On January 1, 2011, the Bush tax cuts for the super rich end, and the Obama tax cuts for super rich begin. There are no spending cuts and another $800 billion will be added to deficit, with Republican encouragement and support. This is not the first time he has said one thing and done another, that started before the election, but few noticed.
Mr. Obama may not like it, but here is how people everywhere judge see things: if you promise much and deliver little, we don't want you to start telling us that we expect too much. Your promises set our expectations, that is why we hired you and not someone else who promised less, but more than you have produced. Calling the people who hired you "stupid" or "not realistic" is not the way to keep your job, especially when we don't see you making any effort to do what you promised. Waiting for a deal to show up is not the same as proposing a deal that is good for us, and then making it come true. Call it the "audacity of results."
There are many examples of promising much and delivering little, here are a few:
1) Mr. Obama said that he wanted to review NAFTA, a program that has cost U.S. workers many good paying jobs and has created low paying jobs unloading boxes stamped, "Made in Mexico". After the Canadians complained, an emissary was dispatched to tell Canadian officials it was just campaign rhetoric. There was no review after he was elected, it was just rhetoric.
2) Mr. Obama did not have a health care plan until he noticed that Hillary Clinton was getting a lot of traction from having one, so added one, but said that it would not cover everyone (meaning that you could get sick and then start paying for health care - an impossible condition, like buying auto insurance after you have a wreck). Once elected, he was unable to clearly layout what a health care plan would look like,so he waited while many plans were proposed, and the public option, the only one that would have constrained costs, was eliminated by more than 300 lobbyists. His final solution included fines for not getting coverage, starting very small (less than $2 a week); too small to have any benefit, and large enough to anger people.
3) During this campaign, Mr. Obama ran an ad, showing a typical young middle class family, and promised that he would work to see that their jobs were not outsourced. Within weeks he received $7.8 million from CEOs of body shops seeking more visas to bring low wage workers to the USA, taking jobs away from U.S. citizens right here. What difference would it make to that couple if they lost their jobs to worker in India,or the same worker brought to the USA? After election, with unemployment running high, Obama invited the (mostly Indian) CEOs to the White House to assure them that they would be able to continue replacing US citizens with low wage workers from India and China. He did not invite the 50% of college graduates who can not get a job requiring the degree they are still paying for, to reassure them.
4) Once elected,Obama appointed a BP executive to hlp run the government regulation of off-shore drilling. We know how that worked out.
5) In the rescue of GM and Chrysler, Mr. Obama insisted that union worker,s making $28 per hour, accept the same wages as non-union workers earning $24 per hour; wiping out benefits of thirty years paying union dues. (compare to item below)
6) When he supported the bailouts of Fannie Mae and Freddie Mac, he supported salaries greater than $5 million, paid from the taxes of workers earning an average of around $30,000.
7) Mr. Obama was too modest in his stimulus package,giving in to Republican demands, and ended up with spending in 2010 of around $250 billion, which has a very small effect on an economy of about $15 trillion; chump change, but he told the American people it would be enough to reduce unemployment. Telling the American people that the stimulus package is enough, when it is too small is like a mechanic fixing your car and telling you that it will get you home. When it breaks down on the way, you do not think that you are dealing with a quality mechanic. In designing a too small stimulus, Obama ignored the advice of liberal Nobel laureates in economics Paul Krugman and Joseph Stiglitz, and took the advice Republicans who had been wrong about the housing bubble meltdown. Ignoring guys that have been right time and again is risky, and those two were correct one more time; the stimulus was too small. Saying it would work was an error in judgment, leading to higher unemployment and anger.
8) Mr, Obama deferred to Wall Street in his financial reforms, leaving us with reforms that experts and voters are not convinced will prevent another bank bail out.
9) Mr. Obama convinced the house to pass a poor (and poorly understood) cap-and-trade bill that most of the public did not like (why not a just a simple tax on pollution, and give the money collected back to those who buy cars getting better mileage?). The cap-and-trade vote looked like a giveaway and its handling cost many representatives their seats. High unemployment and incompetence do not win campaigns.
10) After months of discussion, Obama was too weak to stand up to the generals on Afghanistan, sending in 30,000 more troops, costing the US taxpayers $1 million each per year. We can't afford it, and most Americans know that Afghanistan next year will be pretty close to what was like last year, a see of corruption and wasted lives.
11) Mr. Obama freezes the wages of public workers without any discussion with union leaders, and without any concessions from taxpayers with incomes over $1 million. So much for shared sacrifice.
Today (7 Dec 2010) Mr. Obama lashed out at at liberals and independents who are unhappy with his leadership by saying that he had done, or tried to do, everything that had promised in his campaign. Many of his supporters, enough to cost him re-election in a campaign against Mitt Romney, do not agree. In fact, he is making George W. Bush look like he may lose the title of the nation's worst president ever. Mr. Obama said:
“I’ve said before that I felt that the middle-class tax cuts were being held hostage to the high-end tax cuts,” Mr. Obama said. “I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed. Then people will question the wisdom of that strategy. In this case, the hostage was the American people, and I was not willing to see them get harmed.”
First, calling Republicans hostage takers is not reaching across the aisle, and second, our government runs (sadly) on bribes and deals. If you want to fix that, we support you, otherwise learn to make a deal that benefits your supporters. Third, giving the middle class, and the very wealthy, a tax break now, added to deficit, to be paid back later, is not a huge favor for the middle class. Most people accept shared sacrifice, but think that very rich are not sharing. What Obama did in making this deal causes many to think that those who benefited from running up a huge deficit never will pay. And that does not give confidence to the middle class. A week ago you were telling us that the deficit was harming us, and now you and your Republican posse say that more deficit means less harm.
William Edwards Deming, an expert on value, said that most of us see high quality as delivering at least a little bit more than you promise. He defined low quality as delivering a little less than you promise. Mr. Obama may not like the verdict, but the truth is that he has delivered much less than was expected, and that is how you lose elections.
Tuesday, December 7, 2010
Saturday, December 4, 2010
APR II - The March on Washington, Part 2
On the 30th of April, 2011, we will join together in Washington, DC, to impress upon congress that the business of this nation must now be to correct the earmarks and abusive legislation that have denied the vast majority of Americans a real raise in income for the last 30 years; a period in which the productivity of the American worker more than doubled as did the share of income received by the top 1% of tax payers, a 30 year period when congress cut the taxes on the top 1% and 0.1% of taxpayers by more than 50%, and increased the burden on working families. A period of time when congress "borrowed" over $2.5 trillion from the Social Security Trust Fund to hide the tax cuts for the top one tenth of one percent of society. Because congress has been indifferent to condition of working families of every creed and color, to honor the legacy of A. Phillip Randolph, and to express our common demand that our elected officials stand up for those who have produced so much wealth, we will march on Washington on the weekend 30 April/ 1 May 2011. Our goals are the same as those championed by Mr. Randolph and Dr. Martin Luther King in August 1963, we will be marching for jobs, and reduction in the huge income inequality that grips this nation, is strangling our economy, and trashing the American Dream. It is time to tell those who have saved the banking industry so many times, that have set up Potemkin agencies that protect industry at the expense of voters, that it is time to save the American family. This nation, known in the 50's, 60's, and 70's for the vastness of its opportunity, is now the world's largest debtor, has lost the most industry of any nation, and leads the industrialized world in inequality of wealth and opportunity. Such a nation can perhaps maintain the wealth of a few, but can not offer prosperity to the majority of its citizens; such a nation will fail. We will go to Washington to tell our representatives to make a real start at fixing problems, or come on home.
Topics:
Election reform: tear down the House of Bribes, design publicly funded elections that work.
End Right-To-Work laws that deny workers the benefits of organizing while expanding the benefits of corporations to do the same thing.
Wage Reform: quit socializing the cost of labor with food stamps and HUD housing. Make a living wage the minimum.
Income tax reform: No taxes, not payroll or income taxes on those earning less than $25,000
Fair trade: tariffs , on products sold in the USA when less than 50% made in the USA.
Income inequality: Commit to programs to reduce the 20:20 score of the USA to less than 4:1.
Health Care: A public option costing (and providing services) equal the value of the system in the Netherlands. (note: Republicans want to discuss Obama care; so do we.)
Education: Not more money, not more programs, but more involvement in the three basic things we require; good teachers, involved parents encouraging home study, and the reward of jobs that pay a wage showing the respect of society and the right to live in decent conditions.
National security: protect our industry and provide a diverse environment that employs more of our citizens in occupations they are best suited for. 50% of our college graduates can not find jobs requiring a college education, while congress encourages industry to bring in low wage immigrants to do the work work our children trained for.
The Environment: clean it up, make it like our parents found it. It won't cost more than we are willing to pay.
Undo the activist ideological Supreme Court that thinks that Monsanto is a man.
Invited Speakers:
Congressman John Lewis, 5th District,Georgia, recipient of the Presidential Medal of Freedom.
Clarence B. Jones, Scholar in Residence, Martin Luther King, Jr. Institute at Stanford University
Richard L. Trumka, President of the AFL-CIO
Larry Cohen, president of the Communications Workers of America
Senator Bernie Sanders (Vermont)
Representative John Conyers Jr.(Michigan)
Senator Bob Graham, author "America, An Owner's Manual"
Representative Rosa DeLauro (Connecticut)
Representative Marcy Kaptur (Ohio)
Paul Krugman, Nobel Laureate in economics
Representative Jan Schakowsky, (Illinois) Member of Obama's deficit commission
Andy Stern, former president, SEIU, Member of Obama's deficit commission
Joseph Stiglitz, Noblel Laureate in economics Author "Making Globalization Work", "Freefall"
Elizabeth Warren, Harvard Law School, Chair of Oversight Panel on Banking Bailout
Rebecca Elgie. League of Women Voters and Healthcare NOW! board member
Robert B. Reich, Professor of Public Policy, University of California
Edward N. Wolf, Professor of Economics, New York University Author "Top Heavy"
Dr. Norman Matloff, professor of computer science at the University of California at Davis, "Debunking the Myth of a Desperate Software Labor Shortage"
Richard Wilkinson & Kate Pickett, authors "The Spirit Level"
Jacob S. Hacker & Paul Pierson, authors "Winner Take All Politics"
Bob Herbert, Columnist NY Times
Thom Hartmann, progressive radio host.
Salomeh Keyhani, M.D., M.P.H. Mount Sinai School of Medicine in New York
Michael Pollan, author "In Defense of Food"
Marching with us will improve the lives of more than 90% of all Americans. You can not make better use of a weekend.Make plans now to be there, and ask your family and friends to join you. This is all about families.Marching makes a difference and it is something we all can do. Don't miss the chance to tell your representative to get to work for you, in numbers they can not ignore. You make the difference, be there. There won't be any hanging chads,you show up and your vote will be counted, for sure.
Smothering Social Security
I have been wondering why Republicans keep mentioning social security, since it is part of the budget but it is self supporting. The answer is pretty clear of you look at the numbers. Working families have "put aside" $1.2 trillion in the social security trust fund between 2000 and 2009. The brings the social security trust fund to $2.5 trillion, every penny of which has been borrowed by the congress to support tax cuts for the wealthy. If social security is not "reformed", that money will have to be paid back to working families. That means that instead of "borrowing" more and more from people with average incomes of less than $28,000 a year, hedge fund managers earning over $1 billion a year and now getting over $100 million tax breaks under the Bush (and Clinton) tax cuts, may start having to pay the taxes that were normal when Richard Nixon was president, and everyone was doing a lot better than working people are today. Paying lower taxes when you borrowing money from working families (and just as much from China) is not fun at all when you have to pay both back. Best idea is to trick them out of being repaid; tell them that asking for their money back is asking too much.
The chart shows the growth of assets in the social security trust fund, now roughly twice what we owe China, but George W. Bush once called it "just pieces of paper", apparently meaning that workers had contributed $2.5 trillion, but since he and congress had spent it, all that the trust fund actually has are the same sort of "pieces of paper" that the government of China holds. This link will open a page in a new tab, showing the yearly contributions of workers to the trust fund, over $100 billion surplus each year from 1998 to 2009 and every penny of it spent by congress, a congress that calls any request for repayment, an "entitlement" as though you inherited a title rather than you are asking for the return of your own money. Note that the top 25 hedge fund managers in 2009 had incomes of (average) more than $1 billion each, and they got tax rates, 15%%, less than the full cost of social security to workers, and nobody denigrated those tax breaks by suggesting they were not earned, even though neither Clinton nor Bush ever explained how those tax breaks would be paid for. It was enough for those two guys that billionaires would be helping them (with speaker's fees), after they left office.
Asking poor people to work to 69 before they start asking for their money back, is a good idea if you have been getting big tax breaks you don't want to give up. Never mind that our health care is such that many poor people don't live until they are 69, or only live a year or two after they start collecting social security, never getting back half the money they put in.
Nobel Laureate in economics Paul Krugman has his own take on this:
http://krugman.blogs.nytimes.com/2010/12/01/destroying-retirement-in-order-to-save-it
December 1, 2010, 10:48 am
Destroying Retirement In Order To Save It
Bowles-Simpson, the revision, is out. It has not improved.
I think it is worth pointing out that like so many proposals from that side of the political spectrum — for this is, very much, bipartisanship as a compromise between the center-right and the hard right — this one involves a fundamental piece of strange logic. Namely, it argues that in order to head off the dire prospect of future cuts in Social Security benefits, we must … cut future Social Security benefits.
Also: in response to the point many of us have made about raising the retirement age — that only the affluent have seen life expectancy rise faster than the retirement-age rises already in the law — the plan promises special exemptions for those with physical hardships.
Let’s think about that. Right now we have a retirement system that has the great virtue of not being intrusive: Social Security doesn’t demand that you prove you need it, doesn’t ask about your personal life, doesn’t make you feel like a beggar. And now we’re going to replace that with a system in which large numbers of Americans have to plead for special dispensation, on the grounds that they’re too feeble to work for a living. Freedom!
The chart shows the growth of assets in the social security trust fund, now roughly twice what we owe China, but George W. Bush once called it "just pieces of paper", apparently meaning that workers had contributed $2.5 trillion, but since he and congress had spent it, all that the trust fund actually has are the same sort of "pieces of paper" that the government of China holds. This link will open a page in a new tab, showing the yearly contributions of workers to the trust fund, over $100 billion surplus each year from 1998 to 2009 and every penny of it spent by congress, a congress that calls any request for repayment, an "entitlement" as though you inherited a title rather than you are asking for the return of your own money. Note that the top 25 hedge fund managers in 2009 had incomes of (average) more than $1 billion each, and they got tax rates, 15%%, less than the full cost of social security to workers, and nobody denigrated those tax breaks by suggesting they were not earned, even though neither Clinton nor Bush ever explained how those tax breaks would be paid for. It was enough for those two guys that billionaires would be helping them (with speaker's fees), after they left office.Asking poor people to work to 69 before they start asking for their money back, is a good idea if you have been getting big tax breaks you don't want to give up. Never mind that our health care is such that many poor people don't live until they are 69, or only live a year or two after they start collecting social security, never getting back half the money they put in.
Nobel Laureate in economics Paul Krugman has his own take on this:
http://krugman.blogs.nytimes.com/2010/12/01/destroying-retirement-in-order-to-save-it
December 1, 2010, 10:48 am
Destroying Retirement In Order To Save It
Bowles-Simpson, the revision, is out. It has not improved.
I think it is worth pointing out that like so many proposals from that side of the political spectrum — for this is, very much, bipartisanship as a compromise between the center-right and the hard right — this one involves a fundamental piece of strange logic. Namely, it argues that in order to head off the dire prospect of future cuts in Social Security benefits, we must … cut future Social Security benefits.
Also: in response to the point many of us have made about raising the retirement age — that only the affluent have seen life expectancy rise faster than the retirement-age rises already in the law — the plan promises special exemptions for those with physical hardships.
Let’s think about that. Right now we have a retirement system that has the great virtue of not being intrusive: Social Security doesn’t demand that you prove you need it, doesn’t ask about your personal life, doesn’t make you feel like a beggar. And now we’re going to replace that with a system in which large numbers of Americans have to plead for special dispensation, on the grounds that they’re too feeble to work for a living. Freedom!
Friday, December 3, 2010
Tax Breaks, or Unemplyment Benefits?
The latest data shows employment increased by less than 40,000 new hires in November. Over the last 12 months, the number of people working has increased by less than one million. Just to account for the growth of our population, we need about 120,000 new hires every month, and to make any dent in the 15 million citizens currently out of work, hiring must be at a rate of 300,000 a month for at least a year (that would only rehire 10% of those out of work, and absorb those joining the workforce upon graduation from high school and college), so we need many years of job growth at 300,000 a month, not less than 40,000. In addition, 50% of those graduating from college do not get jobs requiring a college education (most jobs don't), and those that fail to get a job using the skills they learned in college end up with jobs paying (on average) 40% less than those who get jobs requiring a college education. For many people who have heard politicians and Bill Gates say that we don't have enough college graduates and we need to bring in low wage workers from India and China, the job market is a huge disappointment, leaving them with tens of thousands of dollars in debt, years spent in college when they could have been working their way up the job ladder, and, upon graduation, no job. Firms today are increasing profits, not by hiring workers and making more product, but by laying off workers and getting those left to work harder, often for reduced pay or benefits. If you are a Republican, or bailed out banker, you have so much money you need a tax break. If you are worker, you need job.
At this time, with unemployment at almost 10%, with 15 million out of work, with five or six job applicants for every open job, Republicans first priority is more tax cuts for the rich, in fact, every Republican signed a letter to the President saying that they will block every bill before the senate until every millionaire, every billionaire, gets an Obama tax break (the Bush tax breaks expire this month, new tax breaks will be the Obama tax program for the wealthy and Republicans insist that the Obama tax cuts not be paid for, that they be added to the deficit.
http://www.speaker.gov/newsroom/pressreleases?id=1948
At this time, with unemployment at almost 10%, with 15 million out of work, with five or six job applicants for every open job, Republicans first priority is more tax cuts for the rich, in fact, every Republican signed a letter to the President saying that they will block every bill before the senate until every millionaire, every billionaire, gets an Obama tax break (the Bush tax breaks expire this month, new tax breaks will be the Obama tax program for the wealthy and Republicans insist that the Obama tax cuts not be paid for, that they be added to the deficit.
http://www.speaker.gov/newsroom/pressreleases?id=1948
Speaker of the House, Nancy Pelosi, "“We’re here at a time where a lot of issues are on the table and they’re not unrelated. You hear talk about extending tax cuts to the wealthiest people in America. And those tax cuts we are told, should not be paid for. $700 billion in tax cuts to the top 2 percent in our country and our Republican colleagues say we should do that and we should not pay for it, we should add that $700 billion to the deficit. But when it comes to unemployment insurance and just the renewal we want to have, it costs $18 billion — $700 billion vs. $18 billion — they’re saying that has to be paid for. Have to pay for unemployment insurance, we don’t have to pay for tax cuts for the rich. Tax cuts for the rich do not create jobs. They haven’t throughout the Bush Administration. Unemployment insurance creates jobs; does not add to the deficit. And the Republicans insist that that be paid for. "
Republicans want to preserve tax breaks of over $100 million each (average) for the top 25 hedge fund managers, and cut off (say) $250 a week in unemployment benefits to long term unemployed workers who had no part in creating this recession. It is not that workers are lazy or don't want to work, it is that there are no jobs, and the hedge fund managers that congress wants tax breaks for, had a hand in creating this mess.
The Bush tax cuts were never paid for, they contributed hundreds of billions of dollars to the deficit, and not one single Republican demanded that they be paid for. Not one single Republican insisted that any part of the $3 trillion invasion of Iraq be paid for, Republicans now insist that there be $700 billion in new tax breaks, large breaks for the rich, and they insist that they be added to the deficit without any compensating taxes being collected, or cuts be made. But for the $18 billion needed to continue unemployment benefits, they demand that cuts be made in programs benefiting the middle class who did not benefit from the trillions in deficit spending during the Bush years.
Republicans always insist that tax cuts not be paid for, that they be added to the general deficit that all taxpayers are responsible for, because they know if they, or Obama, identifies how the tax cuts will be paid for, those paying will revolt and the bill will never get passed, the reason for that is simple: those getting the breaks will not be those who lose the benefits or pay higher fees to replace the money. Just as every action has an equal and opposite reaction, every tax cut leads to increased deficit, higher taxes on someone else, or cutting the benefits that someone else gets. Republicans want to make sure that the "fool in the room" is not warned who will be paying. Note: Warren Buffet has said, that if you do not know who the fool is, then it is you.
Red State Death Panel, Already In Action
After complaining that a public, non-profit option to our bloated, way too expensive private for-profit system would lead to rationing and "death panels", a Republican state, Arizona, has shown exactly how they would work; we have them now. Note that cuts discussed below were passed by the Republican controlled legislature before the new health care bill was passed, so blaming them on cuts by "Obama Care" (as some have tried to) is incorrect.
Arizona Cuts Financing for Transplants Full article
Arizona Cuts Financing for Transplants Full article
"December 2, 2010
Arizona Cuts Financing for Transplant Patients
By MARC LACEY
PHOENIX — Even physicians with decades of experience telling patients that their lives are nearing an end are having difficulty discussing a potentially fatal condition that has arisen in Arizona: Death by budget cut.
Effective at the beginning of October, Arizona stopped financing certain transplant operations under the state’s version of Medicaid. Many doctors say the decision amounts to a death sentence for some low-income patients, who have little chance of survival without transplants and lack the hundreds of thousands of dollars needed to pay for them.
“The most difficult discussions are those that involve patients who had been on the donor list for a year or more and now we have to tell them they’re not on the list anymore,” said Dr. Rainer Gruessner, a transplant specialist at the University of Arizona College of Medicine. “The frustration is tremendous. It’s more than frustration.”
"Organ transplants are already the subject of a web of regulations, which do not guarantee that everyone in need of a life-saving organ will receive one. But Arizona’s transplant specialists are alarmed that patients who were in line to receive transplants one day were, after the state’s budget cuts to its Medicaid program, ruled ineligible the next — unless they raised the money themselves.
"Francisco Felix, 32, a father of four who has hepatitis C and is in need of a liver, received news a few weeks ago that a family friend was dying and wanted to donate her liver to him. But the budget cuts meant he no longer qualified for a state-financed transplant.
...
"If the Legislature does decide to reconsider the cuts, one of the affected people, a plumber and father of three named Randy Shepherd, 36 (photo below), who has an ailing heart and needs a transplant, plans to attend the debate.
“I’m trying not to take it personally,” he said of being cut out of the program. “None of the politicians had heard of me when they made their decision. They didn’t say, ‘Let’s kill this guy.’ ”
Full article
Monday, November 29, 2010
Winning the Class War - Part III - Unions
The benefits from union membership to society are clear, and yet the Republicans and some conservative Democrats try to blame unions for everything, as though wanting health care, decent pay that shows respect for the worker, and the ability to put some money aside for your children's education and your own retirement, are not normal and worthy goals.
The "right-to-work" law in Virginia is an example: look at the states that have no laws taking the benefits of organizing away from worker, most are the "Blue" states and they (until the recent Wall Street caused recession) were doing very well. California, New York, Connecticut, and Maryland are examples of Blue states that not only have wages higher than(say) Virginia, Texas, Louisiana, and Georgia, they also pay the taxes needed to keep afloat many Red sates like Alaska, North and South Dakota, South Carolina, Georgia, and Florida. If you are looking for the states needing, and demanding, the most in public benefits, you are looking for right-to-work states. There may be another reason why Alaska needs $2 in public spending while it generates $1 federal taxes, but if they can't stand on their own two feet, why are they lecturing the rest of us? When you talk about cutting taxes and spending, remember that Virginia gets $1.50 in federal jobs, mostly in the Northern Virginia and the Tidewater regions, for every $1 we pay in federal taxes. Cutting $1 in taxes will cut atl least $1 in spending right here, and perhaps a lot more. After all, Alaska is not going to give up $2 for every dollar they pay in lower taxes, and they have two senators, just like we do. The only states that might really benefit are the Blue states; they would like to see less of their money going to states that expect the government to keep them afloat.
And it is not just union states: Germany has strong labor unions that set most of the wage scales and working conditions in the county, they have full national health at a cost that would save close to $1 trillion if it was standard in the USA, at least four weeks of annual leave, by law, and U.S. has recently had to ask the German government to buy more from the U.S.A.; the Germans can do with union workers, what U.S. employers can not do with labor they refuse to even pay a living wage to; Germany has strong exports to the USA, China, and the EU. It is not for union workers to slow down, it is for the USA to catch up.
CEOs may find unions annoying, it is always easier to please just the few who are very rich, but nations with a strong union presence give voice the people, which is what a democracy is supposed to be about, not just voice to those who can afford the most ads on television. When labor has voice, things get better for everyone. The United States is behind most industrial nations in many significant areas, and two that are of interest to every family are infant mortality and life expectancy.
Infant Mortality: According to the CIA World Fact Book, the the USA has 6.14 infant deaths for every 1,000 births. is much worse than Sweden (2.74), Iceland (3.21), France (3.31), Spain (3.42), NOrway (3.55), Germany (3.95), Switzerland (4.12), Netherlands (4.66), Taiwan (5.26), and Cuba (5.72) (not all countries are reported here)
Life Expectancy: The USA ranks 49th, behind Japan, Australia, Canada, France, Sweden, Switzerland, Netherlands, Luxembourg, Germany, Belgium, Finland, South Korea, Puerto Rico, Denmark.
The Republicans in congress, and some Democrats, blame union teachers for not doing a better job of educating this nation's children, but neither the congress nor the parents are able to tell this nation's young people that a high school education leads to job with respect and dignity, paying a living wage, or a chance to go to college, and get an even better job.
Let's blame the union teachers for not preparing students when the congress can show that if the students are properly prepared, the result is a reasonable share of the products and services they produce; respect and a living wage.
The "right-to-work" law in Virginia is an example: look at the states that have no laws taking the benefits of organizing away from worker, most are the "Blue" states and they (until the recent Wall Street caused recession) were doing very well. California, New York, Connecticut, and Maryland are examples of Blue states that not only have wages higher than(say) Virginia, Texas, Louisiana, and Georgia, they also pay the taxes needed to keep afloat many Red sates like Alaska, North and South Dakota, South Carolina, Georgia, and Florida. If you are looking for the states needing, and demanding, the most in public benefits, you are looking for right-to-work states. There may be another reason why Alaska needs $2 in public spending while it generates $1 federal taxes, but if they can't stand on their own two feet, why are they lecturing the rest of us? When you talk about cutting taxes and spending, remember that Virginia gets $1.50 in federal jobs, mostly in the Northern Virginia and the Tidewater regions, for every $1 we pay in federal taxes. Cutting $1 in taxes will cut atl least $1 in spending right here, and perhaps a lot more. After all, Alaska is not going to give up $2 for every dollar they pay in lower taxes, and they have two senators, just like we do. The only states that might really benefit are the Blue states; they would like to see less of their money going to states that expect the government to keep them afloat.
And it is not just union states: Germany has strong labor unions that set most of the wage scales and working conditions in the county, they have full national health at a cost that would save close to $1 trillion if it was standard in the USA, at least four weeks of annual leave, by law, and U.S. has recently had to ask the German government to buy more from the U.S.A.; the Germans can do with union workers, what U.S. employers can not do with labor they refuse to even pay a living wage to; Germany has strong exports to the USA, China, and the EU. It is not for union workers to slow down, it is for the USA to catch up.
CEOs may find unions annoying, it is always easier to please just the few who are very rich, but nations with a strong union presence give voice the people, which is what a democracy is supposed to be about, not just voice to those who can afford the most ads on television. When labor has voice, things get better for everyone. The United States is behind most industrial nations in many significant areas, and two that are of interest to every family are infant mortality and life expectancy.
Infant Mortality: According to the CIA World Fact Book, the the USA has 6.14 infant deaths for every 1,000 births. is much worse than Sweden (2.74), Iceland (3.21), France (3.31), Spain (3.42), NOrway (3.55), Germany (3.95), Switzerland (4.12), Netherlands (4.66), Taiwan (5.26), and Cuba (5.72) (not all countries are reported here)
Life Expectancy: The USA ranks 49th, behind Japan, Australia, Canada, France, Sweden, Switzerland, Netherlands, Luxembourg, Germany, Belgium, Finland, South Korea, Puerto Rico, Denmark.
The Republicans in congress, and some Democrats, blame union teachers for not doing a better job of educating this nation's children, but neither the congress nor the parents are able to tell this nation's young people that a high school education leads to job with respect and dignity, paying a living wage, or a chance to go to college, and get an even better job.
Let's blame the union teachers for not preparing students when the congress can show that if the students are properly prepared, the result is a reasonable share of the products and services they produce; respect and a living wage.
Sunday, November 28, 2010
Winning the Class War - Part II
The War Against Wages
By PAUL KRUGMAN
Published: 6 October 2006
By PAUL KRUGMAN
Published: 6 October 2006
"... after-tax corporate profits have more than doubled, because workers’ productivity is up, but their wages aren’t — and because companies have dealt with rising health insurance premiums by denying insurance to ever more workers.
"If you want to see how the war against wages is being fought, and what it’s doing to working Americans and their families, consider the latest news from Wal-Mart. an internal Wal-Mart memo conceded that 46 percent of its workers’ children were either on Medicaid or lacked health insurance. Nonetheless, the memo expressed concern that wages and benefits were rising, in part “because we pay an associate more in salary and benefits as his or her tenure increases.”
"The problem from the company’s point of view, then, is that its workers are too loyal; it wants cheap labor that doesn’t hang around too long, but not enough workers quit before acquiring the right to higher wages and benefits. Among the policy changes the memo suggested to deal with this problem was a shift to hiring more part-time workers, which “will lower Wal-Mart’s health care enrollment.”
"And the strategy is being put into effect. “Investment analysts and store managers,” reports The New York Times, “say Wal-Mart executives have told them the company wants to transform its work force to 40 percent part-time from 20 percent.” Another leaked Wal-Mart memo describes a plan to impose wage caps, so that long-term employees won’t get raises. And the company is taking other steps to keep workers from staying too long: in some stores, according to workers, “managers have suddenly barred older employees with back or leg problems from sitting on stools.”
Read full article.
One might think that all the stores could remain competitive by being just as mean (cheap) as Wal-Mart, and that way they could survive, but anyone thinking that be willing to see all workers removed from the class of people that buy things (low wages may mean food, but not rent) and they would need "safety net" services like food stamps, medical care at the emergency room (suggested by president George W. Bush), and HUD housing; lots of services when they are paying almost no taxes. So if everyone socializes all their labor costs, there are no taxes to pay those costs. The second reason that low wages all around will not work is that a manger who is making a living wage can tell a worker that the "company" can not afford to pay a wage that respects his/her work, but mom and pop operations actually have to see and work with the people that they are denying a living wage, and being decent people, they can not be as rude as Wal-Mart,so they pay a bit more, and, in the fullness of time, are pushed over a cliff by the Wal-Marts of the world.
Krugman covers this in his blog, if Wal-Mart pays 40% of its workers minimum wage, and another company pays (just) 15% of its workers the minimum wage, Wal-Mart will have lower labor costs (even if the cost to the taxpayer is much higher) and Wall-Mart wins, pays less in taxes and then benefits have to be cut. It is a win-win for Wal-Mart and lose-lose for those in this country who do not want to see us turn into another India with a huge untouchable class.
Saturday, November 27, 2010
Winning the Class War - Part I
Catherine Rampell reports in the New York Times (23 November 2010), "The nation’s workers may be struggling, but American companies just had their best quarter ever...American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago...As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output." (note that the aggregate profit for just six months is as large as the stimulus bill which is spread over three years).
Also in the news, "Real estate agents say Wall Street executives have already begun lining up rentals in the Hamptons for next summer. Dolly Lenz of Prudential Douglas Elliman said the bidding this year was “hotter and heavier” than previous years. “There is a passion now in the market I haven’t seen in a while,” she said.
"She said her clients, almost exclusively from Wall Street, were afraid to lose out. Just recently, Ms. Lenz said, she had three people bidding more than $400,000 for a summer rental in Southampton."
In order to help their bottom line, CEOs have been cutting positions and wages, while corporate profits set records. Bonuses for CEOs are up, as are dividends to stock holders. It is mainly the workers who feel the pain.
Sharron:"It's a daily struggle at this point not to be paralyzed by despair. I am 46, college-educated with excellent references and great skills. I've been told many times I have a great resume. I don't want to be on unemployment. I want a job, but don't even get any interviews."
Read More at True Majority
Full Article Winning the Class War"
By BOB HERBERT
The class war that no one wants to talk about continues unabated.
Even as millions of out-of-work and otherwise struggling Americans are tightening their belts for the holidays, the nation’s elite are lacing up their dancing shoes and partying like royalty as the millions and billions keep rolling in.
Recessions are for the little people, not for the corporate chiefs and the titans of Wall Street who are at the heart of the American aristocracy. They have waged economic warfare against everybody else and are winning big time.
The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever. As The Times reported this week, U.S. firms earned profits at an annual rate of $1.659 trillion in the third quarter — the highest total since the government began keeping track more than six decades ago.
The corporate fat cats are becoming alarmingly rotund. Their profits have surged over the past seven quarters at a pace that is among the fastest ever seen, and they can barely contain their glee. On the same day that The Times ran its article about the third-quarter surge in profits, it ran a piece on the front page that carried the headline: “With a Swagger, Wallets Out, Wall Street Dares to Celebrate.”
Anyone who thinks there is something beneficial in this vast disconnect between the fortunes of the American elite and those of the struggling masses is just silly. It’s not even good for the elite.
There is no way to bring America’s consumer economy back to robust health if unemployment is chronically high, wages remain stagnant and the jobs that are created are poor ones. Without ordinary Americans spending their earnings from good jobs, any hope of a meaningful, long-term recovery is doomed.
More
Update 27 November
The New York Times November 27, 2010 (Full Editorial)
The Unemployed Held Hostage, Again
It is hard to believe, as the holidays approach yet again amid economic hard times, but Congress looks as if it may let federal unemployment benefits lapse for the fourth time this year.
Lame duck lawmakers will have only one day when they return to work on Monday to renew the expiring benefits. If they don’t, two million people will be cut off in December alone. This lack of regard for working Americans is shocking. Last summer, benefits were blocked for 51 days, as senators in both parties focused on preserving tax breaks for wealthy money managers and other affluent constituents.
This time, tax cuts for the rich are bound to drive and distort the debate again. Republicans and Democrats will almost certainly link the renewal of jobless benefits to an extension of the high-end Bush-era tax cuts. That would be a travesty. There is no good argument for letting jobless benefits expire, or for extending those cuts.
The recession that began in 2007 has led to the worst unemployment in nearly 30 years. We have record levels of long-term unemployment. The jobless rate, 9.6 percent, has been essentially unchanged since May, and nearly 42 percent of the 14.8 million jobless workers have been sidelined for six months or more.
Some opponents of unemployment benefits — mostly Republicans but a few Democrats as well — would have you believe those figures are evidence of laziness, enabled by generous benefits. They conveniently ignore three facts. One, there are five unemployed people for every job opening — a profound scarcity of jobs. Two, federal benefits average $290 a week, about half of what the typical family spends on basics and hardly enough to dissuade someone from working. Three, as unemployment has deepened, benefits have become less generous. Earlier this year, lawmakers ended a subsidy to help unemployed workers pay for health insurance and dropped an extra $25 a week that had been added to benefits by last year’s stimulus law. More
Also in the news, "Real estate agents say Wall Street executives have already begun lining up rentals in the Hamptons for next summer. Dolly Lenz of Prudential Douglas Elliman said the bidding this year was “hotter and heavier” than previous years. “There is a passion now in the market I haven’t seen in a while,” she said.
"She said her clients, almost exclusively from Wall Street, were afraid to lose out. Just recently, Ms. Lenz said, she had three people bidding more than $400,000 for a summer rental in Southampton."
In order to help their bottom line, CEOs have been cutting positions and wages, while corporate profits set records. Bonuses for CEOs are up, as are dividends to stock holders. It is mainly the workers who feel the pain.
Sharron:"It's a daily struggle at this point not to be paralyzed by despair. I am 46, college-educated with excellent references and great skills. I've been told many times I have a great resume. I don't want to be on unemployment. I want a job, but don't even get any interviews."Read More at True Majority
Full Article Winning the Class War"
By BOB HERBERT
The class war that no one wants to talk about continues unabated.
Even as millions of out-of-work and otherwise struggling Americans are tightening their belts for the holidays, the nation’s elite are lacing up their dancing shoes and partying like royalty as the millions and billions keep rolling in.
Recessions are for the little people, not for the corporate chiefs and the titans of Wall Street who are at the heart of the American aristocracy. They have waged economic warfare against everybody else and are winning big time.
The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever. As The Times reported this week, U.S. firms earned profits at an annual rate of $1.659 trillion in the third quarter — the highest total since the government began keeping track more than six decades ago.
The corporate fat cats are becoming alarmingly rotund. Their profits have surged over the past seven quarters at a pace that is among the fastest ever seen, and they can barely contain their glee. On the same day that The Times ran its article about the third-quarter surge in profits, it ran a piece on the front page that carried the headline: “With a Swagger, Wallets Out, Wall Street Dares to Celebrate.”
Anyone who thinks there is something beneficial in this vast disconnect between the fortunes of the American elite and those of the struggling masses is just silly. It’s not even good for the elite.
There is no way to bring America’s consumer economy back to robust health if unemployment is chronically high, wages remain stagnant and the jobs that are created are poor ones. Without ordinary Americans spending their earnings from good jobs, any hope of a meaningful, long-term recovery is doomed.
More
Update 27 November
The New York Times November 27, 2010 (Full Editorial)
The Unemployed Held Hostage, Again
It is hard to believe, as the holidays approach yet again amid economic hard times, but Congress looks as if it may let federal unemployment benefits lapse for the fourth time this year.
Lame duck lawmakers will have only one day when they return to work on Monday to renew the expiring benefits. If they don’t, two million people will be cut off in December alone. This lack of regard for working Americans is shocking. Last summer, benefits were blocked for 51 days, as senators in both parties focused on preserving tax breaks for wealthy money managers and other affluent constituents.
This time, tax cuts for the rich are bound to drive and distort the debate again. Republicans and Democrats will almost certainly link the renewal of jobless benefits to an extension of the high-end Bush-era tax cuts. That would be a travesty. There is no good argument for letting jobless benefits expire, or for extending those cuts.
The recession that began in 2007 has led to the worst unemployment in nearly 30 years. We have record levels of long-term unemployment. The jobless rate, 9.6 percent, has been essentially unchanged since May, and nearly 42 percent of the 14.8 million jobless workers have been sidelined for six months or more.
Some opponents of unemployment benefits — mostly Republicans but a few Democrats as well — would have you believe those figures are evidence of laziness, enabled by generous benefits. They conveniently ignore three facts. One, there are five unemployed people for every job opening — a profound scarcity of jobs. Two, federal benefits average $290 a week, about half of what the typical family spends on basics and hardly enough to dissuade someone from working. Three, as unemployment has deepened, benefits have become less generous. Earlier this year, lawmakers ended a subsidy to help unemployed workers pay for health insurance and dropped an extra $25 a week that had been added to benefits by last year’s stimulus law. More
Data Sources (thanks to economist Paul Krugman)
You can get corporate profits from the Bureau of Economic Analysis. I compared 1st quarter 2000, the time of the Dow’s previous peak, with 2nd quarter 2006, the most recent available. Data is here, line 15.
A good summary graph on productivity and wages, from the Economic Policy Institute’s “State of Working America,” is at stateofworkingamerica.org.
Real median weekly earnings — the amount a typical worker earns, adjusted for inflation – were lower in the second quarter of 2006 than in the first quarter of 2000. See Bureau of Labor Statistics data, here.
Friday, November 26, 2010
Be Glad You Don't Live in Ireland
Ireland was the darling of capitalists, the "Celtic Tiger", a nation with low taxes, and an educated work force speaking a brand of English that we can understand. Low corporate taxes, and not much bank regulation either. Now it has gone all sour, and rather than the banks and investors taking the hit, most of it has been handed to the taxpayers (those have have not left the country).
Ireland has treated their citizens just about exactly as Republicans George Bush and John Boehner have done, or proposed, for U,S. citizens and the result has been a disaster compounded. The banks and investors have been bailed out (just as Bush bailed out the banks and AIG),and public benefits have been cut, along with wages, including the minimum wage, with no stimulus package, all as Boehner has proposed is what we should have done.
The results show why we do not want to follow the Irish model, and why the stimulus, barely 3% of gross domestic product, has not done as much as we hoped, but stopping the loss of jobs improved our situation in 2009, but did not create a climate that makes people want to hire anyone. Right now consumers want to wait and see if things get better, especially job security. Ireland spent less (no stimulus), made huge cuts in spending and the economy has spiraled down.
Ireland has a very low corporate tax rate,part of a "beggar thy neighbor" plan that has worked, attracting U.S. businesses like Pfizer and Google to move jobs that might,should, have been in the USA, or even Germany (larger markets), but the firms avoided taxes by moving operations to Ireland. The low tax rates deny Ireland much income that could help them now, but instead of raising the corporate rates, they have pounded public workers, cut services, and raised the tax rates on their own citizens.
Read article on Irish corporate taxesThe result, as Paul Krugman predicted months ago, has been more layoffs, and lower tax revenue as people worried about their jobs cut back on spending.Krugman "Eating the Irish" (for the record, my blog quoting Jonathan Swift appeared five days before Krugman chose a similar from the same author. I am not sure if a third party triggered both of us, but,if so, I don't know who it was. The logic of all who refer to this "Modest Proposal"is the same, that the poor pay the costs of the failures of the rich, but never share in the profits).
http://topics.nytimes.com/top/news/international/countriesandterritories/ireland
The banking disaster has been huge in Ireland, but by putting the costs of failure on the public, assuming private debt for the taxpayer to pay, has led many of Ireland's young people to leave the country, those that have stayed to contemplate leaving, and their parents to wonder how the "Celtic Tiger" could die so quickly, and they get the burial fees.
Ireland
Updated: Nov. 23, 2010
Overview
The economic collapse forced the country to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.
Rather than being rewarded for its actions, though, Ireland has been penalized. Its downturn has been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent in 2009 and remains in recession. Joblessness, which had more than doubled, remained above 13 percent, and housing prices fell by a quarter.
In November the government conceded that it had miscalculated the scale of its debt challenge and announced an additional 15 billion euros in savings over four years, bringing the total sum of tax increases and spending cuts to about 30 percent of Ireland’s total economic output. Investors responded by driving up interest rates on Irish government bonds.
Ireland has treated their citizens just about exactly as Republicans George Bush and John Boehner have done, or proposed, for U,S. citizens and the result has been a disaster compounded. The banks and investors have been bailed out (just as Bush bailed out the banks and AIG),and public benefits have been cut, along with wages, including the minimum wage, with no stimulus package, all as Boehner has proposed is what we should have done.
The results show why we do not want to follow the Irish model, and why the stimulus, barely 3% of gross domestic product, has not done as much as we hoped, but stopping the loss of jobs improved our situation in 2009, but did not create a climate that makes people want to hire anyone. Right now consumers want to wait and see if things get better, especially job security. Ireland spent less (no stimulus), made huge cuts in spending and the economy has spiraled down.
Ireland has a very low corporate tax rate,part of a "beggar thy neighbor" plan that has worked, attracting U.S. businesses like Pfizer and Google to move jobs that might,should, have been in the USA, or even Germany (larger markets), but the firms avoided taxes by moving operations to Ireland. The low tax rates deny Ireland much income that could help them now, but instead of raising the corporate rates, they have pounded public workers, cut services, and raised the tax rates on their own citizens.
Read article on Irish corporate taxesThe result, as Paul Krugman predicted months ago, has been more layoffs, and lower tax revenue as people worried about their jobs cut back on spending.Krugman "Eating the Irish" (for the record, my blog quoting Jonathan Swift appeared five days before Krugman chose a similar from the same author. I am not sure if a third party triggered both of us, but,if so, I don't know who it was. The logic of all who refer to this "Modest Proposal"is the same, that the poor pay the costs of the failures of the rich, but never share in the profits).
http://topics.nytimes.com/top/news/international/countriesandterritories/ireland
The banking disaster has been huge in Ireland, but by putting the costs of failure on the public, assuming private debt for the taxpayer to pay, has led many of Ireland's young people to leave the country, those that have stayed to contemplate leaving, and their parents to wonder how the "Celtic Tiger" could die so quickly, and they get the burial fees.
Ireland
Updated: Nov. 23, 2010
Overview
The economic collapse forced the country to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.
Rather than being rewarded for its actions, though, Ireland has been penalized. Its downturn has been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent in 2009 and remains in recession. Joblessness, which had more than doubled, remained above 13 percent, and housing prices fell by a quarter.
In November the government conceded that it had miscalculated the scale of its debt challenge and announced an additional 15 billion euros in savings over four years, bringing the total sum of tax increases and spending cuts to about 30 percent of Ireland’s total economic output. Investors responded by driving up interest rates on Irish government bonds.
Monday, November 22, 2010
Kill The Beast
“I can’t wait for the blood bath in April. ... When debt limit time comes, they’re going to look around and say, ‘What in the hell do we do now? We’ve got guys who will not approve the debt limit extension unless we give ’em a piece of meat, real meat,’ ” (meaning spending cuts). “And boy, the blood bath will be extraordinary,”
-- Alan Simpson, served from 1979 to 1997 as a United States senator from Wyoming as a member of the Republican Party, and was appointed by President Obama to lead the deficit reduction effort.
Simpson is clearly of the radical branch of Republicans who live to "Starve the Beast." Their idea is that bad little government is better than good large government, especially if it is of the kind that today guides Sweden. That kind negotiated a bank failure without giving any taxpayer money to banks, a socialist government that did not socialize debt but took the banks over, just as FDIC in this country does almost every day (it seems), told the stockholders and managers to go home or to jail, and not take any taxpayer money with them. Then Sweden sold the banks to new investors willing to put their own money up and the Swedish government got out of the banking industry. That is one of the governments types that Simpson does not like.
He does not like the government in the Netherlands, they set the standards for medical care, and full care costs less than $150 per person, per month. Not only does Simpson not like that kind of government, he does not like the democratic governments of France, Switzerland, England, Japan, Germany, Norway, Finland, or Taiwan, all of which provide good low cost medical care that their citizens are happy with, and costs that would save American citizens at least $1 trillion a year.
What Simpson and his ilk really hate is good government doing well, and providing better value to its citizens After all, he was elected to make government better, not to poison it.In fact, while he was a senator, he did not work to end lobbyists writing legislation, he did not work to end the practice for lobbyists contributing to the campaign funds of senators and representatives that they would later approach to ask that taxes on the wealthy be cut, or that some other favor or earmark be included in some bill.
He was part of conspiracy to hollow out agencies so they appear to be working for the American citizens who pay their salaries, but they are staffed by industry insiders who will hand the agency over to the worst instincts of the industry and then go back to better pay, as a reward for betraying the American people. Simpson help convert agencies that were supposed to be protecting citizens, to hollow shells,like movie set buildings, a "Potemkin village" of agencies that never carried out their their obligation to protect the voters from risky business like deep water drilling in the Gulf of Mexico.
Simpson did not think that banks or people like Bernie Madoff needed to be regulated or forced to meet any standards, he voted to deregulate banks. He learned nothing from the savings and loan bailouts in 1980's and 1990's which saw 747 S&Ls fail and cost the U.S. taxpayer $25 billion (out of $160 billion lost). Although it was "only" $25 billion paid directly by the taxpayers, they paid the rest in higher bank fees over a period of time; banks don't go into business to give money away, the consumer has to pay the fees. What Simpson learned from that is that banks will fail, and when they do, the consumer will bail them out.
Simpson's entire service was during the period after 1970, when rich campaign contributors were supporting politicians that cut taxes on the super rich by more than 50% and writing laws to keep unions from representing people that wanted a voice in government, but didn't have enough to buy their own politician. Simpson didn't think that your taxes needed to be cut by 50%, as Republican Senate leader Bob Dole said during this time, the work of people who can not hire lobbyists does not get done by congress.
Today, with so many people out of work, through no fault of their own, Simpson wants to lay off more teachers, police, and firefighters, and add to number of people losing their homes. It is kind of blood that he mentions (quote above) that he is eager to see. Good luck to any country has has people like he is, for politicians.
Now that government is starving, Simpson is glad to be able help kill all the programs, like social security, that the have-mores don't need. After all, the rich have what they want, they used government to get it, a government they bought, the best you can buy. Whose fault is it that the poor, perhaps born poor, or denied good wages by government and laws that denied union workers the benefits of organizing? They should have planned ahead and been born rich.
The good news is that nothing is actually going to happen. The fact that is the good news is sad when we are in some much trouble, but there can be no rape of working families unless some Democrats vote with the Republicans, and that will not happen; all the moderate Democrats are gone. There will be no bipartisan cover for lower taxes for the rich and passing all the bills for a failed banking system to the poor.
Palestine - Peace Not Apartheid
Israeli Soldiers Who Used 9 Year Old As Human Shield Face No Jail Time
Two Israeli soldiers received suspended sentences and demotions on Sunday for using a Palestinian child as a human shield during the 2008-2009 Gaza war, an army spokeswoman said.
The soldiers were convicted on October 3 for forcing a nine-year-old boy to search bags believed to be booby-trapped during Israel's 22-day war on Gaza which erupted in December 2008.
The two, who were not identified, were each given suspended terms of three months imprisonment and were demoted from the rank of staff sergeant to sergeant.
"The two Givati soldiers will be on probation for two years and any violation will result in three months in prison. Their rank will be dropped from staff sergeant to sergeant," she said.
Gerard Horton, a spokesman in the West Bank for Geneva-based rights group Defence for Children International (DCI), described the sentence as "unbelievable."
"Do the Israeli authorities think that a three-month suspended sentence is an appropriate punishment for two heavily-armed soldiers treating a nine-year-old boy as a human shield?"
Sourced from Agence France Presse By Alternet.org November 21, 2010, 12:06 pm (Read the full article)
At a time when U.S. taxpayers are being asked to pay more and accept cuts in the benefits and services that the government provides, Congress does not ask the Israelis to accept less than the $500 for each Israeli citizen in foreign aid that the U.S. taxpayers provide, nor are the billions in foreign aid that the U.S. provides to Egypt and Jordan, in order to rent pals for Israel, being cut.
When a nuclear nation, like the USA, backs another nuclear nation, like Israel, in these kinds of human rights violations (and this kind of thing is inflicted on the Palestinians every single day by the Israelis), there is real danger to the security of these United States. When the people of of Iran, Iraq, Egypt, Lebanon, and even India, see the kind of support we give to a nuclear armed nation committing these kinds of crimes, and handing out what is really no punishment, the pressure by the citizens of those and many other nations, on their leaders to obtain nuclear arms is irresistible. It is not just the leaders of Iran that want to be free of the dictates of the USA and Israel, it most of the citizens. Everyone sees the dangers of letting another nation dictate their rules to you, especially when one of dictators has stolen land and water from every one of its neighbors.
We know that Iran seeks nuclear weapons because our treatment of those who lack nuclear weapons makes any other course irresponsible for a nation that is concerned about the security of its people and territory. We know that Iran seeks nuclear weapons, because, lacking the assurance that a non-nuclear nation will get justice, that is exactly what we would do.
If we want to discourage the proliferation of nuclear weapons we must promote a belief in international law, and support human rights in every part of the world, including Palestine. We do not currently do any of these, and our being seen as tyrants who inflict taxation without representation, will only earn us the usual reward; our soldiers being shot at around the world by people who want to be free of domination by super powers, even if they have to acquire nuclear weapons in order to gain their freedom. No matter how you count, tyranny is costing us more than justice will. It is costing us too much to support Israel in their maintenance of ghettos in Gaza and Lebanon, and possible future costs of not getting a grip on nuclear weapons by showing how to get justice without them, will be staggering and very unpleasant.
Sunday, November 21, 2010
You Fix the Deficit (on paper anyway)
Using an interactive spreadsheet, you can solve the budget deficit, at least figure out a how it can be done. If you want to do a Tea Party cure, just cut spending, and if you are a tax and spend Democrat, just raise taxes. Don't worry, neither of those will happen, and congress will not come up with any plan that you will like, because they spend all day, every day, with lobbyists who want to see money spent, and know that cutting out things you don't like won't be fun. Let's face it, every cut you make results in hundreds (thousands) of lost jobs and thousands of angry voters. Every tax cut increases the deficit but it makes more people happy than sad, and, most important, a $250 benefit for 150 million tax payers will cost $38 billion and the average taxpayer will not send a dime to contribute to funds needed for re-election, but half that, $15 billion, passed out to appreciative lobbyists will generate at least $15 million in campaign funds. Of course, trading $1 billion dollars for $1 million in campaign funds is not a great deal, but the $15 billion was just taxpayer money.
One of the many problems with exercises like this is that you don't really know what any option will do. Will restoring the Clinton tax rates affect you in a negative way? If you make more than $150,000 a year, yes, but not much. If you make more than $1 million a year, it would be more painful. On the other hand, more money from the rich means less from the middle class and it is middle class spending that drives our economy, and it is the lack of money in the pockets of middle class workers that is killing our economy right now.Billionaires buy yachts, not the stuff you make, or the services you provide. If they get more money they will do what they did last year, invest in China. If you get more money, say $250, you will be more likely to "invest" it in a nice new coat, maybe some shoes, and perhaps they will be made in the USA.
Give fixing the budget a try. Just click on the left side of the page to select the changes you want to pick, and watch the sum shown at the top of the page. You can do it. Higher taxes or spending cuts, flip a coin, you are a winner either way.
When you get done and look at the trillions being spent, think about this: wouldn't it cost you a lot less to pay (say) $25 a year to campaign funds and not have your taxes and income determined by lobbyists? Sure it would. You can't own what you won't pay for, so you get bill for those who do pay.
** Budget Puzzle: You Fix the Budget **
One of the many problems with exercises like this is that you don't really know what any option will do. Will restoring the Clinton tax rates affect you in a negative way? If you make more than $150,000 a year, yes, but not much. If you make more than $1 million a year, it would be more painful. On the other hand, more money from the rich means less from the middle class and it is middle class spending that drives our economy, and it is the lack of money in the pockets of middle class workers that is killing our economy right now.Billionaires buy yachts, not the stuff you make, or the services you provide. If they get more money they will do what they did last year, invest in China. If you get more money, say $250, you will be more likely to "invest" it in a nice new coat, maybe some shoes, and perhaps they will be made in the USA.
Give fixing the budget a try. Just click on the left side of the page to select the changes you want to pick, and watch the sum shown at the top of the page. You can do it. Higher taxes or spending cuts, flip a coin, you are a winner either way.
When you get done and look at the trillions being spent, think about this: wouldn't it cost you a lot less to pay (say) $25 a year to campaign funds and not have your taxes and income determined by lobbyists? Sure it would. You can't own what you won't pay for, so you get bill for those who do pay.
** Budget Puzzle: You Fix the Budget **
Saturday, November 20, 2010
Union Workers Start to Abandon Their Children
”I have been assured by a very knowing American of my acquaintance in London, that a young healthy child well nursed is at a year old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled ...”
Jonathan Swift - "A Modest Proposal" (1729) (more)
The New York Times are reporting today that more union workers are agreeing to lower wages for new hires. This means that the children of workers will be getting lower wages than their parents who have doubled productivity in the last 30 years, and not got raises that reflect any part of that; workers have got (after correction for inflation) less than 1% raises a year. Now their children will be going backwards, making even less than than their parents did in 1970. At a time when the economy needs more workers with more money in their pockets, and we can certainly use fewer dollars in the pockets of millionaires and billionaires that will be invested in plants in China to take more jobs away, this is a significant step backwards. Every business wants plenty of customers with money to buy services and products, but no business wants to share in creating the customers that are critical to the survival of the business in the USA. Currently, about 50% of all business income reported by Standard and Poor listed firms, is income from foreign operations. The demand by the (new) Speaker of the House, John Boehner(R-OH) for tax breaks for the rich so they can invest in rising Asian markets, will just make this problem worse. The same money in the pockets of young workers would mostly be spent right here in the U.S.A. Why isn't the investment that customer makes in an existing business in the U.S.A. that is currently operating at less than full capacity (industry average: 75%), just as valuable, or even more valuable, to American citizens, as the same money invested by Goldman Sachs in global hedge funds? Cutting taxes on money that will be invested in taking jobs out of the U.S. A makes no sense at all to other taxpayers, who will have to make up the difference, or accept the cuts in benefits, defense, food inspection, etc.
LOUIS UCHITELLE 20 November 2010 The New York Times (full article)
MILWAUKEE — Organized labor appears to be losing an important battle in the Great Recession.
Even at manufacturing companies that are profitable, union workers are reluctantly agreeing to tiered contracts that create two levels of pay.
In years past, two-tiered systems were used to drive down costs in hard times, but mainly at companies already in trouble. And those arrangements, at the insistence of the unions, were designed, in most cases, to expire in a few years.
Now, the managers of some marquee companies are aiming to make this concession permanent. If they are successful, their contracts could become blueprints for other companies in other cities, extending a wage system that would be a startling retreat for labor.
Though union officials said they could not readily supply data on the practice, managers have been trying to achieve this for 30 years, with limited results. The recent auto crisis brought a two-tier system to General Motors and Chrysler. Delphi, the big parts maker, also has one now. Caterpillar, back in 2006, signed such a contract with the United Automobile Workers.
The arrangement was a fairly common means of shrinking labor costs in the recession of the early 1980s. At the end of the contracts, however, wages generally snapped back up to a single tier. At G.M., Chrysler, Delphi and Caterpillar, the wages will not be snapping back.
Nor will that happen for workers at three big manufacturers here in southeastern Wisconsin — where 15 percent of the work force is in manufacturing, a bigger proportion than any other state. These employers — Harley-Davidson, Mercury Marine and Kohler — have all but succeeded in the last year or so in erecting two-tier systems that could last well into a recovery.
(read full article)
Thursday, November 18, 2010
Eric Cantor, (R-VA) Pledges Alleigence to Israel
Meeting with Israel's Prime Minister Binyamin Netanyahu, prior to Netanyahu's meeting U.S. Secretary of State, Hillary Clinton, the incoming House Majority Leader, Eric Cantor (R-VA), pledged that he would support Israel against the president of the United States.
His office said, "Eric stressed that the new Republican majority will serve as a check on the Administration and what has been, up until this point, one party rule in Washington...He made clear that the Republican majority understands the special relationship between Israel and the United States, and that the security of each nation is reliant upon the other."
In effect, Cantor told Netanyahu, "I'm with you, not my president. I accept that the United States of America can not defend itself without the aid and support of Israel." Israel über alles.
In choosing to support a nation that has spied on the U.S.,has attacked a U.S. warship, the USS Liberty (read article), killing 34 servicemen and injuring more than 100 others (it remains "the only maritime incident in U.S. history where [U.S.] military forces were killed that was never investigated by the [U.S.] Congress."), has engaged in (and not denied) the ethnic cleansing of Palestine, has encouraged Christian militias slaughter Palestinians seeking refuge in Lebanon, sold arms to enemies of the U.S., has refused to implement U.N Security Council (UNSC) resolutions, continues to occupy portions of four of its neighbors seized by force, maintains millions of Palestinians in ghettos, has sold U.S. military secrets to China, and is daily guilty of human rights violations, Cantor supports his religion, not his nation.
Backing a nation that does not implement UNSC resolutions which have been approved by the United States of America, makes it clear to nations like Iran that if you have nuclear weapons, as Israel does, you need can ignore the U.N., and if you chose, ignore the U.S.A. as well. Backing a nuclear state that has taken land by force from Lebanon, Syria, Jordan, and Egypt, and maintains people that they call "sand niggers" in poverty, makes the spread of nuclear weapons inevitable as nations now threatened seek a balance of power; mutual assured destruction (MAD) in case of war.
While people like Cantor see the current situation (Israel has nukes, but no Arab state does) as desirable, it is clear that Arab countries see that the possession of nuclear weapons allows states to act with injustice, and the choice is get nuclear weapons or suffer. That is the road to disaster, as a nuclear weapon on a raft can clear both customs and Wall Street in less than a second. Cantor's actions in backing injustice by states possessing nuclear weapons puts every American at risk of economic disaster, and every person in or near the nation's capital at risk of radiation poisoning or worse. The justification of nuclear weapons will lead to proliferation and a single nuclear explosion in the U.S.A. will make every advantage that Cantor offers his beloved Israel worthless. 99.9% protection is not enough in a nuclear attack. As scientist Ralph Lapp once said, it is like catching all but one of the rocks aimed at a glass window. Relying on nuclear weapons, or promoting the use or threat of use, of any weapon from which we require 100% protection, is pure madness.
Cantor has said that Israel can ignore basic human rights (the right of Palestinians removed by ethnic cleansing to return to the land that is their patrimony), ignore UNSC resolution 242, and Israel can maintain a people in slavery, an apartheid state. When you grant those "rights" to a nuclear nation, and threaten to bomb or invade a nation that has never threatened or attacked you, actions you would not take if those could assure your paying the price you would extract, the lesson is clear: get nuclear weapons. The reason we are sure that Iran is getting nuclear weapons is that we, ourselves, would do exactly that were we in the same situation.
Cantor proposes that a nuclear Armageddon is to be preferred over equal justice for Palestinians living both in and around Israel. In other words that we put this nation at risk to defend Israel's right to prejudice and a state religion; an anathema to our own constitution, and nowhere allowed in our nation's laws. It is certainly a crime to use taxpayer funds to promote a state religion outside of our borders, and for one of our representatives to propose that his favored state, his religion, his ancestors be supported in their violation of human rights, ethnic cleansing, and the use of nuclear weapons as a threat, an action that puts every U.S. citizen at risk, without respect to their own views of justice or religion, is an outrage.
Cantor does not stand up for the roughly 50% of Israeli citizens who see the settlements as an obstacle to peace, or those who are ashamed of Israel's ethnic cleansing of Palestine. Cantor sees peace as the result of murder, rape, and theft, while many Israelis look for peace through justice for all. Cantor turns his back on the efforts of Pope John Paul II to lift the yoke of Israel off the necks of the Palestinians, the message of Martin Luther King's life, and the teaching of Rabbi Hillel, “What is hateful to thyself do not do to another. That is the whole Law, the rest is Commentary.”
From the Washington Post (Read Story)
By Dana Milbank
Eric Cantor seems to be settling in well as secretary of state. Technically, his position is expected to be majority leader of the House next year, but he is already operating his own foreign policy. He held a meeting with Israeli Prime Minister Benjamin Netanyahu and, according to the congressman's office, "stressed that the new Republican majority will serve as a check on the administration" in U.S.-Israel relations. As the administration seeks ways to revive peace talks in the region, it must be reassuring to all sides that Cantor will serve as a vital check on peacemaking efforts.
From Politico (Read full Politico story)
11 Nov 2010
Laura Rosen
"Last night, Netanyahu met in New York for over an hour with incoming House Majority Leader Rep. Eric Cantor (R-Va.), who is set to become the highest ranking Jewish member of Congress in history. The meeting took place at New York’s Regency Hotel, and included no other American lawmakers besides Cantor. Also attending on the Israeli side were Israeli Ambassador to the U.S. Michael Oren, and Netanyahu’s National Security Advisor Uzi Arad.
"Israeli sources characterized a one-on-one meeting between an Israeli prime minister and a lone American lawmaker as unusual, if not unheard of. Cantor's office did not think that Cantor and the Prime Minister had held a one-on-one meeting before.
"Eric has a longstanding friendship with Prime Minister Netanyahu and appreciated the opportunity to catch up last evening," Cantor's office said in a readout of the meeting it provided. Their discussion "covered a range of topics that included Iran, the United Nations, and the recent U.S. election which saw the Republicans win the majority in the House."
"On Iran, "Eric made clear that he believes that it is time for the administration to fully and aggressively implement the Iran Sanctions Act passed by Congress earlier this year," it said. "Unless the Administration continues to ratchet up the pressure on the Iranian regime, the progress made by the sanctions already implemented will unravel," he opined.
Cantor also "reiterated his belief that compromise between Israel and the Palestinians can only be achieved through direct negotiations between the parties." He urged the Obama administration to "make it absolutely clear that the U.S. will veto any effort by the Palestinians" to seek recognition of their state by going to the United Nations."
His office said, "Eric stressed that the new Republican majority will serve as a check on the Administration and what has been, up until this point, one party rule in Washington...He made clear that the Republican majority understands the special relationship between Israel and the United States, and that the security of each nation is reliant upon the other."
In effect, Cantor told Netanyahu, "I'm with you, not my president. I accept that the United States of America can not defend itself without the aid and support of Israel." Israel über alles.
In choosing to support a nation that has spied on the U.S.,has attacked a U.S. warship, the USS Liberty (read article), killing 34 servicemen and injuring more than 100 others (it remains "the only maritime incident in U.S. history where [U.S.] military forces were killed that was never investigated by the [U.S.] Congress."), has engaged in (and not denied) the ethnic cleansing of Palestine, has encouraged Christian militias slaughter Palestinians seeking refuge in Lebanon, sold arms to enemies of the U.S., has refused to implement U.N Security Council (UNSC) resolutions, continues to occupy portions of four of its neighbors seized by force, maintains millions of Palestinians in ghettos, has sold U.S. military secrets to China, and is daily guilty of human rights violations, Cantor supports his religion, not his nation.
Backing a nation that does not implement UNSC resolutions which have been approved by the United States of America, makes it clear to nations like Iran that if you have nuclear weapons, as Israel does, you need can ignore the U.N., and if you chose, ignore the U.S.A. as well. Backing a nuclear state that has taken land by force from Lebanon, Syria, Jordan, and Egypt, and maintains people that they call "sand niggers" in poverty, makes the spread of nuclear weapons inevitable as nations now threatened seek a balance of power; mutual assured destruction (MAD) in case of war.
While people like Cantor see the current situation (Israel has nukes, but no Arab state does) as desirable, it is clear that Arab countries see that the possession of nuclear weapons allows states to act with injustice, and the choice is get nuclear weapons or suffer. That is the road to disaster, as a nuclear weapon on a raft can clear both customs and Wall Street in less than a second. Cantor's actions in backing injustice by states possessing nuclear weapons puts every American at risk of economic disaster, and every person in or near the nation's capital at risk of radiation poisoning or worse. The justification of nuclear weapons will lead to proliferation and a single nuclear explosion in the U.S.A. will make every advantage that Cantor offers his beloved Israel worthless. 99.9% protection is not enough in a nuclear attack. As scientist Ralph Lapp once said, it is like catching all but one of the rocks aimed at a glass window. Relying on nuclear weapons, or promoting the use or threat of use, of any weapon from which we require 100% protection, is pure madness.
Cantor has said that Israel can ignore basic human rights (the right of Palestinians removed by ethnic cleansing to return to the land that is their patrimony), ignore UNSC resolution 242, and Israel can maintain a people in slavery, an apartheid state. When you grant those "rights" to a nuclear nation, and threaten to bomb or invade a nation that has never threatened or attacked you, actions you would not take if those could assure your paying the price you would extract, the lesson is clear: get nuclear weapons. The reason we are sure that Iran is getting nuclear weapons is that we, ourselves, would do exactly that were we in the same situation.
Cantor proposes that a nuclear Armageddon is to be preferred over equal justice for Palestinians living both in and around Israel. In other words that we put this nation at risk to defend Israel's right to prejudice and a state religion; an anathema to our own constitution, and nowhere allowed in our nation's laws. It is certainly a crime to use taxpayer funds to promote a state religion outside of our borders, and for one of our representatives to propose that his favored state, his religion, his ancestors be supported in their violation of human rights, ethnic cleansing, and the use of nuclear weapons as a threat, an action that puts every U.S. citizen at risk, without respect to their own views of justice or religion, is an outrage.
Cantor does not stand up for the roughly 50% of Israeli citizens who see the settlements as an obstacle to peace, or those who are ashamed of Israel's ethnic cleansing of Palestine. Cantor sees peace as the result of murder, rape, and theft, while many Israelis look for peace through justice for all. Cantor turns his back on the efforts of Pope John Paul II to lift the yoke of Israel off the necks of the Palestinians, the message of Martin Luther King's life, and the teaching of Rabbi Hillel, “What is hateful to thyself do not do to another. That is the whole Law, the rest is Commentary.”
From the Washington Post (Read Story)
By Dana Milbank
Eric Cantor seems to be settling in well as secretary of state. Technically, his position is expected to be majority leader of the House next year, but he is already operating his own foreign policy. He held a meeting with Israeli Prime Minister Benjamin Netanyahu and, according to the congressman's office, "stressed that the new Republican majority will serve as a check on the administration" in U.S.-Israel relations. As the administration seeks ways to revive peace talks in the region, it must be reassuring to all sides that Cantor will serve as a vital check on peacemaking efforts.
From Politico (Read full Politico story)
11 Nov 2010
Laura Rosen
"Last night, Netanyahu met in New York for over an hour with incoming House Majority Leader Rep. Eric Cantor (R-Va.), who is set to become the highest ranking Jewish member of Congress in history. The meeting took place at New York’s Regency Hotel, and included no other American lawmakers besides Cantor. Also attending on the Israeli side were Israeli Ambassador to the U.S. Michael Oren, and Netanyahu’s National Security Advisor Uzi Arad.
"Israeli sources characterized a one-on-one meeting between an Israeli prime minister and a lone American lawmaker as unusual, if not unheard of. Cantor's office did not think that Cantor and the Prime Minister had held a one-on-one meeting before.
"Eric has a longstanding friendship with Prime Minister Netanyahu and appreciated the opportunity to catch up last evening," Cantor's office said in a readout of the meeting it provided. Their discussion "covered a range of topics that included Iran, the United Nations, and the recent U.S. election which saw the Republicans win the majority in the House."
"On Iran, "Eric made clear that he believes that it is time for the administration to fully and aggressively implement the Iran Sanctions Act passed by Congress earlier this year," it said. "Unless the Administration continues to ratchet up the pressure on the Iranian regime, the progress made by the sanctions already implemented will unravel," he opined.
Cantor also "reiterated his belief that compromise between Israel and the Palestinians can only be achieved through direct negotiations between the parties." He urged the Obama administration to "make it absolutely clear that the U.S. will veto any effort by the Palestinians" to seek recognition of their state by going to the United Nations."
In Politics, The Truth Doesn't Count
Before the days of internet, when people used candles to read by after dark, Mark Twain said, "“A lie can travel halfway around the world while the truth is putting on its shoes.”
When being interviewed by Anderson Cooper on CNN, Representative Michele Bachmann (R-MN) said, “I think we know that just within a day or so the president of the United States will be taking a trip over to India that is expected to cost the taxpayers $200 million a day. He’s taking 2,000 people with him. He’ll be renting over 870 rooms in India, and these are five-star hotel rooms at the Taj Mahal Palace Hotel. This is the kind of over-the-top spending.”
That was a lie that got all the way around the world, and was repeated by Right-wing commentators again and again. Not a word of it is true. A similar trip by Bill Clinton cost just over $5 million a day, and the war in Afghanistan costs less than $200 million a day.
It is too bad that elected officials repeat lies, but it does make you realize why they vote against the interests of working families time and time again, they don't know the facts and they don't care to check; they benefit from lies and a "good lie" can't be wasted by the truth.
Full article on this topic "Too Good to Check" by Thomas L. Friedman
http://www.nytimes.com/2010/11/17/opinion/17friedman.html?src=me&ref=general
As Upton Sinclair might have said, It is difficult to get a member of congress to understand the facts when their campaign contributions depend on their not understanding." Lying in politics is considered part of the game but when the stakes are your future, your income, and your security, lying is not a game, it is class warfare.
(What Sinclair actually said)
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
Upton Sinclair, Jr. (September 20, 1878 – November 25, 1968), was a Pulitzer Prize-winning American author who wrote over 90 books in many genres. He achieved popularity in the first half of the 20th century, acquiring particular fame for his 1906 muckraking novel The Jungle. It exposed conditions in the U.S. meat packing industry, causing a public uproar that contributed in part to the passage a few months later of the 1906 Pure Food and Drug Act and the Meat Inspection Act.
http://en.wikipedia.org/wiki/Upton_Sinclair
When being interviewed by Anderson Cooper on CNN, Representative Michele Bachmann (R-MN) said, “I think we know that just within a day or so the president of the United States will be taking a trip over to India that is expected to cost the taxpayers $200 million a day. He’s taking 2,000 people with him. He’ll be renting over 870 rooms in India, and these are five-star hotel rooms at the Taj Mahal Palace Hotel. This is the kind of over-the-top spending.”
That was a lie that got all the way around the world, and was repeated by Right-wing commentators again and again. Not a word of it is true. A similar trip by Bill Clinton cost just over $5 million a day, and the war in Afghanistan costs less than $200 million a day.
It is too bad that elected officials repeat lies, but it does make you realize why they vote against the interests of working families time and time again, they don't know the facts and they don't care to check; they benefit from lies and a "good lie" can't be wasted by the truth.
Full article on this topic "Too Good to Check" by Thomas L. Friedman
http://www.nytimes.com/2010/11/17/opinion/17friedman.html?src=me&ref=general
As Upton Sinclair might have said, It is difficult to get a member of congress to understand the facts when their campaign contributions depend on their not understanding." Lying in politics is considered part of the game but when the stakes are your future, your income, and your security, lying is not a game, it is class warfare.
(What Sinclair actually said)
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
Upton Sinclair, Jr. (September 20, 1878 – November 25, 1968), was a Pulitzer Prize-winning American author who wrote over 90 books in many genres. He achieved popularity in the first half of the 20th century, acquiring particular fame for his 1906 muckraking novel The Jungle. It exposed conditions in the U.S. meat packing industry, causing a public uproar that contributed in part to the passage a few months later of the 1906 Pure Food and Drug Act and the Meat Inspection Act.
http://en.wikipedia.org/wiki/Upton_Sinclair
Tuesday, November 16, 2010
Left, Right, and Wrong on Taxes
Glenn Hubbard, the dean of Columbia Business School and the co-author of “Seeds of Destruction,” was a chairman of the Council of Economic Advisers under President George W. Bush. He has written an editorial (op-ed) in the New York Times (read the article) in which he states that lower taxes on the wealthy would be good for investment, as would cutting "spending" (read: jobs) by the federal government.
Hubbard, who was adviser to George W. Bush, was also the deputy assistant Treasury secretary for Tax Policy in the Bush I administration, so he advised two of the three presidents who choose cut taxes and not to cut spending, all of which led to huge deficits (see chart below). In fact, George W. Bush started a $3 trillion war of choice in Iraq and became the first president to start a war and not raise a penny to pay for it; he put the whole thing on a Chinese credit card.
If cutting taxes and increasing spending was the key to job creation, the economy would have exploded under but George W. Bush, but it did not. When Bush came to office 2000, the stock market was 10,000 and when he left in 2008, the stock market was 10,000. If you have a 401k retirement fund, it was a wasted decade. If Hubbard's concepts made any sense at all, George W. Bush and his credit card economy would have created an explosion of jobs, at least more than the eight years that Clinton was in office had created. That didn't happen. Taking Hubbard's advice the stock market was 0 for ten years, the deficit went way up, sub-prime loans went crazy, the banks and AIG had to be bailed out, and employment went into the toilet.
Hubbard argues that more money in the hands of the few would lead to greater investment, true, but the question is where would that investment be? More money in the hands of then middle class consumers in the USA would lead them to "investment" in local businesses and services, whereas greater investment in emerging markets like China, would lead to greater competition for U.S. workers, more job loss, and a larger deficit. This country is currently not short of money for investment, in fact, we have 25% of our existing capacity sitting idle. Until much of that capacity is put back to work, that is, until our consumers have some money to spend and assurance that their jobs are not likely to be eliminated, there is no reason to imagine that investors will be rushing to invest in even more capacity in the USA, and, in fact, on 19 Nov 2010, the NY Times report that "Upscale Investors are Looking Abroad" for a better return on their money. (read full article) There is no reason to cut their taxes so they can send more money out of the country.
In this argument we have one if the architects of economic failure in every important area telling us that what he prescribed in 2000, a prescription that almost killed us, will be the best thing for us now. On the other side, we have Noble laureate in economics telling us that we need more money in the hands consumers to get out of this mess.
" those parts of the private sector not burdened by high levels of debt see little reason to increase spending. Corporations are flush with cash — but why expand when so much of the capacity they already have is sitting idle? Consumers who didn’t overborrow can get loans at low rates — but that incentive to spend is more than outweighed by worries about a weak job market. Nobody in the private sector is willing to fill the hole created by the debt overhang...The irony is that in their determination to punish the undeserving, voters are punishing themselves: by rejecting fiscal stimulus and debt relief, they’re perpetuating high unemployment. They are, in effect, cutting off their own jobs to spite their neighbors.
Noble laureate in economics Paul Krugman (read the whole article)
Who are yo going the believe, the guy that drove us into this ditch? Or the guy that warned him and us not to drive into it? The Hubbard record is marked in red on the chart below, all except the little bit next to Obama's name, a disaster Obama inherited from Bush and Hubbard.
There is one critical area that Hubbard avoids completely, the class warfare that has choked off the complaints of organized labor, and denied working families the voice in politics that their numbers deserve. While the productivity of the average worker has doubled or tripled, the share they got from the increased production in the 30 years prior to 1975, ended when campaigns become so expensive that congress had to spend 100 days a year that they used to spend on the people's business, talking to, and getting money from, lobbyists.
"During the three decades after World War II, for example, incomes in the United States rose rapidly and at about the same rate — almost 3 percent a year — for people at all income levels. America had an economically vibrant middle class. Roads and bridges were well maintained, and impressive new infrastructure was being built. People were optimistic.
"By contrast, during the last three decades the economy has grown much more slowly, and our infrastructure has fallen into grave disrepair. Most troubling, all significant income growth has been concentrated at the top of the scale. The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7 percent.
"Yet many economists are reluctant to confront rising income inequality directly, saying that whether this trend is good or bad requires a value judgment that is best left to philosophers. But that disclaimer rings hollow. Economics, after all, was founded by moral philosophers, and links between the disciplines remain strong. So economists are well positioned to address this question."
-- Robert H. Frank "Income Inequality: Too Big to Ignore"
Hubbard, who was adviser to George W. Bush, was also the deputy assistant Treasury secretary for Tax Policy in the Bush I administration, so he advised two of the three presidents who choose cut taxes and not to cut spending, all of which led to huge deficits (see chart below). In fact, George W. Bush started a $3 trillion war of choice in Iraq and became the first president to start a war and not raise a penny to pay for it; he put the whole thing on a Chinese credit card.
If cutting taxes and increasing spending was the key to job creation, the economy would have exploded under but George W. Bush, but it did not. When Bush came to office 2000, the stock market was 10,000 and when he left in 2008, the stock market was 10,000. If you have a 401k retirement fund, it was a wasted decade. If Hubbard's concepts made any sense at all, George W. Bush and his credit card economy would have created an explosion of jobs, at least more than the eight years that Clinton was in office had created. That didn't happen. Taking Hubbard's advice the stock market was 0 for ten years, the deficit went way up, sub-prime loans went crazy, the banks and AIG had to be bailed out, and employment went into the toilet.
Hubbard argues that more money in the hands of the few would lead to greater investment, true, but the question is where would that investment be? More money in the hands of then middle class consumers in the USA would lead them to "investment" in local businesses and services, whereas greater investment in emerging markets like China, would lead to greater competition for U.S. workers, more job loss, and a larger deficit. This country is currently not short of money for investment, in fact, we have 25% of our existing capacity sitting idle. Until much of that capacity is put back to work, that is, until our consumers have some money to spend and assurance that their jobs are not likely to be eliminated, there is no reason to imagine that investors will be rushing to invest in even more capacity in the USA, and, in fact, on 19 Nov 2010, the NY Times report that "Upscale Investors are Looking Abroad" for a better return on their money. (read full article) There is no reason to cut their taxes so they can send more money out of the country.
In this argument we have one if the architects of economic failure in every important area telling us that what he prescribed in 2000, a prescription that almost killed us, will be the best thing for us now. On the other side, we have Noble laureate in economics telling us that we need more money in the hands consumers to get out of this mess.
" those parts of the private sector not burdened by high levels of debt see little reason to increase spending. Corporations are flush with cash — but why expand when so much of the capacity they already have is sitting idle? Consumers who didn’t overborrow can get loans at low rates — but that incentive to spend is more than outweighed by worries about a weak job market. Nobody in the private sector is willing to fill the hole created by the debt overhang...The irony is that in their determination to punish the undeserving, voters are punishing themselves: by rejecting fiscal stimulus and debt relief, they’re perpetuating high unemployment. They are, in effect, cutting off their own jobs to spite their neighbors.
Noble laureate in economics Paul Krugman (read the whole article)
Who are yo going the believe, the guy that drove us into this ditch? Or the guy that warned him and us not to drive into it? The Hubbard record is marked in red on the chart below, all except the little bit next to Obama's name, a disaster Obama inherited from Bush and Hubbard.
There is one critical area that Hubbard avoids completely, the class warfare that has choked off the complaints of organized labor, and denied working families the voice in politics that their numbers deserve. While the productivity of the average worker has doubled or tripled, the share they got from the increased production in the 30 years prior to 1975, ended when campaigns become so expensive that congress had to spend 100 days a year that they used to spend on the people's business, talking to, and getting money from, lobbyists.
"During the three decades after World War II, for example, incomes in the United States rose rapidly and at about the same rate — almost 3 percent a year — for people at all income levels. America had an economically vibrant middle class. Roads and bridges were well maintained, and impressive new infrastructure was being built. People were optimistic.
"By contrast, during the last three decades the economy has grown much more slowly, and our infrastructure has fallen into grave disrepair. Most troubling, all significant income growth has been concentrated at the top of the scale. The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7 percent.
"Yet many economists are reluctant to confront rising income inequality directly, saying that whether this trend is good or bad requires a value judgment that is best left to philosophers. But that disclaimer rings hollow. Economics, after all, was founded by moral philosophers, and links between the disciplines remain strong. So economists are well positioned to address this question."
-- Robert H. Frank "Income Inequality: Too Big to Ignore"
Saturday, November 13, 2010
The Hated Stimulus Bill
There is a lot to dislike about the $787 billion stimulus bill signed by president Obama in February, 2009, but how much do you really know about it?
Did the bill include a $287 billion tax cut for 95% of U.S. taxpayers?
TRUE, 36% of the total cost of the stimulus bill was a tax cut for individuals ($400 each for those earning under $75,000) and families ($800 if filing jointly and income less than $150,000). FACTBOX - Tax details
You can be sure that it also contained pork, but consider this: until we change our system to one more honest, almost every bill will be larded with pork. After George Bush, in 2008, before Obama was elected, was not able to get the TARP bill passed, the stock market dropped by 700 points, showing the seriousness with which Wall Street viewed the possible collapse of at least part of the banking system. So Bush added $150 billion in pork to the bill to get 25 more Republicans and 25 more Democrats to vote for the bill, and it passed.
That $150 billion added another $150 billion to the deficit, but it could have been a tax cut for 95% of Americans, using the same terms as the stimulus bill, of $209 each for individual and $418 for those filing jointly. The Tea Party members did not howl that day, because their banks were being saved, and if it took another $150 billion in pork, it was worth it.
Consider one other number that might give us more perspective: the top 25 hedge fund managers average an income of $1 billion and and that is mostly taxed at 15% capital gains rates. If they were taxed at 1970 rates, as they should be (they used political contributions to buy lower rates), they would pay another $13.7 billion in taxes. That would mean that those 25 individuals would "only" take home $250 million and the same 95% discussed above could get a tax break of $20 (or $40 for couples). It is not much, so maybe you want to keep giving billionaires $20 or $40, or maybe you think that they were damned lucky to take home $250 million, from a nation where the family net worth (average) for the bottom 40% of citizens is less than $2,000.
As Craig Ferguson might say, "What did we learn today?"
Well, we learned that pork is expensive, we all pay for it, and tax cuts are often just taxes delayed. One man's pork is another person's (often your) tax increase or benefit cut. If we always balance the budget, one man's tax cut likely means that someone else gets laid off. Passing bills to save Wall Street millionaires and billionaires was not too painful Bush borrowed the money (added it to the deficit) as he did for the wars in Afghanistan and Iraq, but now is the time we actually start paying, and those who benefited the most, want those who did not benefit at all, to give up their retirement and health care, to sacrifice much of what they have to get the deficit down.
Did the bill include a $287 billion tax cut for 95% of U.S. taxpayers?
TRUE, 36% of the total cost of the stimulus bill was a tax cut for individuals ($400 each for those earning under $75,000) and families ($800 if filing jointly and income less than $150,000). FACTBOX - Tax details
You can be sure that it also contained pork, but consider this: until we change our system to one more honest, almost every bill will be larded with pork. After George Bush, in 2008, before Obama was elected, was not able to get the TARP bill passed, the stock market dropped by 700 points, showing the seriousness with which Wall Street viewed the possible collapse of at least part of the banking system. So Bush added $150 billion in pork to the bill to get 25 more Republicans and 25 more Democrats to vote for the bill, and it passed.
That $150 billion added another $150 billion to the deficit, but it could have been a tax cut for 95% of Americans, using the same terms as the stimulus bill, of $209 each for individual and $418 for those filing jointly. The Tea Party members did not howl that day, because their banks were being saved, and if it took another $150 billion in pork, it was worth it.
Consider one other number that might give us more perspective: the top 25 hedge fund managers average an income of $1 billion and and that is mostly taxed at 15% capital gains rates. If they were taxed at 1970 rates, as they should be (they used political contributions to buy lower rates), they would pay another $13.7 billion in taxes. That would mean that those 25 individuals would "only" take home $250 million and the same 95% discussed above could get a tax break of $20 (or $40 for couples). It is not much, so maybe you want to keep giving billionaires $20 or $40, or maybe you think that they were damned lucky to take home $250 million, from a nation where the family net worth (average) for the bottom 40% of citizens is less than $2,000.
As Craig Ferguson might say, "What did we learn today?"
Well, we learned that pork is expensive, we all pay for it, and tax cuts are often just taxes delayed. One man's pork is another person's (often your) tax increase or benefit cut. If we always balance the budget, one man's tax cut likely means that someone else gets laid off. Passing bills to save Wall Street millionaires and billionaires was not too painful Bush borrowed the money (added it to the deficit) as he did for the wars in Afghanistan and Iraq, but now is the time we actually start paying, and those who benefited the most, want those who did not benefit at all, to give up their retirement and health care, to sacrifice much of what they have to get the deficit down.
Wednesday, November 10, 2010
The Obama Deficit Panel - Punishs workers
"My misgivings increased as we got a better feel for the views of the commission’s co-chairmen. It soon became clear that Erskine Bowles, the Democratic co-chairman, had a very Republican-sounding small-government agenda. Meanwhile, Alan Simpson, the Republican co-chairman, revealed the kind of honest broker he is by sending an abusive e-mail to the executive director of the National Older Women’s League in which he described Social Security as being “like a milk cow with 310 million tits.” article by Noble Laureate in economics, Paul Krugman
"So you’re going to tell janitors to work until they’re 70 because lawyers are living longer than ever." - Paul Kurgman
Today we got the first report from the Obama created "Deficit Panel". announcing that the "beast is starved" and it proposes carrying out the Republican plan to cut taxes on the wealthy and cut benefits to working families. The tax rates for the bottom 40% of US citizens would go up while their benefits would be cut. Payroll taxes are already about 16% for working people (see note below, that figure is correct), higher than the new middle class rate, and it would apply to income up to $190,00 by 2020, while retirement is pushed back and benefits cut. Everyone but billionaires and millionaires would have less money to spend; the super rich will get most of the benefits of tax dodges rolled into lower rates.
Cutting social security benefits to the upper middle class will orphan the beast, as Bob Dole proved time and again. This is a plan to kill it, not save it. It is like asking the wealthy to support a library where they are unwelcome.
The panel did not address the three main problems this county faces: a corrupt government run by the lobbyists for bankers and the health care industry, massive income inequality that is crushing our economy, and a business friendly, freedom hating Supreme Court stacked with ideologues, including one from Monsanto who apparently committed perjury to get on the court and authored rulings to benefit his wife's industry.The panel promises us small ineffective government unable to address the results of inequality that are driving this nation to banana republic status, unable to respond to the next banking disaster, and unable to regulate those who are still able to gamble with our future. Small bad government that allows class warfare to continue unchecked is no worse than big government. Half the American people voted for good government that provide efficient public services, and the other half wants government to listen to them, but have no ideas that could work in ad democracy (except telling women what to do with their bodies). Nobody voted for small, crap, government.
I expect in the next week or so that some economists like Krugman and Stiglitz will discuss this proposal, but this my take on 11 November 2010. I will update the post with links to real economists when they are available, guys that take a bit more time to look for some good in this effort by former Clinton White House chief of staff Erskine Bowles and former Republican senator Alan K. Simpson. (update: Krugman's first response to panel is included below)
An important point to remember is that a benefit cut is a tax on those who received that benefit, and raising your retirement age reduces your benefits (fewer payments before you die), and that is also a "tax". If your taxes are cut by $400 a year and your benefits cut by $100 per month, the burden on you is greater; you are more taxed.
The proposal is aimed at cutting $3.8 trillion from deficits over the next decade, and as actually enacted, probably half that . Letting the Bush tax cuts expire completely would raise about the same amount of money over the next decade, so if you got a huge tax cut from Bush, you may like this proposal, but nobody else will. Retirement will be raised to 69, and you will lose your deduction for interest related to home ownership. There is much more and none of it fun reading. There will have to be pain, but most Americans would rather see a hedge fund manager that made a billion dollars last year (average pay for the top 25) take home "only" $250 million, before the benefits are cut to people earning less than $150,000. Those billions were not made in a vacuum or on one of the Marshall Islands. They are the work product of 300 million people.
A handful of Republicans will like parts of this, but working families will see it as a complete betrayal of those who have to get up in the dark, and come home in the dark, and mothers that have to leave their children in daycare so they can supplement their family's income . The BBC reported today that sales of watches costing more than $750,000 are up this year, as are the sales of handbags costing more than $25,000. The wealthy are not suffering, and they will not feel your pain under this proposal.
For the record, this is exactly the kind of "death panel" that Frank Wolf has proposed.
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/10/AR2010111004029_pf.html
The plan would squeeze another $100 billion a year out of the tax code through a comprehensive strategy that would eliminate all of the expensive and popular deductions known as tax expenditures. The would include tax breaks for mortgage interest and employer-provided health care and special rates for capital gains and dividends.
...
The six current tax brackets would be replaced by three brackets with rates of 8 percent, 14 percent and 23 percent. The corporate tax rate, currently the highest in the industrial world at 35 percent, would be reduced to 26 percent.
...
Farmers and federal retirees would see reductions in payments. And Social Security, the income support program for retirees, would be subject to major changes, including lower benefits for the wealthiest 50 percent of recipients and a higher retirement age.
...
The retirement age is set to hit 67 under current law; the Erskine-Simpson plan would raise it to 68 in 2050 and to 69 by 2075.
...
In addition to reducing benefits, the plan proposes to ensure Social Security's solvency by raising the payroll taxes that finance the program. While the rate would be unchanged, the amount of income subject to tax would gradually rise from $106,800 this year to about $190,000 in 2020.
Note 1: "Why do you say that payroll taxes about 16% when my pay check says they are half that"?
Because, while only half the payroll taxes are shown on your pay stub, and you are taxed on that amount, you have to earn both that amount and that amount again so that your employer can pay the other half. You pay taxes on (half) the taxes, but would not pay taxes on real estate taxes you pay. Only workers pay taxes on taxes. The only money that your employer has is the money that you and other workers earn. There is no money to pay for your health care or payroll taxes, unless you earn it. The day you don't earn both halves, you will be laid off. When employers say that they pay for health care or your 401k, they really mean that it is not (currently) taxed. You still have to earn every penny of it, employer don't earn money with one employee so they can give it to another, and they don't bring money from home to pass out. They are, in that sense, like the government, they have the money that you earn (or pay in taxes) there is no other money.
Note 2: The editors of the NY Times have written a generally favorable review of the panel's report. Their incomes being likely over $1 million, their views are expected.
http://www.nytimes.com/2010/11/11/opinion/11thu1.html?_r=1&hp
Note 3: Paul Krugman responded to the outrageous views of the deficit panel, link and his views follow.
http://krugman.blogs.nytimes.com/2010/11/10/unserious-people-2/
Paul Krugman
November 10, 2010, 1:43 pm
Unserious People
OK, let’s say goodbye to the deficit commission. If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves large cuts in income taxes. Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies — goodies that fairly obviously, even without having the details, would go largely to the very affluent.
I mean, what’s this about? There is no — zero — evidence that income taxes at current rates are an important drag on growth.
Oh, and they’re talking about raising the retirement age, because people live longer — except that the people who really depend on Social Security, those in the bottom half of the distribution, aren’t living much longer. So you’re going to tell janitors to work until they’re 70 because lawyers are living longer than ever.
Still, I guess this is what it takes to get compromise, if by compromise you mean something the center-right and the hard right can agree on.
Update: It’s here. And it really is that bad. The idea that co-chairs of a commission whose charge is fiscal sustainability should take it upon themselves to (a) declare that federal revenue must not exceed 21 percent of GDP — that’s right, putting a cap on receipts and (b) call for reducing the top rate from 35 to 23 is just awesome.
Note 4: David Stockman, budget director in the first Reagan administration and the architect of Reagan’s supply-side economic policies, says let the tax breaks expire (article).
Stockman has been calling for Congress to take serious and immediate steps to start closing the $1.25 trillion fiscal 2011 budget deficit through a series of unconventional actions, beginning with allowing the Bush tax cuts to expire, as they are scheduled to at the end of the year. One of his more cogent arguments has been that since about half of us don’t pay income taxes anyway (that is to say, many people earn/pay 16% or so payroll taxes, but little income tax. Tje deficit panel does not propose cutting payroll taxes, so many people would see no tax decrease at all, and), letting taxes rise on the other half would be “progressive” (in tax parlance, this means it would hit hardest those with greater means to pay).
"So you’re going to tell janitors to work until they’re 70 because lawyers are living longer than ever." - Paul Kurgman
Today we got the first report from the Obama created "Deficit Panel". announcing that the "beast is starved" and it proposes carrying out the Republican plan to cut taxes on the wealthy and cut benefits to working families. The tax rates for the bottom 40% of US citizens would go up while their benefits would be cut. Payroll taxes are already about 16% for working people (see note below, that figure is correct), higher than the new middle class rate, and it would apply to income up to $190,00 by 2020, while retirement is pushed back and benefits cut. Everyone but billionaires and millionaires would have less money to spend; the super rich will get most of the benefits of tax dodges rolled into lower rates.
Cutting social security benefits to the upper middle class will orphan the beast, as Bob Dole proved time and again. This is a plan to kill it, not save it. It is like asking the wealthy to support a library where they are unwelcome.
The panel did not address the three main problems this county faces: a corrupt government run by the lobbyists for bankers and the health care industry, massive income inequality that is crushing our economy, and a business friendly, freedom hating Supreme Court stacked with ideologues, including one from Monsanto who apparently committed perjury to get on the court and authored rulings to benefit his wife's industry.The panel promises us small ineffective government unable to address the results of inequality that are driving this nation to banana republic status, unable to respond to the next banking disaster, and unable to regulate those who are still able to gamble with our future. Small bad government that allows class warfare to continue unchecked is no worse than big government. Half the American people voted for good government that provide efficient public services, and the other half wants government to listen to them, but have no ideas that could work in ad democracy (except telling women what to do with their bodies). Nobody voted for small, crap, government.
I expect in the next week or so that some economists like Krugman and Stiglitz will discuss this proposal, but this my take on 11 November 2010. I will update the post with links to real economists when they are available, guys that take a bit more time to look for some good in this effort by former Clinton White House chief of staff Erskine Bowles and former Republican senator Alan K. Simpson. (update: Krugman's first response to panel is included below)
An important point to remember is that a benefit cut is a tax on those who received that benefit, and raising your retirement age reduces your benefits (fewer payments before you die), and that is also a "tax". If your taxes are cut by $400 a year and your benefits cut by $100 per month, the burden on you is greater; you are more taxed.
The proposal is aimed at cutting $3.8 trillion from deficits over the next decade, and as actually enacted, probably half that . Letting the Bush tax cuts expire completely would raise about the same amount of money over the next decade, so if you got a huge tax cut from Bush, you may like this proposal, but nobody else will. Retirement will be raised to 69, and you will lose your deduction for interest related to home ownership. There is much more and none of it fun reading. There will have to be pain, but most Americans would rather see a hedge fund manager that made a billion dollars last year (average pay for the top 25) take home "only" $250 million, before the benefits are cut to people earning less than $150,000. Those billions were not made in a vacuum or on one of the Marshall Islands. They are the work product of 300 million people.
A handful of Republicans will like parts of this, but working families will see it as a complete betrayal of those who have to get up in the dark, and come home in the dark, and mothers that have to leave their children in daycare so they can supplement their family's income . The BBC reported today that sales of watches costing more than $750,000 are up this year, as are the sales of handbags costing more than $25,000. The wealthy are not suffering, and they will not feel your pain under this proposal.
For the record, this is exactly the kind of "death panel" that Frank Wolf has proposed.
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/10/AR2010111004029_pf.html
The plan would squeeze another $100 billion a year out of the tax code through a comprehensive strategy that would eliminate all of the expensive and popular deductions known as tax expenditures. The would include tax breaks for mortgage interest and employer-provided health care and special rates for capital gains and dividends.
...
The six current tax brackets would be replaced by three brackets with rates of 8 percent, 14 percent and 23 percent. The corporate tax rate, currently the highest in the industrial world at 35 percent, would be reduced to 26 percent.
...
Farmers and federal retirees would see reductions in payments. And Social Security, the income support program for retirees, would be subject to major changes, including lower benefits for the wealthiest 50 percent of recipients and a higher retirement age.
...
The retirement age is set to hit 67 under current law; the Erskine-Simpson plan would raise it to 68 in 2050 and to 69 by 2075.
...
In addition to reducing benefits, the plan proposes to ensure Social Security's solvency by raising the payroll taxes that finance the program. While the rate would be unchanged, the amount of income subject to tax would gradually rise from $106,800 this year to about $190,000 in 2020.
Note 1: "Why do you say that payroll taxes about 16% when my pay check says they are half that"?
Because, while only half the payroll taxes are shown on your pay stub, and you are taxed on that amount, you have to earn both that amount and that amount again so that your employer can pay the other half. You pay taxes on (half) the taxes, but would not pay taxes on real estate taxes you pay. Only workers pay taxes on taxes. The only money that your employer has is the money that you and other workers earn. There is no money to pay for your health care or payroll taxes, unless you earn it. The day you don't earn both halves, you will be laid off. When employers say that they pay for health care or your 401k, they really mean that it is not (currently) taxed. You still have to earn every penny of it, employer don't earn money with one employee so they can give it to another, and they don't bring money from home to pass out. They are, in that sense, like the government, they have the money that you earn (or pay in taxes) there is no other money.
Note 2: The editors of the NY Times have written a generally favorable review of the panel's report. Their incomes being likely over $1 million, their views are expected.
http://www.nytimes.com/2010/11/11/opinion/11thu1.html?_r=1&hp
Note 3: Paul Krugman responded to the outrageous views of the deficit panel, link and his views follow.
http://krugman.blogs.nytimes.com/2010/11/10/unserious-people-2/
Paul Krugman
November 10, 2010, 1:43 pm
Unserious People
OK, let’s say goodbye to the deficit commission. If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves large cuts in income taxes. Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies — goodies that fairly obviously, even without having the details, would go largely to the very affluent.
I mean, what’s this about? There is no — zero — evidence that income taxes at current rates are an important drag on growth.
Oh, and they’re talking about raising the retirement age, because people live longer — except that the people who really depend on Social Security, those in the bottom half of the distribution, aren’t living much longer. So you’re going to tell janitors to work until they’re 70 because lawyers are living longer than ever.
Still, I guess this is what it takes to get compromise, if by compromise you mean something the center-right and the hard right can agree on.
Update: It’s here. And it really is that bad. The idea that co-chairs of a commission whose charge is fiscal sustainability should take it upon themselves to (a) declare that federal revenue must not exceed 21 percent of GDP — that’s right, putting a cap on receipts and (b) call for reducing the top rate from 35 to 23 is just awesome.
Note 4: David Stockman, budget director in the first Reagan administration and the architect of Reagan’s supply-side economic policies, says let the tax breaks expire (article).
Stockman has been calling for Congress to take serious and immediate steps to start closing the $1.25 trillion fiscal 2011 budget deficit through a series of unconventional actions, beginning with allowing the Bush tax cuts to expire, as they are scheduled to at the end of the year. One of his more cogent arguments has been that since about half of us don’t pay income taxes anyway (that is to say, many people earn/pay 16% or so payroll taxes, but little income tax. Tje deficit panel does not propose cutting payroll taxes, so many people would see no tax decrease at all, and), letting taxes rise on the other half would be “progressive” (in tax parlance, this means it would hit hardest those with greater means to pay).
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