price for raising the national borrowing limit, and avoiding a catastrophic debt default — Democrats finally peeped up. New tax revenues, of some kind, of some amount, would have to be part of the deal.

The group, led by Vice President Joe Biden, had already identified nearly $2 trillion in cuts to discretionary and mandatory spending programs — nearly enough to raise the debt limit through the end of 2012 and take a contentious issue off the table this election season.

That’s when Democrats said, “your turn to give!” and put $400 billion in tax cuts on the table. Republicans balked. No tax hikes at all. Some Republicans have left the door open to closing certain indefensible loopholes. But party leaders have tried, for all intents and purposes, to take the tax code off the table. Cuts only.

The Democrats’ response, from the rank and file up to President Obama, has been a political twofer. If Republicans are taking all taxes off the table, then they’re playing reverse Robin Hood — demanding trillions in cuts to social programs while refusing to budge on preferences to unfathomably wealthy special interests. It’s class war, but in tactical sense. If they can make the GOP feel so uncomfortable that they agree to end special tax favors for the ultra-wealthy — even if those favors don’t ultimately cost that much money — then maybe they can break the anti-tax firewall and encroach on $400 billion. ….

Read the full article, here.

Washington Post – Eugene Robinson: Don’t Make the Economy Worse

Evans Liberal Politics
June 29, 2011

 

Washington Post – Eugene Robinson:
Don’t Make the Economy Worse

Don’t Make the Economy Worse, The Washington Post, June 27, 2011, by Eugene Robinson, excerpt quoted verbatim:

There is no good reason for negotiations on the budget and the debt ceiling to be deadlocked, because the solution is obvious: First, do no harm.

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The Hippocratic injunction should be something befuddled economists and warring politicians can agree on. With the nation struggling to recover from a devastating recession, unemployment stuck at crisis levels, financial markets spooked by the possibility of European defaults and consumers disinclined to consume, it makes no earthly sense to suck money out of the economy.

Democrats are right that this is a terrible moment for spending cuts. Republicans are right that this is an awful moment for tax increases. The only reasonable thing to do is kick the can down the road — but in a purposeful, intelligent way.

As a practical matter, this means Republicans must swallow an increase in the debt ceiling, and Democrats must accept painful spending curbs that kick in when the economy is off its sickbed. It means conservatives have to be patient in bringing expenditures down and progressives have to be patient in returning tax rates — even for the wealthy — to what many of us consider appropriate levels. ….

Read the full article here.

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Buzz Around the Internet has Republicans on the Run over Ryan Plan to privatize, phase out Medicare

Evans Liberal Politics
May 30, 2011

 

Buzz Around the Internet has Republicans
on the Run over Ryan Plan to privatize, phase out Medicare

News and Analysis on the Ryan Plan to Dismantle Medicare

Evans Liberal Politics, May 30, 2011, compiled with commentary by Paul Evans:

Senate Rejects House GOP Medicare Plan by 57-40 Vote, NY Times on Truthout, May 25, 2011, by Jennifer Steinhauer:

Washington – Less than 24 hours after their upset victory in the race for a vacant House seat, Democrats sought to press their advantage on Wednesday, forcing Republicans in the Senate to vote yes or no on what is emerging as the defining issue in the early stages of the 2012 campaign, the plan advanced by House Republicans to reshape Medicare.

The Republican plan was defeated by a vote of 57-40, with five Republicans abandoning their party to vote against the plan. The five Republicans voting against were Senators Scott Brown of Massachusetts; Susan Collins and Olympia Snowe of Maine; Lisa Murkowski of Alaska and Rand Paul of Kentucky.

In fact, the reason Rand Paul voted against the Republican plan was that, in his opinioon, it didn’t go far enough. Presumably there would still be too many grandmas getting medical care to suite Mr. Paul’s taste.

Medicare overhaul proposal causing GOP stress, AP on MSNBC, May 25, 2011, by David Espo:

WASHINGTON — Little more than a month after they backed sweeping changes to Medicare, Republicans are on the political defensive, exhibiting significant internal strains for the first time since last fall’s election gains.

Rep. Paul Ryan, R-Wis., says he is open to changes in his plan.

Considering the recent history of Republican willingness to compromise, a statememt to the effect that Ryan is open to changing the G.O.P. proposal represents an unusual concession, signaling that the Republicans are on the run on this issue.

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View a vote breakdown on the vote to halt the Republican plan, at NY Times Inside Congress.

See Democrats Put G.O.P. on Spot as Medicare Plan Fails, May 25, 2011, by Jennifer Steinhauer.

With polls and angry town hall meetings suggesting that many voters were wary of a Medicare overhaul if not opposed, party unity and optimism have given way to a bit of a Republican-on-Republican rumpus.

House leaders have made clear they will not try to pass Medicare legislation this year. Some Republican candidates and elected officials have moved to distance themselves from the plan, even as others remain in chin-out defense of it and others still are declining to commit themselves one way or another.

See Senate Rejects Ryan Budget, The Huffington Post, May 25, 2011, by HuffPostHill:

"The Republican plan to kill Medicare is a plan to make the rich richer and the sick sicker," Harry Reid said before the vote, channelling his inner Alan Grayson, repeating the phrase "Republican plan to kill Medicare" over and over. GOP moderates Olympia Snowe, Susan Collins, Scott Brown and Lisa Murkowski broke ranks and voted against the Ryan proposal, along with Rand Paul….

Sharing Costs Is No Way to Fix Medicare, Bloomberg, May 24, 2011, by Peter Orszag:

While more consumer cost-sharing would help reduce unnecessary care, the plan would not live up to its billing in cutting health costs for America. According to the nonpartisan Congressional Budget Office, it would do the opposite. That’s right: The CBO found that the Ryan Medicare proposal would substantially increase total health-care spending.

Also in the News on Medicare and Health Care

Medicare: “Biggest Deficit Driver” or “Solution” to Economic Recovery?, Daily Kos on Truthout, May 29, 2011, by Michele Swenson.

Republican governors move ahead on health exchanges, Politico, May 29, 2011, by Sarah Kliff.

What You Should Know About What Republicans Want To Do To Medicaid, Campaign for America’s Future, May 27, 2011, by Terrance Heath.

Also See Paul Ryan: The Republican budget isn’t unpopular, just misunderstood, Daily Kos, May 11, 2011, by Joan McCarter:

Earlier this week a “senior Republican strategist” declared that the problem wasn’t that Republicans wanted to end Medicare, but that “Republicans haven’t messaged it well.” See, just fix the message on abolishing Medicare and it’ll be fine.

Apparently that’s the narrative that Republican’s have settled on to explain away their Medicare debacle.

No. Sorry Repugs. You don’t have a communications problem. As the folks over at AMERICABlog correctly conclude, you have a political problem. A big political problem wherein your stance on Medicare, Medicaid and Social Security is going to come back and bite you in the ass. That kind of problem. ~ Paul Evans

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David Axelrod On Sanctioning Secretly Funded Groups: It’s Not Healthy ‘But It’s The System We Have’

Evans Liberal Politics
May 4, 2011

 

David Axelrod On Sanctioning Secretly Funded Groups:
It’s Not Healthy ‘But It’s The System We Have’

Democrats up the ante in head to head
competition with the G.O.P. to raise funds for 2012

David Axelrod On Sanctioning Secretly Funded Groups: It’s Not Healthy ‘But It’s The System We Have’, The Huffington Post, May 1, 2011, by Sam Stein: Evans Liberal Politics would like to thank Mr. Stein for permission to republish his work on an ongoing basis.

Look for Sam Stein, Robert Reich; DemFromCT, Bob Swern, Joan McCarter & MinistryOfTruth from Daily Kos; plus news from AlterNet, Truthout & Campaign for America’s Future and articles from out partner The Raw Story on Evans Liberal Politics, your source for U.S. liberal news and politics.

Here at Evans Liberal Politics, our problem is not finding insightful, cutting edge journalism to report for you. Paul Evans, the sole owner and operator of this site was forced by poverty to take an actual job out in the marketplace, so that he simply does not have all that much time to work on the news. We really need someone out there to step up to the plate and help us provide my readers with the news we want to give them. If interested in working for us please email me or call 330-262-0571 anytime. We would be happy to train you and enthusiasm counts for more than experience. Thanks ~ Paul

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Sam Stein: WASHINGTON — David Axelrod, the president’s senior communications adviser, spent much of the 2010 election cycle warning against the rise of anonymously funded, conservative non-government groups, going so far as to frame them as a threat to democracy itself.

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On Sunday, he blessed the emergence of those same organizations on the Democratic side of the aisle, calling it a bitter but necessary pill to swallow for both the party and campaign finance reformers.

“Let’s be clear,” Axelrod said on “Meet the Press.” “This independent group that was formed was formed in response to the ones that spent hundreds of millions of dollars in the last campaign to defeat Democratic candidates [with] undisclosed, large contributions. And we tried to pass a law [the DISCLOSE Act] through the Congress that would force … all groups to disclose who was giving them the money so the public could see. It got 59 Democratic votes in the United States Senate, 41 Republicans blocked it. And so, of course, now there’s a reaction to what happened, because Democrats are sitting there saying, ‘We can’t play under two sets of rules.’ … We should walk down to Capitol Hill and urge them to pass the law and that will govern both Republicans and Democrats and everybody will be playing under one set of rules.”

“I don’t think this is healthy,” he added. “I don’t think this is good. But it is the system we have. And you can’t expect one side to operate under one set of rules and the other side to operate under another.”

The idea that Democrats are leaning on outside government groups as a response to being flooded by them in 2010 does, in some respect, ignore the massive amounts of money union groups put into those midterm races. For campaign finance reform advocates — chief among them former Sen. Russ Feingold (D-Wisc.) — it also strikes a poor strategic note: forfeiting the political advantages that come with the moral high ground.

But for the White House and allied officials and campaign committees, it’s not all that difficult a decision. The potential to run tens of millions of dollars worth of television ads attacking Republican candidates is obviously alluring. But so is the capacity to sustain a major opposition research operation, which, according to officials familiar with the plans for these outside groups, will be an organizational imperative for the presidential cycle.

See Russ Feingold: Priorities USA ‘Playing With The Devil’, The Huffington Post, April 29, 2011, by Sam Stein.

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Doing the Right Thing and Leadership versus Pragmatism and Bipartisanship

Evans Liberal Politics
April 10, 2011

 

Doing the Right Thing and Leadership
versus Pragmatism and Bipartisanship

An Open Letter to President Obama

Evans Liberal Politics, April 10, 2011, Commentary by Paul Evans; as featured on OpEdNews:

Mr. President, most liberals and progressives that I know are pretty disappointed in your leadership and your “politically correct” bipartisanship. I believe that I, as well as many political observers, understand your mindset and that you have compared and found similar the elections of 2010 and 1994, and drawn the “obvious” conclusions from that comparison. Ah, but we have to be pragmatic, Mr. President, right? We mustn’t ignore the political realities. And above all, we must appear to be bipartisan, right now, and move towards the center. Even if morality gets thrown under the bus. Right, Mr. President? Democratic politics as usual. NOT change. Not actually moral politics.

As one who expected a moral progressivism from you, and real leadership, I am, like the author of Ignore This, Mr. President. You Already Ignore Me., Daily Kos, April 9, 2011, by teacherken, bitter and disappointed. Like a black slave 160 years ago, almost, Mr. President, the poor and the politically knowledgeable liberals and progressives in this country are crying out, “How long, Oh, Lord??” When will we get a President (and a Congress???) who will do the morally correct things which need to be done, regardless of money, and influence, and “political reality.” When will liberals and progressives and the American people find their second Lincoln? When, indeed.

Mr. President, you’re not leading. You are going with the flow, attuned to the current “political reality,” and you are abandoning what is right, what is liberal or progressive, abandoning justice for the people, and simply not fighting for them: you are just making compromises, pragmatically. It just isn’t right, and I expected much more.

I believe you will see in your reelection campaign a lack of enthusiasm, a dearth of volunteers, and you will blame it on the political climate. No, Mr. President. If you acted for what is right — and I KNOW you know what that is, and actually believe in that — your numbers would be fine. And then we would follow you to hell. As it is, people are actually talking about a man like Mitt Romney or Newt Gingrich challenging you. Ask yourself why that is, and you may see that you have taken the wrong approach, and have been coming up with the wrong answers and strategies.

Do the right things, regardless, and the nation would rally behind you. Or go down in history as an “average” President. Your choice.

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Shutdown: The Political War In Washington

Evans Liberal Politics
April 1, 2011

 

Shutdown: The Political War In Washington

Shutdown: The Political War In Washington, Common Dreams.org, March 31, 2011, by Danny Schechter, quoted verbatim under Creative Commons 3.0 license:

Forget Libya; the real bombing is underway elsewhere. Pay less attention to Pakistan; the drone attacks there pale in comparison.

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The real US war is about to erupt in Washington pitting those who believe government has a necessary role to play and those determined to weaken it.

The former understand that, without regulations, without rules, without programs for those in need, we could have a system collapse — perhaps even an uprising — that will make Wisconsin look like a real tea party.

But America’s would be political suicide bombers could care less. They are on a holy our-way-or-the-highway mission.

What would a shutdown mean? The Boston Globe calls it a “downshift”:

A federal ‘shutdown’ is more like a massive downshift — the federal government reaches too deeply into the crevices of daily American life to close. Social Security payments would still be made. Air traffic controllers would scan the skies. The mail should arrive at the doorstep.

There are problems; apparently no one realized in the last shut down when the National Institute of Health was closed, no one was left to feed the lab animals. Ah, but who cares about them?

You can be sure the Republicans won’t defund the military in part because their operation is run like a military campaign complete with deceptive propaganda and iron discipline.

Already conservatives are blaming Democrats for the problem, and, naturally praising themselves.

Here’s House Majority Leader Eric Cantor, “House Republicans continue to offer serious solutions to get our fiscal House in order, but we cannot keep doing it alone. If Senators Reid and Schumer insist on shutting down the government because they want to protect every last dollar and cent of federal spending then that will be on their hands.”

Democrats like New York’s Schumer are firing back by calling them “extreme.” “Instead of lashing out at Democrats in a knee-jerk way, we hope House Republicans will finally stand up to the Tea Party and resume the negotiations that had seemed so full of promise.”

Each party is blaming the other. Each deploys message points. Each acts sanctimoniously.

And, as the Zogby Poll illustrates, the public is, predictably confused.

Voters are split on whether they are concerned about a possible government shutdown, and if they agree that a temporary shutdown would be a good thing because it will force spending cuts. Democrats, however, are much more likely than Republicans to be concerned and much less likely to think it would be a good thing.

It’s an institutional failure, not just a political one. In the end, if negotiations fail, America’s least approved institution, the Congress itself, will find itself rejected and disrespected by more Americans.

Make no mistake: behind the rhetoric, the hard-line ideological right is on a war footing. They don’t care who they will hurt, and are hell bent in shutting down the government, in defunding any programs Democrats like or people need. They are not into compromise, conciliation or even dialogue.

In response, the center operates more like the flabby do gooders of the Salvation Army, trying to save what it can, trying to keep their unraveling coalition together, compromising and colluding with whomever it can.

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In contrast, the right is more like a more muscular Marine Corps, determined to seize that hill, in this case, Capitol Hill. They are, in one sense, true Jihadists in suits, on a mission from God, and in this case, the great deity’s chosen representatives on earth like the Billionaires, Koch Brothers and Rupert Murdoch.

This is not about Money; it is about Power. And it is coming to a head soon. Each party is scurrying to get the best deal but a large number of diehards have wrapped themselves in “live free or die” banners and are willing to take the government down with them.

It is a calculated tactic, akin to holding the country hostage, by creating a crisis that only they can solve, when their opponents cave into their demands, that is.

In essence it says to pols in Washington; do what we demand or we take your government away.

Writes David Johnson of the GOP:

Their election strategy for 2010 was to obstruct everything and keep the economy from creating jobs, and then blame Democrats. It worked. So now they’re doing it even more. But is that the whole plan? In every instance Republicans are obstructing the very things that can help the economy recover and provide the jobs people need. Everything they do is aimed at making things worse. It is hard to understand their actions except as a systematic attempt to blow up the economy.

Thomas Frank called Republicans the “Wrecking Crew” in a book of the same name well before they were able to beat up on a flabby, dispirited and poorly organized Democratic Party led by a President who wants to be everyone’s friend. Time Magazine said of his book:

Frank offers one damning anecdote after another. The Wrecking Crew explains how cynical conservatives have wrested control of the government by railing against its very existence, all while using federal perches to funnel billions into the pockets of lobbyists and the corporations they represent.

As Steve Koss explains:

According to Frank, the conservative worldview is totally committed to “the ideal of laissez faire, meaning minimal government interference in the marketplace, along with hostility to taxation, regulation, organized labor, state ownership, and all the business community’s other enemies.”

The conservative movement promotes the interests of business exclusively over all else in accordance with the motto, ‘More business in government, less government in business.’ So-called ‘big government,’ also tagged as the liberal state, is the enemy; in fact, virtually all government is the enemy, other than the national defense.

That said, where are we now?

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The Daily Beast reports:

Senate Democrats are preparing to offer $20 billion in new spending cuts in order to avoid a government shutdown- but will it be enough for the Tea Party? (DS: They are now up to $30 B) The offer, which is Democrats’ highest yet, comes on top of $10 billion in cuts that have already been enacted. The House GOP, however, has so far stood by its demand for $61 billion in cuts as it faces pressure from the Tea Party activists. Congress returns from recess Monday and has until April 8 before funding runs dry.

On the sidelines is an emboldened Wall Street, “resurrected” in the words of the National Journal, into “a global financial elite even less under U.S. control than before the crash.” Its many lobbyists are hard at work toning down the rules that will govern the financial reform bill.

They are shifting their political money to Republicans, some even recognizing that the Tea Party is their best friend all in the name of the “free: (sic) market.”

Welcome to the age of stalemate and paralysis with the tone still set by an ever so cautious President who still hopes to make a deal rather than fight for his program. He is watching the polls— not listening to the cries of his supporters.

Contrast Obama’s failure to explain the real challenge with the stand taken by President Franklin Roosevelt in 1936. (He was re-elected three more times), condemning “business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, (and) war profiteering.”

FDR said then, “We know now that Government by organized money is just as dangerous as Government by organized mob.”

The times have changed, although the conflicts that surfaced in the 1930’s are surfacing again as economic inequality grows and cutbacks intensify. A half a million people took to the streets in London last week. Don’t think the same or more can’t happen in the USA.

A last minute deal is likely to get done with more compromise on the left and more gloating on the right.

Who will get hurt? Not the wealthy, that’s for sure. But these issues, and this conflict are here to stay with or without a last minute compromise or a sell-out by Democrats.

Mediachannel’s News Dissector Danny Schechter investigates the origins of the economic crisis in his book Plunder: Investigating Our Economic Calamity and the Subprime Scandal (Cosimo Books via Amazon). Comments to dissector@mediachannel.org

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