Monday, December 31, 2012

Sorry, Folks, We Don't Just Have 'A Spending Problem'


"Yesterday, I pointed out how, in a stubborn attempt to avoid raising taxes on the richest 2% of Americans, the Republicans in Congress have essentially agreed to raise taxes on everyone.

The Republicans have done this by refusing to accept President Obama's attempt at a compromise, which preserves low tax rates for 98% of the country while raising taxes modestly on the top 2%.

Well, you can't assign blame to the formerly pragmatic and responsible Republican party without getting some flak.

So I received some notes explaining that the Republicans were absolutely right to reject Obama's plan because "our problem is not a tax problem—it's a spending problem."

And you know what, Democrats? The writers of those notes were partially correct:

We DO have a spending problem.

If we are ever to get our budget deficit under control, we need to trim long-term spending growth.

But blaming the whole deficit problem on "spending" ignores the other half of the problem: Taxes.

Our federal tax revenue right now is historically low.”

How Dark Money Helped Republicans Hold the House and Hurt Voters


“Analysts and others have identified redistricting as a key to the disparity. Republicans had a years-long strategy of winning state houses in order to control each state’s once-a-decade redistricting process. (Confused about redistricting? Check out our song.)

Republican strategist Karl Rove laid out the approach in a Wall Street Journal column in early 2010 headlined “He who controls redistricting can control Congress.”

The approach paid off. In 2010 state races, Republicans picked up 675 legislative seats, gaining complete control of 12 state legislatures. As a result, the GOP oversaw redrawing of lines for four times as many congressional districts as Democrats.

How did they dominate redistricting? A ProPublica investigation has found that the GOP relied on opaque nonprofits funded by dark money, supposedly nonpartisan campaign outfits, and millions in corporate donations to achieve Republican-friendly maps throughout the country. Two tobacco giants, Altria and Reynolds, each pitched inmore than $1 million to the main Republican redistricting group, as did Rove’s super PAC, American Crossroads; Walmart and the pharmaceutical industry also contributed. Other donors, who gave to the nonprofits Republicans created, may never have to be disclosed.”

Link to Republican State Leadership Committee web site for redistricting:


Sunday, December 30, 2012

Baby, You're a Rich Man


Article from the Wall Street Journal regarding who is rich and what that entails in terms of household income and net worth:

Congress and President Barack Obama are struggling with that question as they wrangle over how to avoid the "fiscal cliff." If they can't reach a decision, tax rates will increase sharply for most Americans—both rich and not—and draconian spending cuts of $110 billion will kick in.

It isn't as easy as you might think to determine who is rich. There are many different yardsticks devised by Uncle Sam, banks, brokerage firms and other institutions. The thresholds—as low as $44,000 for people receiving Social Security benefits—matter because they determine the taxes you owe, the college aid you receive, the investments you have access to and the fees you pay.

Overall, the top 1% of U.S. households have a net worth above $6.8 million or at least $521,000 in income, according to data from the Federal Reserve and the Tax Policy Center in Washington. The cutoffs for the top 5% are $1.9 million in net worth, or $209,000 in income.

Saturday, December 29, 2012

Obama Conspiracy Theories for Conservative Nutjobs


Barack Obama's presidency has been an inspiration to many Americans—especially nutjobs. Ever since the first-black-president-to-be appeared on the national political stage, a cottage industry of conservative conspiracy theorists has churned out bizarro, paranoid, and just plain racist effluvia—some of which has trickled into the political mainstream. Below, we've charted some of the Obama-baiters best (i.e., worst) work. (Scroll down for more detailed descriptions of the conspiracy theories in the diagram.)

Disclaimer: It should go without saying that none of these are true. Follow links at your own risk.

Thursday, December 27, 2012

Georgia’s Hunger Games


“The size of the welfare gap, however, varies widely from state to state. In states like California and Maine, which have focused on getting their poor citizens into jobs programs, about two-thirds of those eligible still receive welfare. On the opposite end of the spectrum is Georgia, which over the past decade has set itself up as the poster child for the ongoing war on welfare. Even as unemployment has soared to 9 percent and 300,000 Georgia families now live below the poverty line—50 percent higher than in 2000, for a poverty rate that now ranks sixth in the nation—the number receiving cash benefits has all but evaporated: Only a little over 19,000 families receiving TANF remain, all but 3,400 of which were cases involving children only. That's less than 7 percent, making Georgia one of the toughest places in the nation to get welfare assistance.”

Who's Afraid of a Falling Dollar?


Good article from Mark Weisbrot – written in 2007:

“Like most bad policy, there's a conflict of interest underlying the resistance to having the dollar move to a more competitive level. Robert Rubin is now Chairman of Citigroup. (Both Rubin and Paulson are former CEO's of Goldman-Sachs). The big bankers and the financial sector generally do not have much interest in promoting growth and high levels of employment in the domestic economy, and certainly not rising wages. For them, inflation is the only real enemy, since it erodes the value of financial assets. (Rising wages are viewed negatively by these people because wage increases are seen as increasing inflationary pressures).

If you read the business press you might have noticed that when unemployment goes up, the bond market generally rallies. That is a reflection of the financial sector's direct interest in lower inflation and lower wage growth even if it hurts the vast majority of the country. A high, even overvalued, dollar helps hold inflation in check by keeping import prices lower. On the flip side, as the dollar adjusts to a more sustainable level, at least some increase in inflation is inevitable as import prices increase.

Some of our big transnational corporations also like a high dollar because it makes everything they buy overseas - including other companies as well as labor - cheaper for them. And of course for those whose first priority is an affordable vacation in Europe - well they are out of luck when the Euro rises, as it has now, to $1.45.

But for the vast majority of the country, a "strong dollar" is more like a "strong influenza virus" - something to be avoided whenever possible.”

There Is No Santa Claus and Bill Clinton Was Not an Economic Savior


“To have a sustainable growth path we have to reverse one of the other central policies of the Clinton years, the over-valued dollar. This policy, which was put in place when Robert Rubin became Treasury Secretary, ensured that we would have large trade deficits. The trade deficits were good news for Wall Street with its obsession over inflation. It was also good news for companies looking to move operations overseas to take advantage of cheap labor.

However, the high dollar was terrible news for the country's workers, who were placed at an enormous competitive disadvantage. It resulted in the loss of more than 4 million manufacturing jobs. It was also bad news for anyone who doesn't think that bubbles are a clever way to drive the economy.

Rubin and his allies control the Democratic Party with their money at the moment. Their financial power will not be easily overcome. However, it is important that people understand that the Rubin-Clinton team is every bit as much about redistributing money from the rest of us to the very rich as the Republicans.

The big difference is that, unlike the Republicans, the Rubin-Clinton crew believes that the rich should have to pay their taxes. That's something, but until there is someone in this debate who isn't pushing policies that redistribute before-tax income upward, the vast majority in this country can only lose.”

Tuesday, December 25, 2012

Blues Cruise


“The whole thing was white, and broken, that much was clear. A week after the presidential election, when the dreams of Republicans were dashed with President Barack Obama’s victory over Mitt Romney, we were snorkeling in the blue waters of the Caribbean. In the distance was a shipwreck. “You could make out the pieces of it,” said Ralph Reed, the right-wing political operator who had bolstered the Evangelical Christian vote for Romney. “It was deep and murky.”

Friday, December 21, 2012

Charting the state of the U.S. economy


EPI’s top charts of 2012 are drawn from our flagship publication, The State of Working America; regularly updated Economic Indicators; weekly Economic Snapshots; and posts on Working Economics, the EPI blog. Taken together, they illustrate that in 2013, policymakers must do more to ensure the U.S. economy works for all Americans.

Thursday, December 20, 2012

The solution to gun violence is clear


“The data in social science are rarely this clear. They strongly suggest that we have so much more gun violence than other countries because we have far more permissive laws than others regarding the sale and possession of guns. With 5 percent of the world’s population, the United States has 50 percent of the guns.

There is clear evidence that tightening laws — even in highly individualistic countries with long traditions of gun ownership — can reduce gun violence. In Australia, after a 1996 ban on all automatic and semiautomatic weapons — a real ban, not like the one we enacted in 1994 with 600-plus exceptions — gun-related homicides dropped 59 percent over the next decade. The rate of suicide by firearm plummeted 65 percent. (Almost 20,000 Americans die each year using guns to commit suicide — a method that is much more successful than other forms of suicide.)”

AARP to Congress and the President: Don’t Cut Social Security


Washington, DC – AARP Executive Vice President Nancy LeaMond today reiterated the Association’s opposition to including a cut to the benefits of current and future Social Security recipients as part of a year-end budget deal via a formula change known as Chained CPI. She offered the following statement:

“Adopting the chained consumer price index for Social Security benefits will take $112 billion out of the pockets of current Social Security beneficiaries in the next 10 years alone, and is neither fair nor warranted.

“Social Security is currently the principal source of income for nearly two-thirds of older American households, and roughly one third of those households depend on Social Security for nearly all of their income. Half of those 65 and older have annual incomes below $18,500.  Every dollar of the average Social Security retirement benefit of about $14,800 is absolutely critical to the typical beneficiary. 

“The Chained CPI is a stealth benefit reduction that will compound over time and cut thousands of dollars in retirement income for current beneficiaries.  A typical 80-year-old woman will lose the equivalent of 3 months worth of food annually. The greatest impact of Chained CPI would fall on the oldest, eventually resulting in a cut of one full month’s benefit annually.  This dramatic benefit cut would push thousands more into poverty and result in increased economic hardship for those trying desperately to keep up with rising prices.”

Wednesday, December 19, 2012

Truthdigger of the Week: Dean Baker


“We all misjudged the risks involved,” former Federal Reserve Chairman Alan Greenspan said in March 2010 of the housing bubble that led to the financial crisis. “Everybody missed it—academia, the Federal Reserve, all regulators.”

It’s not true. A paper published in 2002 by Dean Baker, co-founder of the Washington D.C.-based Center for Economic and Policy Research detected some clues, reporting that the rise in housing prices in the previous seven years exceeded what was expected given other aspects of the economy.

“There is ... no obvious explanation for the increase in home purchase prices relative to rental prices,” Baker wrote in the paper’s conclusion. “In the absence of any other credible theory, the only plausible explanation for the sudden surge in home prices is the existence of a housing bubble. This means that a major factor driving housing sales is the expectation that housing prices will be higher in the future,” meaning that while “this process can sustain rising prices for a period of time, it must eventually come to an end.”

Four years later, almost a year before the crisis hit, Baker published another paper that predicted the collapse of the bubble would drive the American economy into recession.

Link to Dean’s 2006 paper mentioned in the above article:

Australia’s Gun Control Law Caused A Drop In Gun-Related Deaths, And An Even Bigger Drop In Suicides


“On April 28, 1996, a gunman shot and killed 35 people in Port Arthur, Tasmania. In response, Australian Prime Minister John Howard — a close alley of President George W. Bush — oversaw the passage of sweeping new gun control legislation. Semiautomatic and automatic rifles and shotguns were banned, and a mandatory government buyback program was enacted to collect those weapons. The results, rounded up by the Washington Post’s Dylan Matthews and Slate’s Will Oremus, were striking:

    [H]omicides by firearm plunged 59 percent between 1995 and 2006, with no corresponding increase in non-firearm-related homicides. The drop in suicides by gun was even steeper: 65 percent. Studies found a close correlation between the sharp declines and the gun buybacks. Robberies involving a firearm also dropped significantly. Meanwhile, home invasions did not increase, contrary to fears that firearm ownership is needed to deter such crimes. But here’s the most stunning statistic. In the decade before the Port Arthur massacre, there had been 11 mass shootings in the country. There hasn’t been a single one in Australia since.”

Tuesday, December 18, 2012

Sheila Bair’s Bank Shot


“During the crisis, however, Treasury and the Fed were adamant about protecting debt holders, fearing that if they had to absorb losses, the markets would be destabilized and a bad situation would get even worse. “What was it James Carville used to say?” Bair said. “ ‘When I die I want to come back as the bond market.’ ”

“Why did we do the bailouts?” she went on. “It was all about the bondholders,” she said. “They did not want to impose losses on bondholders, and we did. We kept saying: ‘There is no insurance premium on bondholders,’ you know? For the little guy on Main Street who has bank deposits, we charge the banks a premium for that, and it gets passed on to the customer. We don’t have the same thing for bondholders. They’re supposed to take losses.” (Treasury’s response is that spooking the bond markets would have made the crisis much worse and that ultimately taxpayers have made out extremely well as a consequence of the government’s actions during the crisis.) “

Sunday, December 16, 2012

Chart Book: 10 Things You Need to Know About the Capital Gains Tax


“Capital gains tax rates are the lowest since the Great Depression.

The capital gains tax rate on assets that have been held for more than one year is 15 percent for people above the 15 percent income tax bracket.  (People in or below the 15 percent bracket owe no capital gains tax.)  This is far below the top marginal tax rate on ordinary income — currently 35 percent — and is the lowest rate on long-term capital gains since the Great Depression.”

Why You Can Kiss Public Education (and the Middle Class) Goodbye


“All around us, our public institutions are disintegrating, and the most important public institution of all – our public education system – is the next to be ghettoized.

Despite several progressive victories this Election Day, there was one significant defeat in Georgia, as voters approved of Constitutional Amendment 1, which changes Georgia’s Constitution to give Republicans in that state the power to create charter schools as part of Georgia’s public education system. The result will be crucial taxpayer dollars being funneled away from free public schools and directed toward brand new, sometimes for-profit, privately-run charter schools.”

The Fiscal Cliff: Absolutely everything you could possibly need to know, in one FAQ


From the folks at Ezra Klein’s Wonkblog:

“Washington is engaged in an all-consuming debate about how to resolve the “fiscal cliff” — which we like to call, for reasons that will soon be explained, “the austerity crisis.” But what is that and why does it matter? We at Wonkblog put together a FAQ to srt it out. And we’ll keep updating this FAQ as the debate rages on.”

Ideas & Trends: The Bondholders Are Winning; Why America Won't Boom


Good article describing the behavior of the bond market:

"IT'S the economy, stupid." When James Carville coined the slogan, he meant that his client, Bill Clinton, would be well served by thumping for a stronger economy. Mr. Clinton did, and he won. But now, it turns out, there are an awful lot of people out there who favor a weak economy.

Favor a weak economy? Who would do that? Enter that mysterious and slightly sinister entity, The Bond Market, the pre-eminent force in the economy today. More than any other group, the bond market's members determine how many Americans will have jobs, whether the jobholders will earn enough to afford a house or a car, or whether a factory might have to lay off workers.

In sum, the American economy is governed by the bond market -- a loose confederation of wealthy Americans, bankers, financiers, money managers, rich foreigners, executives of life insurance companies, presidents of universities and nonprofit foundations, pensioners and people who once kept their money in passbook savings accounts (or under the bed) and now buy shares in mutual funds. While some would recoil at being called enemies of economic growth, the fact is that the confederation has ruled in recent months that the economy should lose strength, not gain it. The Message: Smaller”

The racist roots of 'right to work' laws


“This week, Republican lawmakers in Michigan -- birthplace of the United Auto Workers and, more broadly, the U.S. labor movement -- shocked the nation by becoming the 24th state to pass "right-to-work" legislation, which allows non-union employees to benefit from union contracts.

While Michigan's momentous decision has received widespread media attention, little has been said about the origins of "right-to-work" laws, which find their roots in extreme pro-segregationist and anti-communist elements in the 1940s South.”

Saturday, December 15, 2012

Buffett Joins Call for 'Strong' Estate Tax


“Warren Buffett isn't limiting his call for higher taxes to a minimum rate for very rich Americans who get a large chunk of their income from investments.

He's also one of several dozen wealthy people who have signed a statement calling for a "strong tax on the largest estates." It's been released by a group called "United For a Fair Economy."

MLK 1961 Speech on ‘Right to Work’


    “In our glorious fight for civil rights, we must guard against being fooled by false slogans, such as ‘right to work.’ It is a law to rob us of our civil rights and job rights. Its purpose is to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone…Wherever these laws have been passed, wages are lower, job opportunities are fewer and there are no civil rights. We do not intend to let them do this to us. We demand this fraud be stopped. Our weapon is our vote.”

Gun Ownership by Country

With the terrible shooting yesterday in Newtown, Connecticut, there is much discussion about gun ownership in the United States. Here is a table showing that the United States ranks #1 of the 178 countries surveyed in average firearms per 100 people. A link to the Brady Campaign to Prevent Gun Violence is included in this post – see below.
Source of above data:

Friday, December 14, 2012

A Giant Statistical Round-Up of the Income Inequality Crisis in 16 Charts


“Now we are engaged in a great tug-of-war over a few points in the top tax rate in Washington. But even if the White House pulls hardest, it won't amount to much of a victory for the long-suffering middle class. The sources of their income stagnation are too deep, too varied, and too long-term for Clinton-era tax rates to cure them.”

Suckers for Superheroes


Great article from Frank Rich:

“We should have known all along that David Petraeus was cheesy. And Lance Armstrong mendacious. And Joe Paterno a coward. And yet.”

Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years


“Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.

At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!

Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.

Ronald Reagan was the first national Republican politician to suggest that he could cut taxes on rich people and businesses, that those tax cuts would cause them to take their surplus money and build factories or import large quantities of cheap stuff from low-labor countries, and that the more stuff there was supplying the economy the faster it would grow. George Herbert Walker Bush – like most Republicans of the time – was horrified. Ronald Reagan was suggesting "Voodoo Economics," said Bush in the primary campaign, and Wanniski's supply-side and Laffer's tax-cut theories would throw the nation into such deep debt that we'd ultimately crash into another Republican Great Depression.

But Wanniski had been doing his homework on how to sell supply-side economics. In 1976, he rolled out to the hard-right insiders in the Republican Party his "Two Santa Clauses" theory, which would enable the Republicans to take power in America for the next thirty years.”

Eleven facts about guns and mass shootings in the United States


From Ezra Klein – posted the day of the horrible school shooting in Connecticut:

“When we first collected much of this data, it was after the Aurora, Colo. shootings, and the air was thick with calls to avoid “politicizing” the tragedy. That is code, essentially, for “don’t talk about reforming our gun control laws.”
Let’s be clear: That is a form of politicization. When political actors construct a political argument that threatens political consequences if other political actors pursue a certain political outcome, that is, almost by definition, a politicization of the issue. It’s just a form of politicization favoring those who prefer the status quo to stricter gun control laws.
Since then, there have been more horrible, high-profile shootings. Jovan Belcher, a linebacker for the Kansas City Chiefs, took his girlfriend’s life and then his own. In Oregon, Jacob Tyler Roberts entered a mall holding a semi-automatic rifle and yelling “I am the shooter.” And, in Connecticut, at least 27 are dead — including 18 children — after a man opened fire at Sandy Hook Elementary School.”

Graph of the day: It’s the health-care prices, stupid


“The National Institute of Health Care Management has a new brief out that explores the factors driving up health-care spending, trying to explain why premiums have grown by 122 percent over the past decade.

The answer, at least in recent years, can be summed up in one word: Prices. The volume of health care that Americans used actually dropped between 2009 and 2010, then grew slightly between 2010 and 2011.”

Thursday, December 13, 2012

Michigan Passes "Right to Work" Containing Verbatim Language from ALEC Model Bill


Amidst massive pro-labor protests, Michigan Gov. Rick Snyder has signed sweeping legislation attacking private and public sector unions, just hours after passing the lame-duck legislature. The operative language in the bills is nearly identical to the American Legislative Exchange Council's "model" Right to Work Act.

Both HB 4003, which affects public sector unions, and HB 4054 / SB 116 affecting private sector unions, undermine collective bargaining by allowing workers to opt-out of paying the costs of union representation. As the Center for Media and Democracy's Executive Director Lisa Graves reported today, the move is calculated political payback attacking unions for supporting Democrats. Wages are lower for both union and non-union workers in Right to Work states, according to the Economic Policy Institute.

The legislation is straight out of the Koch-funded ALEC playbook. Compare the language in HB 4003 and HB 4054/SB116 with the ALEC "model" Right to Work Act.

Sunday, December 9, 2012

A Minimum Tax for the Wealthy


“Suppose that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.”

What’s holding back the economy, in 10 charts


“But there’s still big debate between the world’s top economists and President Obama about whether more should have been done to address the debt overhang. Here’s the story of that overhang – in 10 charts.”

When right-wing blather killed


“Taking a break from 24/7 politics after the election, I finally read John Kelly’s troubling “The Graves Are Walking: The Great Famine and the Saga of the Irish People.” Our problems feel small. Ireland lost one in three people in the late 1840s. At least a million died in the famine and its related illnesses; another two million fled for England, Canada, the United States or other ports of refuge.

But I kept coming back to U.S. politics anyway. Hauntingly, Kelly repeats the phrase that drove British famine relief (or lack of it): they were so determined to end Irish “dependence on government” that they stalled or blocked provision of food, public works projects and other proposals that might have kept more Irish alive and fed. The phrase appears at least seven times, by my count, in the book. “Dependence on government:” Haven’t we heard that somewhere?”

The statisticians at Fox News use classic and novel graphical techniques to lead with data


“Depending on where you land in the political spectrum you may either love or despise Fox News. But regardless of your political affiliation, you have to recognize that their statisticians are well-trained in the art of using graphics to persuade folks of a particular viewpoint. I’m not the first to recognize that the graphics department uses some clever tricks to make certain points. But when flipping through the graphs I thought it was interesting to highlight some of the techniques they use to persuade. Some are clearly classics from the literature, but some are (as far as I can tell) newly developed graphical “persuasion” techniques.”

What I Learned at a Conservative Think Tank: Propaganda Now, Facts Later!


“President Ronald Reagan and his successors have supported an expansion of the Earned Income Tax Credit (EITC) as an alternative to a higher minimum wage.  A “negative income tax” of the kind favored by conservative economist Milton Friedman, the EITC reduces or eliminates federal income tax liability for many of the working poor.  If their incomes are too low, the tax credit is “refundable,” which means that the IRS sends them checks.”

Sen. Sanders: Wall Street CEOs are the 'Faces of Class Warfare'


“Incredulous that Wall Street investment bankers and billionaire CEOs have descended on Washington in the midst of ongoing budget talks to tell Americans that they should "lower their expectations" when it comes to the security of their retirement and future health care, Vermont Senator Bernie Sanders took to the Senate floor Thursday to call out the audacity of corporate-minded millionaires and billionaires, calling them the new "face of class warfare" in the United States.”

The 6 Economic Facts of Life in America That Allow the Rich to Run off with Our Wealth


“Do you ever wonder why it takes the average family 47 years to make as much as a hedge fund honcho makes in one HOUR?

Does it bother you that in 2010, after the crash, the top 25 hedge fund chiefs made as much as 685,000 teachers who educate 13 million children?

Are you worried that cutting government debt means raising your social security eligibility age and cost of living adjustment, so that you have to work longer and receive lower retirement benefits?

Have no fear. The super-rich are spending hundreds of millions of dollars to sell you their economic fabrications. Why so much inequality? They say because the rich have the most important skills and you don't. Why so much unemployment? They say it's because our skimpy unemployment insurance keeps people from looking for work. Why so much government debt? They say it's because you have too many "entitlements." Why the Wall Street crash? They blame poor people for buying homes they couldn't afford.

In short, the super-rich want us to believe that any effort to tax them a bit more or control Wall Street will only kill more jobs and harm our economic well-being. And most of all they don't want us to know the six economics facts of life that explain how the super-rich are running away with our nation's wealth.”

Five Job-Destroying CEOs Trying to “Fix” the Debt by Slashing Corporate Taxes and Cutting Social Security Benefits


“In poll after poll, the American people say they are far more concerned about the jobs crisis than the “debt crisis.” A powerful coalition of CEOs says they have an answer for both problems.

Give us more tax breaks, they say, and we’ll use the money to invest and create jobs. The national economic pie will expand and Uncle Sam will get plenty of the frothy meringue without having to raise tax rates.

That’s the line of the Fix the Debt campaign. Led by more than 90 CEOs, this turbo-charged PR/lobbying machine is blasting the message that such “pro-growth tax reform” should be a pillar of any deficit deal (along with cuts to benefit programs like Social Security and Medicare).

And it might be a good line — if not for some pesky real-world facts. You see the same corporations peddling this line have already been paying next to nothing in taxes. And instead of creating jobs, they’ve been destroying them. Here are five examples of job-cutting, tax-dodging CEOs who are leading Fix the Debt.”

Why is Washington Reducing the deficit instead of Creating Jobs?


This DÄ“mos Explainer explores the tension
between political support for deficit re-
duction versus job creation and economic
security policies. Most available research
indicates a significant difference in priorities be-
tween the majority of Americans and the affluent
that comprise the political donor class, which may
explain the current bi-partisan drive for deficit
reduction at the expense of stimulus policies, in
spite of persistent high unemployment. 

How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much


In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.

Saturday, December 8, 2012

Andy Grove: How America Can Create Jobs


Great article by Andy Grove from 2010:

Until a recent spate of suicides at Foxconn’s giant factory complex in Shenzhen, China, few Americans had heard of the company. But most know the products it makes: computers for Dell and HP, Nokia (NOK) cell phones, Microsoft Xbox 360 consoles, Intel motherboards, and countless other familiar gadgets. Some 250,000 Foxconn employees in southern China produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. That means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods, and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology (STX), and other U.S. tech companies.

You could say, as many do, that shipping jobs overseas is no big deal because the high-value work—and much of the profits—remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work—and masses of unemployed?

Donors Giving $500,000-Plus To Super PACs

Fascinating slideshow:



Rise of the Robots


If this is the wave of the future, it makes nonsense of just about all the conventional wisdom on reducing inequality. Better education won’t do much to reduce inequality if the big rewards simply go to those with the most assets. Creating an “opportunity society”, or whatever it is the likes of Paul Ryan etc. are selling this week, won’t do much if the most important asset you can have in life is, well, lots of assets inherited from your parents. And so on.

Percentage of Domestic Corporate Profits from Financials


Link to the above graph:

Ratio of Top 100 CEO Salaries to Average Worker Annual Earnings


LInk to the above data:

U.S. Non-supervisory Weekly Wages (2012 dollars) and Productivity


Link to the above graph:

Saturday, December 1, 2012

Nate Silver: “The Signal and the Noise”, Authors at Google


From the site:

Nate Silver joins Hal Varian (Google’s Chief Economist) to talk about his book “The Signal and the Noise: Why So Many Predictions Fail-but Some Don’t” and answer Googler questions.