President Obama: Wealth Inequality Is 'defining challenge of our time'

President Barack Obama delivers remarks on economic mobility during
an event hosted by the Center for American Progress at
Town Hall Education Arts Recreation Campus in Washington, D.C.,
Dec. 4, 2013. (Official White House Photo by Chuck Kennedy)

President Obama spoke against the widening gulf of wealth that has transformed the United States into a third-world nation in many parts of the country.

This development of vast wealth inequality is by design, with new mobilizations by a radicalized GOP, the Koch brothers and the politicized far-right that have seen the fruit of its long struggle seeking unresponsive rule of our democratic republic.

Can anyone even imagine a Republican speaking against wealth inequality or reckless Wall Street? How about quoting Abe Lincoln: "all that serves labor, serves the nation. All that harms labor is treason."

From Megan Slack at the White House

Today in Southeast Washington, DC, President Obama spoke about what he called the defining challenge of our time: reversing a decades-long slope toward growing inequality and a lack of upward mobility. It's a trend that has jeopardized middle-class America’s basic bargain, the idea that if you work hard, you have a chance to get ahead.

In the years after World War II, America built the largest middle class the world has ever known, President Obama said. 

[D]uring the post-World War II years, the economic ground felt stable and secure for most Americans, and the future looked brighter than the past.  And for some, that meant following in your old man’s footsteps at the local plant, and you knew that a blue-collar job would let you buy a home, and a car, maybe a vacation once in a while, health care, a reliable pension.  For others, it meant going to college -- in some cases, maybe the first in your family to go to college.  And it meant graduating without taking on loads of debt, and being able to count on advancement through a vibrant job market.

“Everyone’s wages and incomes were growing,” President Obama said “And because of upward mobility, the guy on the factory floor could picture his kid running the company some day.”
But by the late 1970s, this social compact began to unravel as jobs began to disappear and our economic foundation weakened. Inequality started to grow, and it got harder for children of lower-income families to move upward. Today, a family in the top 1 percent has a net worth 288 times higher than the typical family. And a child born in the top 20 percent has about a 2-in-3 chance of staying at or near the top, while a child born into the bottom 20 percent has a less than a 1-in-20 shot at making it to the top.
“The idea that so many children are born into poverty in the wealthiest nation on Earth is heartbreaking enough,” President Obama said.

But the idea that a child may never be able to escape that poverty because she lacks a decent education or health care, or a community that views her future as their own, that should offend all of us and it should compel us to action.  We are a better country than this.
So let me repeat:  The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American Dream, our way of life, and what we stand for around the globe.

“We can make a difference on this,” President Obama said. “In fact, that’s our generation’s task -- to rebuild America’s economic and civic foundation to continue the expansion of opportunity for this generation and the next generation.”
The President said that this is the reason he ran for office.

I take this personally. I’m only here because this country educated my grandfather on the GI Bill. When my father left and my mom hit hard times trying to raise my sister and me while she was going to school, this country helped make sure we didn’t go hungry.  When Michelle, the daughter of a shift worker at a water plant and a secretary, wanted to go to college, just like me, this country helped us afford it until we could pay it back.
So what drives me as a grandson, a son, a father -- as an American -- is to make sure that every striving, hardworking, optimistic kid in America has the same incredible chance that this country gave me. It has been the driving force between everything we’ve done these past five years.  And over the course of the next year, and for the rest of my presidency, that’s where you should expect my administration to focus all our efforts.

In his remarks, President Obama laid out a few key principles to help guide our efforts in expanding opportunity. Read them here, or watch the full speech below.

Poll: Country Behind Obama

And over 90 percent view the economy as important, a historical high.

RON FOURNIER and TREVOR TOMPSON:

WASHINGTON – For the first time in years, more Americans than not say the country is headed in the right direction, a sign that Barack Obama has used the first 100 days of his presidency to lift the public's mood and inspire hopes for a brighter future.

Intensely worried about their personal finances and medical expenses, Americans nonetheless appear realistic about the time Obama might need to turn things around, according to an Associated Press-GfK poll. It shows most Americans consider their new president to be a strong, ethical and empathetic leader who is working to change Washington.

Now is the time to play some long ball, throw some Brett Farve passes. Let Fox and the rightwing culture warriors squeal all they want; no one cares about them anymore.

You Can't Handle the Truth

Secrecy is not playing well, nor should it. Check out the Tech Ticker video, especially the last 20 seconds.

Also from Tech Ticker:

A New York Times story, citing officials involved in the government's stress test, which declares 'all 19 banks undergoing the exams will pass them. '

This point ... is a continuation of what many believe is a hoax (or outright crime) being perpetrated on the American people by its government.

How do we know? One thing is certain: Trust is not an option.

S&L Crisis Reformist: Gov-Industry Cover-Up Is Huge

Update: Black's response can be read at Black's response to bloggers.

William K. Black, senior regulator during the 1980s S & L crisis and associate professor of economics and law, says the government understates the immense scale of exotic financial products fraud and is lying about the current health of our financial system to prevent a meltdown.

Confidence is oxygen, pointed out Warren Buffett last October. I keep up my hope that Obama is simply rolling out the recovery program (and sparing us all the details) so as not to scare the hell out of everyone, thinking that the immediate effects of the recovery ought to be different than a shock-and-awe campaign. But secrecy doesn't exactly work well nor should it in democracies, right?

A rolled-out truth and outright lying don't work at all, in Black's view. Here's an excerpt from his interview with Bill Moyers broadcast last Friday night. About the scariest stuff on the crisis I have read yet:

WILLIAM K. BLACK: ... What would happen if after a plane crashes, we said, 'Oh, we don't want to look in the past. We want to be forward looking.' Many people might have been, you know, we don't want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. And here, we've got a double tragedy. It isn't just that we are failing to learn from the mistakes of the past. We're failing to learn from the successes of the past.

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn't matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, 'You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you're covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn't work. You will cause your recession to continue and continue.' And the Japanese call it the 'lost decade'. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It's working just as well as it did in Japan.

BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, 'We just can't let the big banks fail.' That's wrong.

BILL MOYERS: But what might happen, at this point, if in fact they keep from us the true health of the banks?

WILLIAM K. BLACK: Well, then the banks will, as they did in Japan, either stay enormously weak, or Treasury will be forced to increasingly absurd giveaways of taxpayer money. We've seen how horrific AIG -- and remember, they kept secrets from everyone.

Geithner Looks to Make Banks Lend and What Else

Update: Do read William K. Black on The Prompt Corrective Action Law, and Black's interview on the Bill Moyers show.

Geithner: We Won't Hesitate to Change Management at Banks; banks will lend or the bankers will be out of a job.

An increasing number of Americans will judge the policy addressing the banking crisis on the basis of how Americans are affected. Odd.

See Noam Chomsky on the economy and democracy. Plan is recycled Bush/Paulson. We need nationalization and steps towards democratization.

"When the Associated Press sent journalists to interview bank managers, investment firm managers, and asked them what they'd done with the TARP money [Troubled Asset Relief Program (TARP)], they just laughed. They said 'it's none of your business, we're private enterprises. Your task, the public, is to fund us, but not to know what we're doing. But the government could find out.'"

Much of the American public, veering into populism aka democracy, sees the financial managers as the incarnation of the voracious mafia chief, Fausti 'the Fist' Dellacava, in Jimmy Breslin's I Don't Want to Go to Jail.

The Fist often simplified questions over the allocation of resources by decreeing, "Give me all the money."