On June 5, voters in Wisconsin will decide whether to allow Scott Walker, the proudly divisive Republican governor who took office at the start of 2011, to finish his four-year term or force him to leave office three years early.
The Walker recall election is a rare political spectacle fueled by obscene amounts of money. Of $26 million raised for the recall election since January 2011, more than $25 million has gone directly to Mr. Walker's campaign, much of it from outside right-wing ideologues and corporate interests.
His Democratic opponent, Milwaukee mayor Tom Barrett, had raised less than $1 million as of the end of April because of Wisconsin election law limits that did not apply to Mr. Walker. Mr. Barrett has outside support from union groups.
But real substance underpins the spectacle and spending of the Wisconsin election, issues that should matter not only to residents of the Badger State but also to people of the St. Louis area and the rest of the country.
The core question is whether ordinary voters finally have been pushed to the point of demanding leaders who will work to restore America's ailing middle class to health and secure America's economic future in the process.
That's a lot to put on the shoulders of any electorate, even in Wisconsin, a state with a storied heritage of progressive ideals and policies that have improved the lives of its people for generations. But in Wisconsin as elsewhere for the last 30 years, distorted economic policies have been steering unimaginable amounts of wealth to moneyed interests while the incomes of working Americans have stagnated at best.
Yet it was not much more than a year ago that Wisconsinites rose up in protest and defiance when the new governor, under the pretext of a budget crunch, launched an assault on the basic right of government workers to bargain collectively for their compensation. Collective bargaining, of course, helps level what otherwise would be a massive imbalance of power between a government or corporate institution and a lone employee.
Teachers, office clerks, road crews, maintenance staff, IT departments and cafeteria workers — backed by outnumbered Democrats in the state legislature — took to the streets of Madison and the halls of the state capitol in opposition to the bill incorporating Mr. Walker's anti-worker agenda. Eventually, the governor and the Republican legislative majority had to resort to parliamentary maneuvers to pass the statute.
In hastily called recall elections just a few months later, voters retained three of three Senate Democrats and ousted two of six challenged Senate Republicans, setting the stage for next week's recall effort against Mr. Walker.
The most recent polls favor Mr. Walker's retention by a small margin, but gubernatorial recalls are so rare that the predictive accuracy of polling is virtually unknown.
Mr. Walker and outside groups supporting him enjoy a ridiculously lopsided financial advantage, but longtime Wisconsin observers also note that most voters have long since made up their minds, so the spending is more likely to enrich media consultants, ad agencies and TV stations than the candidates' vote totals.
Finally, there's been some fanciful speculation that Wisconsin's recall results may foreshadow the outcome of November's presidential election. Perhaps, but the survival of America's middle class is more important than even that battle.
Stocks tumble amid rising Europe worries; Dow falls 161 - msnbc.com
Brendan Mcdermid / REUTERS
Traders work on the floor of the New York Stock Exchange.
Rising bond yields in Italy and a bank crisis in Spain dragged Wall Street lower on Wednesday, as Europe's financial woes continued to dictate the direction of U.S. stocks.
Angst over Europe's outlook drove investors from risky investments into safe-haven assets. U.S. Treasury benchmark yields fell to a 60-year low, prices for crude were down more than 3 percent and the euro fell below $1.24 to a 23-month low.
The Dow Jones industrial average closed the day down 161 points, having lost as much as 184 points earlier in the session.
The broader S&P 500 is down nearly 6 percent in May, headed for its worst monthly performance since September.
Yields rose sharply at an Italian sale of five- and 10-year debt, and investors worried about Spain's plans to raise new funds as that country's borrowing costs also rose. Adding to worries were Greece's upcoming election, which could determine if the country will stay in the euro zone or leave.
The CBOE volatility index, a gauge of market anxiety, jumped 10 percent.
Related: Analysts wonder how low Facebook shares will go
"You're seeing the deterioration in Spain gain magnitude and that is worrisome because it involves a larger bailout [than Greece's] and far more capital to alleviate banking problems," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
"Traders and long-term investors believe Europeans are working on solutions. But the ultimate question is will capital markets give them the time before a liquidity issue becomes a solvency issue."
Facebook’s share price sank to a new low, off 2.3 percent at $28.19.
U.S.-traded shares of Research In Motion tumbled after the BlackBerry maker warned it would likely report a quarterly operating loss. Analysts cut their price targets on RIM shares and said the odds of a turnaround at the company are fading fast.
Pep Boys Manny, Moe & Jack lost a fifth of its market value after private equity firm Gores Group walked away from a $791 million deal to buy the auto parts retailer.
U.S. economic data showed contracts to purchase previously owned U.S. homes unexpectedly fell in April to a four-month low, dealing a blow to optimism the housing sector may have hit a bottom.
Reuters contributed to this report.
Discussing the Dow's weak performance this May, with Josh Brown, Fusion Analytics; Nathan Bachrach, The Financial Network Group CEO; and CNBC's "Closing Bell" crew.
Eurozone faces 'financial disintegration' unless it acts again, warns commission - The Guardian
The eurozone is confronted with the prospect of "financial disintegration" and should use its new bailout fund to recapitalise distressed banks directly while embarking on a transnational banking union, the European commission said today.
Delivering more than 1,000 pages of diagnosis and policy prescriptions on the dire condition of the European economy and how to try to end almost three years of euro crisis, the commission also talked up the merits of eurobonds or pooling of eurozone debt, a proposal gaining in traction but strongly resisted for now by the biggest economy, Germany.
With international attention focused on Spain wrestling with an escalating banking crisis, the commission was surprisingly critical of Mariano Rajoy's attempts to chart a way out of an extreme predicament – recession, soaring national debt, a ballooning budget deficit, the highest unemployment in Europe, and the banks sitting on tens of billions of toxic assets from the bust property bubble.
"The policy plans submitted by Spain are relevant, but in some areas they lack sufficient ambition to address the challenges," the commission's Spanish report card said.
On banking regulation, administrative reform, labour market changes, growth and competitiveness policies, "the national reform programme does not contain any specific plans for addressing the challenges".
Tax system reforms, meanwhile, were going "in the opposite direction" to that recommended by Brussels.
"Spanish banks still have large exposures to the real estate and construction sectors (amounting to about 10% of total consolidated assets in December 2011). Over a half of this exposure is already problematic and may eventually rise further as developers prove unable to sell their assets and make repayments," the commission said.
Overall in the eurozone, the sovereign debt crisis of the past 30 months had fostered "a very dangerous" degree of "interdependence of weak banks and weak sovereigns".
The European Central Bank's intervention last December, throwing a trillion euros of cheap three-year loans at European banks over a period of three months, had brought a respite. But the commission said that this was merely temporary and that investors' confidence was again evaporating. Despite the liquidity help, the banks were failing to lend, raising the chances of a credit crunch in Europe wrecking growth prospects and causing unemployment to rise from current 15-year highs.
"At this stage, there is no clear-cut evidence that the deleveraging process has become excessive or disorderly with disruptive consequences on the real economy. Nevertheless, the heterogeneity across member states is large and the aggregate picture may hide different situations at country level," the commission said.
Given the gravity of the situation, the commission, whose recommendations are to be put to a summit of EU leaders in Brussels at the end of next month, outlined a quantum leap in fiscal and economic union going beyond the scope of the EU's Lisbon treaty and which would require a new EU charter.
While also hedging its bets, the commission stressed the merits of eurobonds, a eurozone banking union, deploying the European Stability Mechanism (ESM) – the permanent bailout fund being made operational in July – for direct loans to banks rather than to governments, as required by the ESM treaty.
"Additional reforms to economic governance may be considered to complete the institutional structure of monetary union," the commission said. "The changes made so far have in some cases touched on issues traditionally tied to national sovereignty. In some instances, they appear to have exhausted the scope of action possible under the [Lisbon] treaty … The question remains as to whether stronger co-ordination of economic policies will be sufficient or whether there needs to be progress towards closer integration of economic policy-making. The crisis experience has underlined the importance of this issue."
The commission said that there were signs of banks deleveraging, retreating behind national borders and divesting their foreign subsidiaries.
"To counter this trend of financial disintegration, more co-ordination at European level is required in supervision and crisis management frameworks. More specifically, closer integration among the euro area countries in supervisory structures and practices, in cross-border crisis management and burden sharing, towards a 'banking union' would be an important complement to the current structure of monetary union."
"To sever the link between banks and the sovereigns, direct recapitalisation by the ESM might be envisaged," it added. The proposal is again fiercely resisted by Berlin, but supported by the new French president, François Hollande, by Washington, and is also gaining support at the European Central Bank.
Talking up the advantages of eurobonds, the commission sought to appeal to German reservations by stating that "the net effects of common issuance will be positive only if the potential disincentives for fiscal discipline can be controlled".
Euro slumps to a two-year low as Brussels warns of 'financial disintegration' in the eurozone - Daily Mail
- European Commission calls for drastic action
By Hugo Duncan
|
The single currency crashed to its lowest level for nearly two years last night as Brussels warned that the eurozone faces ‘financial disintegration’.
In a hard-hitting report on the dire state of the economy, the European Commission called for drastic action to prevent catastrophe tearing the region apart.
It proposed that money set aside for keeping debt-ridden governments afloat should now be used to rescue troubled European banks.
Disintegration: The single currency crashed to its lowest level for nearly two years last night
‘Flexibility and speed are of the essence,’ said EC president Jose Manuel Barroso.
The desperate rallying cry came amid mounting fears that the banking crisis in Spain will cripple the eurozone’s fourth largest economy and trigger a cataclysmic break-up of the single currency.
The euro crashed below $1.24 against the US dollar to a level not seen for nearly two years.
The single currency was also trading below 80p against the pound having lost 20 per cent of its value in the last three years.
‘The market has lost confidence in the euro,’ said Carl Forcheski, a currency expert at French bank Societe Generale in New York. ‘People are battening down the hatches.’
Stock markets around the world were on the slide with the FTSE 100 index down 1.74 per cent or 93.86 points to 5297.28 on a punishing day for investors in London.
Chris Beauchamp, a market analyst at IG Index in the City, said: ‘Without wishing to sound apocalyptic, it does feel as if Spain is gradually shuffling towards the abyss.
'Flexibility and speed are of the essence': EC president Jose Manuel Barroso
‘Investor confidence wanes by the day, and it could only be a matter of time before the Spanish government is forced to ask for financial aid.
‘This would be an event of a far greater magnitude than the bailouts of Ireland, Portugal and Greece, since Spain’s size means it would exhaust Europe’s financial firepower.’
The EC said the eurozone bailout fund could be used to help banks directly rather than fund governments. It said it could ease pressure on countries such as Spain struggling to prop up the banking system.
‘To sever the link between banks and the sovereigns, direct recapitalisation might be envisaged,’ the report said.
The money would come from the European Stability Mechanism, the eurozone’s permanent bailout fund which launches in July but is currently only designed to lend to governments.
Brussels said: ‘A closer integration among the euro area countries in supervisory structures and practices, in cross-border crisis management and burden sharing, towards a ‘banking union’ would be an important complement to the current structure.’
It also floated the idea of Eurobonds - a move that would see debt issued jointly by all 17 countries in the eurozone.
The idea is vehemently opposed in Berlin because it would involve German taxpayers underwriting Greek and Spanish debt.
Stocks: Europe worries stalk Wall Street; Dow loses 161 - Tulsa World
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Published: 5/30/2012 3:36 PM
Last Modified: 5/30/2012 4:05 PM
Stocks are closing sharply lower amid fear that Europe's debt crisis might fracture the financial system there.
Strong demand for safe investments Wednesday pushed the yield on the 10-year Treasury note to its lowest level since World War II.
Spain's borrowing costs spiked to the highest level since Spain joined the euro currency. Last week, the nation's fourth-largest lender said it needed nearly $24 billion in government aid.
Greece's future in the euro is uncertain ahead of elections next month.
The Dow closed down 161 points at 12,419. The S&P 500 index was down 19 at 1,313. The Nasdaq composite average was down 34 at 2,837.
About 13 stocks fell for every two that rose on the New York Stock Exchange. Trading volume was heavy at 3.47 billion shares.
Don't blame the Germans. Blame the Euro. The whole idea of creating a single currency with such diverse people and economies was doom to failure. The fact that it has lasted 10 years is the miracle ! The sooner the inevitable takes place the better. Then the world can lick its wounds and get back to sanity. After the euro is extinguished attention needs to be given to the entire basis of the EU. It should be reverted back to the "common market" which is what people in this country voted for. A simple trading agreement is all that is needed.
- Howard, UK, 31/5/2012 06:30
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