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The US will turn a small profit on the financial support banks, mortgage lenders and car manufacturers received during the financial crisis. So reports the US Treasury. Especially the support for more than 700 banks was profitable. The support for car manufacturers has cost billions of dollars, but the Treasury says it has resulted in 230.000 new jobs. American households have lost $12.3 trillion since the crisis.

The point of all of this is, if you add up all of the MBS-related liability out there, the banks as it stands are facing an Armageddon of claims from all sides. It can't possibly be less than a trillion dollars, and it's probably much, much more. But the Obama administration's current plan is to let them all walk after paying a few shekels apiece into a $20 billion kitty.

AS Election Day approaches, serious discussion about economic policies is hamstrung by the devotion of both parties to reducing taxes. The big reason, of course, is that President Bush emphasizes tax cuts, including elimination of the estate tax, to the exclusion of almost everything else. The Democrats, in turn, hesitate to propose an economic plan that does not include long-term reductions for middle-income workers, and most refuse to talk about rescinding the Bush tax cuts for the wealthy. But the degree of misleading information emanating from both Washington and the media about how taxes affect the economy is disturbing. As I listen to the radio, watch TV news and read a variety of newspapers, it seems that quite a few Americans, including economics writers and media hosts, think that low-tax countries unquestionably grow faster than high-tax economies. Right and left, they seem to attribute more rapid growth in America to lower taxes. What may surprise them is that there is no evidence for that. ''You can make a theoretical case that high taxes impede economic growth, but it is just not supported by the evidence in the U.S. or across countries,'' said William Easterly, a former World Bank economist soon to join the faculty of New York University.

The Dow Jones average suffered its latest calamitous decline on Thursday, plunging 419 points and erasing much of the progress that had been made after the last series of wild swings two weeks ago. There were many factors at work in Thursday's carnage, which came after markets in Asia and Europe experienced similar turmoil, but the overriding one seems to be this: Just about everyone now believes the U.S. economy is getting worse -- and no one thinks our leaders in Washington are about to do anything meaningful about it. So we thought it might be a good time to take a step back and consider the fundamental absurdity of the paralysis in Washington, where spending cuts and deficit reduction -- and not job creation -- have come to define and dominate the discussion. And who better to illustrate this than ... Robert Reich, playing the roles of both Professor Donald Right and Dr. Hugo Wrong in a one-man show that everyone on Capitol Hill really ought to check out:

Businesses have had at least 25 to 30 years near complete certainty -- certainty that they will pay lower and lower taxes, that they' will face less and less regulation, that they can outsource to their hearts' content (which when it does produce savings, comes at a loss of control, increased business system rigidity, and loss of critical know how). They have also been certain that unions will be weak to powerless, that states and municipalities will give them huge subsidies to relocate, that boards of directors will put top executives on the up escalator for more and more compensation because director pay benefits from this cozy collusion, that the financial markets will always look to short term earnings no matter how dodgy the accounting, that the accounting firms will provide plenty of cover, that the SEC will never investigate anything more serious than insider trading (Enron being the exception that proved the rule). So this haranguing about certainty simply reveals how warped big commerce has become in the US. Top management of supposedly capitalist enterprises want a high degree of certainty in their own profits and pay. Rather than earn their returns the old fashioned way, by serving customers well, by innovating, by expanding into new markets, their 'certainty' amounts to being paid handsomely for doing things that carry no risk. But since risk and uncertainty are inherent to the human condition, what they instead have engaged in is a massive scheme of risk transfer, of increasing rewards to themselves to the long term detriment of their enterprises and ultimately society as a whole.

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file - "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

Why this absence of political ambition? What explains the rioters' genuflection at the altar of "crude materialist, market-driven hedonism"? To zone in on the answer, we need to step back and remind ourselves how strikingly unequal distributions of income and wealth impact how we interact with "things." In relatively equal nations, societies where minor differences in income and wealth separate social classes, people typically do not obsess over "things," the baubles of modern life. The reason? If nearly everyone can afford much the same things, things overall tend to lose their significance. People in more equal societies will be more likely to judge you by who you are than what you own. The reverse, obviously, also holds true. "As inequality worsens," as Boston College economist Juliet Schor has explained, "the status game tends to intensify." The wider that gaps in income and wealth go, the greater the differences in the things that different classes can afford. In markedly unequal societies, things take on ever greater significance. They signal who has succeeded and who has not. In London, the developed world's most unequal city, these signals may dominate daily life as ferociously as anywhere else on Earth. Their incessant repetition drowns out the socially cohesive signals that people see and hear and feel in more equal societies, the sense that "we're all in this together." "Let this week be a wake up call," London's Compass think tank observed right after the heaviest rioting. "There is more to clean up than broken shop windows."

A new study by Northwestern University economists, called The "Jobless and Wageless" Recovery from the Great Recession of 2007-2009," found that the economic recovery is highly uneven: corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than one percent. In other words, the average American worker has been left behind by the recovery, which officially began in June 2009. "The economic recovery through 2011 I has failed to create any net new jobs since the quarter marking the end of the recession in 2009 II

It has been three decades since the United States suffered a recession that followed on the heels of the previous one. But it could be happening again. The unrelenting negative economic news of the past two weeks has painted a picture of a United States economy that fell further and recovered less than we had thought.

LONDON, July 27, 2011 (Reuters) - There may be a point at which global investors get indigestion from U.S. money printing.

A vividly told history of how greed bred America's economic ills over the last forty years, and of the men most responsible for them. As Jeff Madrick makes clear in a narrative at once sweeping, fast-paced, and incisive, the single-minded pursuit of huge personal wealth has been on the rise in the United States since the 1970s, led by a few individuals who have argued that self-interest guides society more effectively than community concerns. These stewards of American capitalism have insisted on the central and essential place of accumulated wealth through the booms, busts, and recessions of the last half century, giving rise to our current woes. In telling the stories of these politicians, economists, and financiers who declared a moral battle for freedom but instead gave rise to an age of greed, Madrick traces the lineage of some of our nation's most pressing economic problems. He begins with Walter Wriston, head of what would become Citicorp, who led the battle against government regulation. He examines the ideas of economist Milton Friedman, who created the plan for an anti-Rooseveltian America; the politically expedient decisions of Richard Nixon that fueled inflation; the philosophy of Alan Greenspan, on whose libertarian ideology a house of cards was built on Wall Street. Intense economic inequity and instability is the story of our age, and Jeff Madrick tells it with style, clarity, and an unerring command of his subject.

It's important, yes, and must be addressed. But by a wide margin, it's not the nation's most pressing economic problem. That would be the widespread and persistent joblessness that has plagued the labor market since the Great Recession began in 2008. Almost 14 million people - 9.1 percent of the labor force - were officially counted as unemployed last month. But that's just the tip of the iceberg. There were almost 9 million part-time workers who wanted, but couldn't find, full-time jobs; 28 million in jobs they would have quit under normal conditions; and an additional 2.2 million who wanted work but couldn't find any and dropped out of the labor force. If the economy could generate jobs at the median wage for even half of these people, national income would grow by more than 10 times the total interest cost of the 2011 deficit (which was less than $40 billion). So anyone who says that reducing the deficit is more urgent than reducing unemployment is saying, in effect, that we should burn hundreds of billions of dollars worth of goods and services in a national bonfire. We ought to be tackling both problems at once. But in today's fractious political climate, many promising dual-purpose remedies - like infrastructure investments that would generate large and rapid returns - are called unthinkable, in the false belief that they would impoverish our grandchildren. Yet there are other ways to attack unemployment that could garner bipartisan support. Perhaps the most promising is a payroll tax holiday.

Despite the financing challenges, Argentina's economy has grown by more than 8 percent a year since 2003, and many industries have benefited from the devaluation. Argentina has resumed exporting cars to Brazil. Tourism has flourished from an influx of Brazilians and other foreigners. In the end, Argentina may have one more lesson to teach Greece: the danger of fatalism. "A lot of people were saying that Argentina would never recover, that the peso would never regain value, that this country was damned," said Mr. Kerner, the analyst. "And it didn't happen."

Robert Reich connects the dots on the economy, in less than 2 minutes and 15 seconds. Who knew he could draw!?!

Fissures among Europe's currency partners are becoming even deeper and more widespread than was previously evident, raising new doubts about whether the group can resolve the regional debt crisis that has simmered for more than a year.

"Those who make peaceful evolution impossible make violent revolution inevitable."- John F. KennedyThere's one thing for sure: 2008 isn't anything like politics as usual.The corporate media (with their unerring eye for the obvious point) is fixated on the narrative that, for the first time ever, Americans will likely end this year with either a woman or a black man headed for the White House. Bloggers are telling stories from the front lines of primaries and caucuses that look like something from the early 60s - people lining up before dawn to vote in Manoa, Hawaii yesterday; a thousand black college students in Prairie View, Texas marching 10 miles to cast their early votes in the face of a county that tried to disenfranchise them. In recent months, we've also been gobstopped by the sheer passion of the insurgent campaigns of both Barack Obama and Ron Paul, both of whom brought millions of new voters into the conversation - and with them, a sharp critique of the status quo and a new energy that's agitating toward deep structural change.There's something implacable, earnest, and righteously angry in the air. And it raises all kinds of questions for burned-out Boomers and jaded Gen Xers who've been ground down to the stump by the mostly losing battles of the past 30 years. Can it be - at long last - that Americans have, simply, had enough? Are we, finally, stepping out to take back our government - and with it, control of our own future? Is this simply a shifting political season - the kind we get every 20 to 30 years - or is there something deeper going on here? Do we dare to raise our hopes that this time, we're going to finally win a few? Just how ready is this country for big, serious, forward-looking change?Recently, I came across a pocket of sociological research that suggested a tantalizing answer to these questions - and also that America may be far more ready for far more change than anyone really believes is possible at this moment. In fac