If The Doctor Isn't Any Good, The Medicine Can Kill The Patient-- And Our Leaders ALL Pretty Much Suck

Late yesterday we stuck the above video onto the bottom of a post. If you already watched it, you don't have to do so again... although I hope you got all the way to the end, where they explain how similar the U.S. has become in terms of economic inequality to not just China, where "half the population are rural peasants, not part of the modern world" but to countries in sub-Saharan Africa-- where dictators are taking a lot of the wealth from normal people. "The U.S. has really reached an extraordinary level of income inequality."



Now, perhaps you've sensed a recurring DWT theme of late, namely that the mad rush to Austerity that our plutocratic overlords are forcing on the world is destroying social cohesion. This week former U.S. Labor Secretary and one of the last really good presidential economic advisors, Robert Reich points out that it is also ushering in a global recession. He's very clear why: "Austerity is the wrong medicine." But is anyone (besides David Frum) listening?

We all know about the weaknesses in Europe’s “periphery”-- Greece, Ireland, Spain, Portugal, and Italy. But the drop in Europe’s core is dizzying.



Germany grew at an annualized rate of just half a percent last quarter, down from 5.5 percent in the first quarter of the year. France didn’t grow at all.



What’s going on in Europe’s core? Partly it’s a loss of confidence due to debt crises in the periphery. But that’s hardly all.



Europe depends on exports-- especially to Asia, India, Latin America, and the United States. But exports to China and other emerging markets have been dropping. China, worried about inflation, has pulled in the reins on its sizzling economy. Brazil has been pulling back as well.



And as the United States economy sputters, exports to America have been slowing.



But chalk up a big part of Europe’s slowdown to the politics and economics of austerity. Europe-- including Britain-- have turned John Maynard Keynes on his head. They’ve been cutting public spending just when they should be spending more to counteract slowing private spending.



The United States has been moving in the same bizarre direction. Cutbacks by state and local governments have all but negated the federal government’s original stimulus, and no one in Washington is talking seriously about a second. The pitiful showdown over increasing the debt limit has produced the opposite: a Rube-Goldberg-like process for capping spending rather than increasing it, and a public that’s being sold the Republican lie that less government spending means more jobs.  



Yes, governments on both sides of the Atlantic are deeply in debt. But policy makers on both sides seem to have forgotten that economic growth is the most important tonic.



Public debt has meaning only in relation to a nation’s GDP. When more people are working, more companies are profiting, and economies are expanding, revenues pour into national treasuries.



When economies stop growing or contract, the opposite occurs. Economies can fall into vicious cycles of slower growth, lower tax revenues, spending cuts, and even slower growth.

That’s what we’re seeing now.



What’s worse, nations are so intertwined that when every major economy is slowing the cumulative effect is larger.



With anemic growth in America and Europe, the Japanese economy comatose, and emerging markets (including China) pulling in their reins, the vicious cycle could become worldwide. If global demand for goods and services continues to fall behind the potential supply we’ll see unemployment rise further and growth slow even more-- especially in Europe and the U.S.



Central banks may try to reverse this course. Ben Bernanke and company at the Fed have committed themselves to near-zero interest rates for the next two years (not exactly a rousing endorsement of America’s economic prospects in the near term). Given the sharp slowdown in Germany, the European Central Bank might now feel some pressure to lower interest rates there-- or at least delay the next increase.



But when growth is slowing so dramatically and unemployment is already high, monetary policy can’t possibly do it alone.



Without an expansionary fiscal policy, low interest rates have little effect. Companies won’t borrow in order to expand and hire more workers unless they have reasonable certainty they’ll have customers for what they produce. And consumers won’t borrow money to spend on goods and services unless they’re reasonably confident they’ll have jobs.



Fiscal austerity is the wrong medicine at the wrong time.

I voted for Obama and all I got was . . .

by Noah

. . . and all I got was this T-shirt. (If I cough up a mere $30, that is.)

Like many of you, I get a lot of mass e-mails asking me for money. Many of them come from politically progressive groups that can and do make good use of the money. Environmental groups? OK. Moveon.org? No problem. ActBlue? You bet.

Today’s e-mail, however, came from Juliana Smoot of the White House. It included an offer of a T-shirt in return for a contribution of $30 or more to President Obama’s 2012 campaign. Not that it’s a bad T-shirt or anything, but I expect more.

Forget the T-shirt! How about a president that doesn’t roll over for the Repugs and Wall Street, and tells his party not to roll over too? How about a president leading a Democratic Party that realizes they are dealing with absolute fascists that could make Mussolini rise from the dead with pride. Instead we have a party of Neville Chamberlain weenies. They are either naïve or in cahoots. I’m convinced, of course, that it’s the latter and no amount of money that I can afford to give the status quo politicians of the burgeoning New World Order is going to offset the bribery setup that is standard operating procedure in D.C.

I also get almost daily appeals from Blue Dog Dem stealth-Republican groups such as the DSCC and the DCCC who feel that I should contribute money for the reelection of fetid balls of slime with names like Ben Nelson, Heath Shuler, and Mary Landrieu just so they can have Democratic majorities that end up rubber-stamping the dark desires of Republicans anyway. Anyone remember Senator Schumer kissing John Roberts’s butt at his Supreme Court confirmation hearings. All that did was fast-track Citizens United. Thanks, Chuckie!

Apparently, the bribes from K Street and Wall Street just aren’t enough. Last I looked, no banksters or hedge-fund scum have been hauled into court. Can’t imagine why! Can’t jeopardize the status quo now, can we? Gotta keep those good middle-class jobs moving out of the country while Congress vacuums up all that nice green cash from the K Street Bribery Battalions! Nudge nudge wink wink. Ain’t NAFTA grand? Screw the people! But ask them for their money first.

You know, I happen to think that I and millions of other middle-class voters might have more to give these people if they would first do something about the massive wealth distribution upward that Washington has been engineering for decades; more specifically, our wealth. While the wealth of the top 1% has gone through the roof and productivity has climbed impressively, middle-class wages have stagnated for 30 years. And we all know that a dollar isn’t what it was back then! It’s obviously social engineering Washington can believe in. When it comes to Washington, money can buy a lot of belief. All you have to do is be amoral and fool enough voters into thinking that you are a respectable humanoid of good character.

Instead of a T-shirt, I, like so many people, think repealing the Bush tax cuts for the wealthy should be a good start. Stopping the war on the middle class in its tracks would work for me! Oh, and stopping some other wars might be good too. We seem to be spending more on building roads and schools in Afghanistan than we do here.

Afghanistan is reportedly costing us $2 billion a week -- $2 billion a week for schools where young girls aren’t welcome and roads that only serve to get Afghanistan’s drugs to world markets at a faster, more profitable pace. That $2 billion could go a long way here, including paying for some teachers at some new schools! Just tonight (as I write this), President Obama announced that he’s bringing home 10,000 troops. It was the least he could do, and he did it.

If people like Juliana Smoot could tell me that House Minority Whip Steny Hoyer had changed his mind and now says that Medicare should be off the table instead of on it, that would work for me too. If she could tell me that her boss had decided to tell Alan Simpson to shove his Cat Food anti-Social Security Commission up his sagging fat white-haired 90-year-old ass, that would also work for me. If all of these things were done, we middle-class suckers and pawns might even actually have enough money to spread around, even to politicians.

So, Washington, why ask me for money when you are not doing enough things that will help me save money or earn money? A dollar doesn’t even get me a quart of milk or half a dozen eggs anymore. Are there suddenly less cows and chickens? Now I have to think long and hard about buying some eggs to hurl at your limos!

To be fair, saving the auto industry and the 3 million related industry jobs along with it was damn good. Some minor improvements in the health care system may help, but no, it’s not enough, and I don’t buy that it’s the best you could do. Some of the improvements won’t even kick in until 2014, and that’s gonna be up in the air for awhile anyway.

What’s going on is that Washington is trying to get away with doing just enough to keep the wolf (us) from the door. That’s the system that's in place. Buying voters off with the offer of a T-shirt is very symbolic. It’s symbolic of the paltry amount of respect Washington has for those who live outside the Beltway. Sure, I’ll never have enough money to stay out of jail if I foul up an ocean with crude oil while 11 employees lose their lives like Tony Hayward did, but that’s not what we’re asking for.

Our so-called representatives get tens and ten- times-tens of thousands of dollars stuffed into their pockets every day, and the White House offers me a T-shirt. That’s rich. Pun intended. Hell, the T-shirt doesn’t even have a pocket. No pocket for me! Look. I know that Obama is better than any Republican and a Democratic Congress is marginally better than a Republican one, but that’s like saying Americans have a choice of two parties and it's a choice that one can equate with being given a choice of "what kind of cancer would you like?"

The Republicans will kill you and the whole damn country and smile about it as long as they get enough cash out of the deal. They are a disease. The Democrats, on the other hand, might keep you alive but it looks like the most they want to do is just enough to keep you in the state of misery you’re in. Put a kinder, gentler way: The Dems will give you a T-shirt for a cold day. The Repugs will rip the one you have off your back on the coldest day of the year while they give money that should go to your family to the top 1% instead, and they'll get the Dems to go along with it.

Some freedom of choice that is. Keep the T-shirt, Juliana, you can use it to wipe the eggs off the White House windows. Blue America isn't offering any fancy t-shirts in exchange for contributions... just actual real life progressives who will stand up to the right, like Eric Griego, Norman Solomon, and Nick Ruiz. Please take a look... and give them a hand.

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You can't have a bitchin' "austerity" movement without an International Conspiracy of Dunces -- meet Our Davy Brooks

Once upon a time, Doonesbury's Roland Hedley went spelunking in Reagan's brain. Would anyone have the courage to attempt the same quest in Our Davy Brooks's brain?

by Ken

I expect many of you have already seen this, but I don't think you'll mind looking at it again. (Sorry I can't provide a link. Somehow as of this writing it still doesn't seem to have been added to the Borowitz Report website. Well, there's a link!)

BOROWITZ REPORT
June 17, 2011

Greece Offers to Repay Loans with Giant Horse
Steed Wheeled Into Brussels at Night

BRUSSELS (The Borowitz Report) – In what many are hailing as a breakthrough solution to Greece’s crippling debt crisis, Greece today offered to repay loans from the European Union nations by giving them a gigantic horse.

Finance ministers from sixteen EU nations awoke in Brussels this morning to find that a huge wooden horse had been wheeled into the city center overnight.

The horse, measuring several stories in height, drew mixed responses from the finance ministers, many of whom said they would have preferred a cash repayment of the EU’s bailout.

But German Chancellor Andrea Merkel said she “welcomed the beautiful wooden horse,” adding, “What harm could it possibly do?”

I've intentionally led off with a light moment because, as promised, we're about to descend into the murky, incomprehensible depths of DavyBrooksWorld.

Just this morning on the radio I heard some pompous economic semiliterate, commenting on the Greek crisis, saying that we know how to deal with their debt problem but now we just lack the political will to do so. Of course what he means is that we know the forced-austerity technique, which transforms the ill-gotten gains of the financial players who've made out like bandits in the runup into a price to be paid by people who've gotten no benefit from it.

The "serious" people who tut-tut about the Social Security "crisis" tut-tut in exactly the same way. We know what has to be done; we just lack the political gumption to do it. Or the state budget crises raised to toxic proportion by the economic meltdown: Hoodlums like the new governors of Wisconsin, Florida, and Ohio know how to deal with it -- and they've got the political gumption to do what has to be done: "solve" the problems on the backs of people who didn't cause them, thereby protecting the movers and shakers who did, and in many cases got rich, or I should say richer, doing it.

I suppose if you just wanted to pick on Our Davy Brooks, you could equally well deconstruct every pile of manure Our Davy shovels onto the NYT op-ed page. The levels of stupidity and dishonesty are really that predictable.

I can think of several reasons why I've glommed onto the column he wrote last week, hailing an astonishing discovery, the most important discovery since the discovery of sunshine: that the economic meltdown was caused by . . . Freddie Mac! (Or maybe Fannie Mae, I forget which.)

First, I had a moment of instant revulsion when I noticed the blurb for that column (for which, on principle, I'm not going to provide a link; that seems to me just encouraging him) on the day's NYT e-newsletter. It didn't take a particularly keen olfactory detector to smell a turd. It looked to be, only three years late, yet another assault on the best scapegoat the Far Right has come up with to deflect blame from the class of movers and shakers whose private parts they live to lick.

Maybe too I was primed because I once made the mistake of allowing a wingnut commenter to drag me into his inexhaustibly "sourced" conviction that the true cause of the economic meltdown was the Community Reinvestment Act of 2008, by which the government held guns to the head of scrupulously honest bankers and forced them to lend money to vile scum of the criminally poor class (not very hidden subtext: overwhelmingly people of inappropriate skin pigment) for the purpose of sinking the economy. Of course those inexhaustible citations, if you look at them, turn out to be either just plain bogus or twisted-beyond-recognition distortions, all to buttress the ideological delusions they've made up in their head, all of which are totally impervious to facts, which the Far Right has come to consider its deadliest enemy.

Now my point here, and the reason I bring it up, is that this is exactly the way Our Davy Brooks works. His trick -- and I'm not equipped to say whether it's a stroke of genius or a stroke of luck -- is to wrap his ideological rigidities in a veneer of "centrism." But he practices "journalism" the way David Brock -- as he reported in Bllinded by the Right -- discovered was the standard practice of the Far Right pseudo-journalists he'd attached himself to, among whom he had made himself the shiningest star. It occurred to him rather belatedly that where actual journalists set out to find out what the story is, his people started out with the story fully written in their heads and then went out in search of anything they could find, or more likely twist, to seem to support it.

THE POINT IS NOT THAT FANNIE
AND FREDDIE ARE BLAMELESS

To start with, it appears that that book Our Davy read, well, he doesn't seem to have actually read it, just glommed onto the part that fits his ideological fixation. I'm told by people I trust a lot more than Our Davy that he ignored substantial parts of the book that dealt with the Fed, Wall Street, and nonbank financial parties.

More to the point, though, he's just got the Fannie-Freddie story wrong. Which is not to say that Fannie and Freddie don't deserve brickbats. Here's economist Dean Baker's take:

The trillions of dollars that the geniuses at the private investment banks funneled into the housing market were the force that inflated the bubble to its 2006 peaks. Fannie and Freddie were followers in this story, jumping into the subprime and Alt-A market in 2005 to try to maintain market share. They were not the leaders.

Just to be clear, Fannie and Freddie were serious bad actors. They are both huge companies that do nothing else but deal with housing. It is incredible that they did not recognize the housing bubble and take steps to try to deflate it, and protect themselves, before it grew to such dangerous levels.

Suppose that Fannie and Freddie started demanding appraisals of rental values and refused to buy any mortgage where the ratio of sale price to annual rent was higher than 20. This action by itself likely would have shaken some sense into the housing market. I said this back in 2002, when I first warned of the housing bubble and predicted the collapse of Fannie and Freddie. I also frequently criticized Fannie and Freddie in public forums, including debates with their chief economists. Unlike Brooks, I wasn't worried about non-issues as economic disaster loomed on the horizon.

However:

As much as Fannie and Freddie deserve blame for incompetence and corruption, no serious person can make them the main culprits in this story. The Wall Street crew made hundreds of billions on pushing fraudulent mortgages. Furthermore, if we had competent economists running the Fed, they would have been shooting at the housing bubble as early as 2002 also. This does not mean raising interest rates in an economy that was struggling to recover from the collapse of the stock bubble. (I'll say that again, since people have a hard time understanding "do not raise interest rates." The Fed should not have raised interest rates.)

If Greenspan had paid attention to the economy he would have had the Fed's staff devoted full-time to document the evidence for the housing bubble and he would have used every public appearance (e.g. congressional testimonies, public speeches, international forums) to warn of the risks posed by the housing bubble. He also would have used the Fed's full regulatory authority to police the mortgage issuing practices of the banks under its supervision. He also would have prodded other regulators to use increased scrutiny for the institutions under their control. (Greenspan was never shy about making suggestions to others.)

My guess is that these actions would have by themselves crashed the bubble and done so long before it grew to such dangerous levels. They would be essentially costless, so it is difficult to see why a vigilant Fed chair would not have followed this route.

It is difficult to believe that these actions would not have been sufficient to deflate the bubble. After all, the David Brooks of the world can ignore Dean Baker warning of the housing bubble, they cannot ignore the Fed chair issuing such warnings, backed up by endless Fed papers documenting the case.

But Our Davy has found his narrative, and restored the earth to its rightful axis. And people continue publishing and reading his gibberish.

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Who should we listen to, Marcy Kaptur or Our Davy Brooks? (Yes, but who'll GET listened to?)

Notice how grudgingly Rep. Marcy Kaptur (D-OH) is given the floor. Can't you just feel the rage, even the hatred, of Republicans forced to put up with the ravings of the crazywoman from Ohio? Fortunately, from their perspective, they know that no one's going to pay a damned bit of attention.

by Ken

Howie passed this video along from Nepal. (Our information "back channels" at DWT are way back.) He asked, "Does this appeal to you?" And by the time I got this far into Marcy's speech, I wrote back, "Not only does it appeal to me, it's perfect for the post I'm pulling together for 6pm dumping on David Brooks as part of the 'them' conspiracy. Here's somebody who ISN'T."

Now we even have a bill that's going to take food away from about 350,000 women and children. Now whose fault is that?

Here's a little note from somebody in my district. [Reads from a paper plate.] She says -- [waving paper plate] she signed up this plate at the food bank, the local food bank -- she says: "Without help from the food bank, I would be on the street. I struggle every day to make ends meet, so my kids have a place to lay their heads at night. I have a job, but with two kids it's still very hard. I have a lot of trouble paying rent, and bills. I just wish there were more help for parents like myself.

That's from the rural part of my district. From the urban part of my district [holding up another paper plate] and plate is signed at the food bank: "My income is spent on bills which leave very little money for me to purchase food for myself and my two daughters."

You know, the majority of people in this house are Christians, and I'm not pushing that, though I am one of them, but the First Beatitude says, "Feed the hungry." It doesn't say, "Rugged individualism." I'm as individualistic as anybody else in this chamber, but I'll tell you what, there's a heartlessness that goes with people who take everything for themselves and turn their back on the rest of the American people. So when Big Oil makes record profits and pays no taxes, there's something really wrong.

There's something really wrong with the country, and the American people know it. They didn't clean house here last November because they thought you were better. They just wanted a change. And they'll vote for it again if their lives don't get better, and their lives won't get better unless we fix what Alan Greenspan and Goldman Sachs and Bank of America and the whole rest of those buzzards up there did to this country.

And they're taking bonuses! In fact, they're making so much money, they take members of Congress out. You know the average amount of the meal? $193. $193 a plate. These folks [holding up the paper plates], a couple of bucks in a day they spend on food.

So I stand with the American people, not those wealthy interests who took the nation to the cleaners. . . .

Speaking of "who took the nation to the cleaners," you'll be thrilled to know that no less intrepid a detective than Our Davy Brooks has figured it out. And you know who it was? Freddie Mac!

As I suggested earlier, media dunce-whores like Our Davy are crucial to the corporatist juggernaut now running roughshod over non-plutocratic America.

And how does Our Davy know this? He read a book. Well, apparently he read part of a book -- the part that said what his dunce-whore ears wanted to hear. See, Our Davy "thought" (using the term in the very broadest possible sense), it wasn't the fault of the Godlike Rich People who make it possible for me to enjoy my scrumptious standard of living as their dunce-whore bitch!

But of course, as always, he's wrong. And it apparently doesn't bother the people at the NYT who have his checks cut that he's always wrong. People like Our Davy and the Rose Douchebag given them "balance" -- balancing their roster of moderates with right-wing dunce-whores gussied up to look like people with working brains.

We'll go more into the specifics of how Our Davy f**ked up this particular scoop tomorrow.

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"Austerity": the price we've gotta pay to keep the World's Greediest rollin' in dough

by Ken

From today's Washington Post:

Special Report: Breakaway Wealth
With executive pay, rich pull away from rest of America


By Peter Whoriskey

It was the 1970s, and the chief executive of a leading U.S. dairy company, Kenneth J. Douglas, lived the good life. He earned the equivalent of about $1 million today. He and his family moved from a three-bedroom home to a four-bedroom home, about a half-mile away, in River Forest, Ill., an upscale Chicago suburb. He joined a country club. The company gave him a Cadillac. The money was good enough, in fact, that he sometimes turned down raises. He said making too much was bad for morale.

Forty years later, the trappings at the top of Dean Foods, as at most U.S. big companies, are more lavish. The current chief executive, Gregg L. Engles, averages 10 times as much in compensation as Douglas did, or about $10 million in a typical year. He owns a $6 million home in an elite suburb of Dallas and 64 acres near Vail, Colo., an area he frequently visits. He belongs to as many as four golf clubs at a time — two in Texas and two in Colorado. While Douglas’s office sat on the second floor of a milk distribution center, Engles’s stylish new headquarters occupies the top nine floors of a 41-story Dallas office tower. When Engles leaves town, he takes the company’s $10 million Challenger 604 jet, which is largely dedicated to his needs, both business and personal.

The evolution of executive grandeur — from very comfortable to jet-setting — reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening.

For years, statistics have depicted growing income disparity in the United States, and it has reached levels not seen since the Great Depression. In 2008, the last year for which data are available, for example, the top 0.1 percent of earners took in more than 10 percent of the personal income in the United States, including capital gains, and the top 1 percent took in more than 20 percent. But economists had little idea who these people were. How many were Wall street financiers? Sports stars? Entrepreneurs? Economists could only speculate, and debates over what is fair stalled.

Now a mounting body of economic research indicates that the rise in pay for company executives is a critical feature in the widening income gap.

The largest single chunk of the highest-income earners, it turns out, are executives and other managers in firms, according to a landmark analysis of tax returns by economists Jon Bakija, Adam Cole and Bradley T. Heim. These are not just executives from Wall Street, either, but from companies in even relatively mundane fields such as the milk business. . . .

We've spent a fair amount of time here at DWT pondering this business of barely precedented economic inequality -- not so much the fact of it (except occasionally to set out some numbers to document it) as the fact that it goes on, and multiplies, with barely a whimper from the rest of us.

So I don't know that there's all that much in this WaPo "special report" on "breakaway wealth," except for (1) its appearance in the house organ of Village complacency, and (2) some additional nuts 'n' bolts documentation of the phenomenon.

PROJECTS FOR HOME STUDY

(1) Write a brief essay on the topic: Is it possible to run a dairy company from a domicile less exalted than a Dallas-market $6 million one? You may wish to consider what the absolute rock-bottom-price home is necessary for running a dairy company.

(2) Step 1: Find out the average salary for such sucker professions as schoolteacher, policeman, and firefighter and calculate the applicable compensation multiple for running a dairy company Dean Foods-style. Step 2: Write a brief essay on the topic: What makes running a dairy company Dean Foods-style worth XX [fill in the applicable figures from Step 1] more than schoolteaching, policing, and firefighting?


COMING UP: You can't have a bitchin' "austerity" movement without an International Conspiracy of Dunces -- meet David Brooks


Coming up in my 6pm PT post. Oh, quit moaning. There has to be a reason why he continues to write the stuff he continues to write -- and get paid, and taken "seriously."


SUNDAY CLASSICS SCHEDULE NOTE

The post on Berg's Wozzeck will appear at 2pm PT. It just worked out better for me schedule-wise that way.

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So you want to be a lawyer? Are you sure about that?

Looks like you don't have to worry
about that $275K, friend

"The grunt work in corporate litigation is being farmed out to contract attorneys. More and more law school graduates, steeped in student-loan debt, are settling for this unsteady, monotonous work for surprisingly low pay. WSJ's Vanessa O'Connell and Jason Bellini report."

-- blurb for the WSJ article
"Lawyers Settle . . . for Temp Jobs"

by Ken

A colleague smuggled this out from behind the WSJ paywall, and I'm still shaking my head over it.

I know, I know, we all have automatic responses to bad news for lawyers. (All of us who aren't lawyers, I mean.) "Serves 'em right!" "Nobody held a gun to their heads and forced them to become lawyers!" Still, I can't help thinking there's something wrong here, maybe something deeply wrong.

Lawyers Settle... for Temp Jobs
As clients seek to cut costs, the field of 'contract' attorneys expands

By VANESSA O'CONNELL

When he decided to become a lawyer, Jose Aponte followed a familiar path: He took the LSAT, spent more than $100,000 on law school, took a grueling bar exam and paid for continuing education.

But the work the 37-year-old New York lawyer, a graduate of American University's Washington College of Law, is getting is a far cry from the stable, lucrative type he originally envisioned.

Mr. Aponte is part of a growing field of itinerant "contract" attorneys who move from job to job, getting paid by the hour, largely to review documents for law firms and corporate clients. These short-term jobs, which can pay as little as $15 an hour, have increasingly become a fixture in the $100 billion global corporate legal industry as law firms and clients seek to lower their costs.

This new "third tier" of the legal world illustrates the commoditization of the legal profession, which once offered most new entrants access to prestige and power, as well as a professional lifestyle. It also shows how post-recession belt-tightening is permanently altering some professions.

For 10 to 12 hours a day—and sometimes during graveyard shifts—contract attorneys such as Mr. Aponte sit silently in a big room, at rows of computer monitors. Each lawyer reads thousands of documents online and must quickly "code" every one according to its relevance in litigation or an investigation.

Supervisors discourage talking and breaks are limited. The computer systems count each lawyer's speed. Some law firms use their own contract attorneys, while others hire them through third-party agencies.

The increasing reliance on temporary workers comes as the industry continues to struggle from a downturn that has produced a glut of unemployed U.S. lawyers, including crops of indebted recent law school graduates. About 10% of all private practice jobs accepted by last year's law school graduates were reported as temporary, a steady increase from 5.4% in 2007, according to the National Association for Law Placement.

Responses to a June survey of top legal officers, conducted for The Wall Street Journal by the Association of Corporate Counsel, a bar association for in-house counsel:

Approximately 34% of 876 respondents said their companies had used non-staff "contract" attorneys in the previous fiscal year.

The most common reason for their use was given as "project cost management," by 29% of those respondents using contract attorneys. About 26% said they were looking "to satisfy the need for a specific skillset." Another 20% said their use was the result of "cost management" by a law firm.

About 35% of 319 respondents said their companies typically paid more than $80 an hour for document review work by contract attorneys; 18% said they paid less than $40 an hour.

Source: Association of Corporate Counsel/WSJ Contract Attorney Use Survey

To make a living, Mr. Aponte, who works for a variety of agencies, must scramble for the next gig. He has worked for as little as $33 an hour and has endured up to seven months' unemployment. The duration of a job is unpredictable. "A case can settle at any time. One night they'll call you, and the next day the project ends," he says.

A typical contract lawyer with an average flow of work can make $40,000 to $50,000 annually, according to Veronica Maldonado, a contract attorney in Chicago who recently started a website for contract lawyers. That compares with an average starting salary of $160,000 for associates—who may also get bonuses of $10,000 or more annually— at some of the big corporate law firms in New York.

Temporary legal staffing in the U.S. is projected to increase by 25% cumulatively over the next two years, according to Staffing Industry Analysts, a temp-industry tracking group. The hourly rates that temp agencies charge for contract attorneys are just a fraction of what a first-year associate at a big law firm typically bills per hour.

Large firms are billing $325 to $550 for an hour's work this year by freshman associates, while smaller firms bill them as low as $100, according to research firm Valeo Partners. Temp staffing agencies, in contrast, might bill around $50 an hour or less for document review work by contract attorneys. . . .

Sure, every profession is subject to redefinition, even extinction, as the world changes. But I don't think that's really what's happening here, or at least not entirely. It seems more a part of a process of social stratification which is spreading into more and more areas of our lives. I suppose it counts for something that it's not based on accident of birth, like the old forms of aristocracy, but it's sure as heck not based on merit either. I'm sorry, you can't tell me that these lawyers reduced to sweatshop-style piecework are less skilled than the people exploiting them. No, the new class stratification is based, as far as I can tell, on: money, connections, and chutzpah.

So, we now have a permanent underclass of lawyers, a piecework commodity, an unexpected (to me, anyway) expansion of the working model of a transformed workforce envisioned by the economic elites who have been so busy remaking the world economy into their private stomping ground, where they get to do the stomping and the rest of us are the ground.

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Who Wants To Be A Millionaire!

If you've been following our posts riffing off Glen Yeadon's The Nazi Hydra in America, you may have gotten the idea that I think every millionaire in the country should have been lined up against a wall and shot. That would be the wrong idea. I certainly feel economic predators and corporate Nazi collaborators should have been brought to justice and I have been outspoken about far too many millionaires-- with their unique perspective and interests-- in Congress and the media. But there are plenty of worthy, patriotic millionaires... as evidenced in the short clip above, marking today's 10 anniversary of the Bush tax cuts.

Their message-- "rich people are not the cause of a robust economy; they're the result of a robust economy"-- was very different from Tim Pawlenty's ballyhooed big economic speech that came out at the same time. Pawlenty thinks his path to the Republican vice-presidential nomination is by calling for draconian changes if not an end to Social Security and Medicare. In short, Pawlenty, like all the Republicans, is demanding

• A massive new tax cut for the wealthy

• A massive tax cut (more than 50% reduction in the rate) for corporations-- including Big Oil (He's also called the idea of ending subsidies "ludicrous")

• The elimination of the estate tax and taxes on capital gains and dividend income

• A balanced budget amendment and spending cap at 18% of GDP-- translation: severe cuts to Medicare, Social Security, and everything else except the Military-Industrial Complex

In his not-ready for prime time speech, Pawlenty said "There are some obvious targets to cut. We can start by applying what I call 'the Google test.' If you can find a good or service on the Internet, then the federal government probably doesn't need to offer the same good or service. Eddie Vale of Protect Your Care scratched his head in wonder.

I can Google ‘seniors’ and ‘health care’ does that mean Pawlenty would completely end Medicare, Medicaid and Social Security? I can Google ‘veterans’ and ‘hospital’ does that mean Pawlenty would dismantle the VA system? I can Google ‘pharmacy’ does that mean no senior citizen or child would ever get assistance with their medicines from Pawlenty? These may seem like idiotically stupid questions, but, are necessary since Pawlenty is going to give a speech to demonstrate his qualifications to be leader of the free world by basing his policy agenda off what he can find on the internet.

“It’s also pretty sad and pathetic how quickly the regular blue collar guy veneer has fallen off as he rushes to cry crocodile tears over class warfare while taking away health care from seniors and kids to pay for tax cuts for millionaires, billionaires and big oil.

Author and labor attorney Jonathan Tasini marked the anniversary of the Bush tax cuts for millionaires by asking what we've learned from their utter failure to create jobs or improve the economy. Not much.

We seem to learn very little. Or, perhaps, it's better to say that our elected representatives seem to learn very little-- partly, albeit, because of the corruption of the electoral process that seems to force even those who have half a brain to automatically spew out the words "tax cuts" along with "economic recovery," "government regulations" and "small business" as if there was even a connection between any of those phrases to building a health economy.

Example: in 2009, the president proposed, and the Congress passed, a stimulus bill that was supposed to drag the economy out of the crisis sparked by the financial crimes on Wall Street. The problem: the stimulus was too small-- $787 billion-- and a third of the bill was...tax cuts!!! The most inefficient way to create jobs. And, IMHO, it's the reasons the stimulus did not have the impact it could have had.

So, now, the president and Democrats are caught in a real pickle: they face a disastrous jobs picture but they seem reluctant to push for new government stimulus because they feel on the defensive defending the 2009 "failed" stimulus. Well, that's what you get for believing in tax cuts as some economic miracle-producer ("failed" is in quotes because actually if you ask governors and mayors about the stimulus you would find a lot of them grateful for the hundreds of thousands of jobs that were saved thanks to the stimulus).

And we don't learn.

People run around wanting to cut taxes for "small businesses" and eliminate the estate tax--even though this is just a cover that, "would allow the rich to continue to enjoy most of the tax cuts they received under President Bush while doing nothing to create or protect jobs."

The "compromise" tax deal in 2010 tilted to the wealthy.

Then, there is the truly dumb idea of giving corporations yet another tax break by letting them bring back profits stashed overseas virtually for free.

And wrapped around all this craziness is the entire phony debate about a debt and deficit "crisis"--phony because the only crisis that exists is the lack of jobs in the country, a crisis brought on by a massive robbery of our nation's wealth, in large part, due to the obsession over giving ever-larger tax cuts to people who do not deserve to get them (and a decision by many of those same people to pay themselves obscene CEO salaries).

It goes on and on and on. A robbery that has gone on for thirty years shows no sign of abating.

Thirty years? Why leave out the 1920s and '30s, the years the last 30 were based on? They were the Big Business heyday hacks like Pawlenty and Romney want to get us back to.