How Wall Street's Loss May be Labor's Gain

clipped from www.prospect.org The lead article in the New Year's Day edition of the Washington Post bemoaned the loss of $6.9 trillion in value in U.S. stock market last year. While those who own large amounts of stock have reason to shed tears, this may end being good news for the rest of us. The loss of stock wealth means that stockholders have less claim to value of the country's output. The U.S. economy can produce just as much in 2009 as it did in 2008 (in fact somewhat more, because of labor force and productivity growth). If stockholders can demand less because of the reduced value of their stock, then this leaves more for the rest of us. The most visible evidence of how the loss of stockholder wealth can benefit the rest of us was the sharp decline in consumer prices over the last three months. As a result, real wages rose at almost a 15 percent annual rate in the three months from September through November.

From economic media critic Dean Baker, whose blog I really need to check more often. Baker goes on to explain how a loss of demand from Wall St. types could be made up. "Eventually weakness in the labor market will put more downward pressure on real wages," he writes. "However, if the loss of demand from stockholders is effectively replaced by demand from the government or foreign sector, then the vast majority of the country will be made better off by this plunge in stock prices."

Yet another argument in favor of a second New Deal.

The Stuff I Didn't Get To -- 1/1/09

President George, hard at work

-Headline of the day-
"Bush vows to keep working hard until Jan. 20."

Yeah, yeah, yeah. It's hard work. We know. This is one of those good news/bad news things. First, the bad news -- Bush vows to keep screwing things up until the very last second. The good news?

Bush made his vow "to keep working hard" from his play-ranch in Crawford, Texas, where he's on vacation. The only way to take this less seriously would be if he'd sent out a press release from Disneyland. (The Hill)


-Give the gift of crack-
An unnamed Athens, Alabama man has been arrested "for allegedly accepting gift cards for payment for crack cocaine and prescription drugs." According to the report, "[Police Captain Marty Bruce] said officers executed a search warrant at the man's house and seized crack cocaine, Xanax pills, $899 cash and $175 in gift cards."

No word on where the gift cards were from, but you've got to wonder what sort of stores a crack dealer would shop at. I'm guessing the vast majority were from Wal-Mart. Really, what's he going to need from Home Depot or Barnes & Noble?

Still, it's some sort of measure of the state of the economy that crack dealers are basically bartering now. I'm not sure exactly what it means, but I'm sure it means something. (Associated Press)


-Bonus HotD-
"Poll: Obama's Leadership Rating As High As Bush After 9/11."

There's one important distinction to be made here, though. Where Bush needed 3,000 people to die in order to enjoy some respect, all Obama needed was almost 70 million votes.

Of the two methods of gaining that rep for leadership, I know which one I prefer. (TPM Election Central)

Blago Appointee Burris Once Pushed to Execute Innocent Man

clipped from www.propublica.org Former Illinois attorney general Roland Burris, embattled Gov. Rod Blagojevich’s pick to replace Barack Obama in the Senate, is no stranger to controversy. While state attorney general in 1992, Burris aggressively sought the death penalty for Rolando Cruz, who twice was convicted of raping and murdering a 10-year-old girl in the Chicago suburb of Naperville. The crime took place in 1983. But by 1992, another man had confessed to the crime, and Burris’ own deputy attorney general was pleading with Burris to drop the case, then on appeal before the Illinois Supreme Court. Burris refused. He was running for governor.

This is pretty ugly. The piece goes on:

"Anybody who understood this case wouldn’t have voted for Burris," Rob Warden, executive director of the Center on Wrongful Convictions, told ProPublica. Indeed, Burris lost that race, and two other attempts to become governor.

Burris’ role in the Cruz case was "indefensible and in defiance of common sense and common decency," Warden said. "There was obvious evidence that [Cruz] was innocent."

Putting ambition over justice. I guess we shouldn't be surprised.