jump to navigation

Time to get a really big washer … November 8, 2011

Posted by WillardWhyte in Economy, Justice, Politics.
Tags: , , ,
add a comment

… and fix this stupid faucet that keeps dribbling out this same corrosive “trickle” of failed, counterproductive policy.

Trickle-down won’t work because those who already have way, way more than they need won’t do it. They’ll take the tax break — and sit on it. Or invest it where growth looks good and steady over the next five years — in companies and enterprises in markets growing rapidly and consistently.

Which isn’t here.

Because the mass of the population is deleveraging out from under the debris left by the Crash of 2008. And real wages are down and have been for a decade and will be for another decade.

Why? Because even though GDP is back to the level last seen before the crash of 2008, and even though corporate profits are headed for a record this year, none of that has been shared with labor — that means the mass of workers who somehow held onto their jobs and threw their shoulders into the wheel to produce the GDP bounceback and profit bounceback.

Just about all of the recovery went to stock buybacks, restored and bolstered dividends, mergers (that cost jobs) and richer executive compensation, immediate and deferred.

None of that recovery largesse trickled down much past the executive washroom. And I’m not talking unions. I’m talking white-collar wimpos who tell themselves are getting somewhere and that their hard work and sacrifice in the last three years will be rewarded. When?

And the people upstairs who made the decisions about how to divide the corporate gains from the recovery are the very same people the GOP expects to rekindle the domestic economy with a rush to — do exactly what? Invest in exactly what? The next Wall Street bubble maybe. If Goldman or Citi or John Paulson can suck them into the next doomed CDO.

It hasn’t happened in the years since the Bush tax cuts. But still the GOP heads in the Super-Committee offer up a “revenue plan” that includes (if you trust this sourced account from Reuters):

—  Limiting the mortgage tax deduction for second homes, and some other upper-income perks, which would bring in about $250 billion over 10 years.

— In return for not only keeping the Bush tax cuts, but taking the whole upper end rate — which would rise to 39.5 percent if the cuts expire — down to 28 percent, which is what the bulk of the rapidly vanishing middle class pays. No price tag on that baby, but it surely swamps the vacation home deduction.

Not only does the math in that “deal” not produce progress toward whacking a deficit, it further enriches the top end in an era where simply every analysis shows the middle is the group that took the relative haymaker in the recession, benefitted the least from the market and economy rebound fueled by the government stimulus that largely caused the deficit to explode,  and which has absolutely no discretionary spending room left to rekindle the economy with any sort of robust DEMAND FOR GOODS AND SERVICES from our underutilized factories and worker pool.

And why, I ask, must I go to Reuters to learn of this proposal? I guess the Americn media was pretty full up today with Joe Paterno, Michael Jackson’s doctor, Lindsey Lohan in Playboy and whatever other gossip passed for news.

Sigh.

Advertisements

Yes, let’s put Goldman back in charge December 4, 2010

Posted by WillardWhyte in Economy, Environment, Justice, Politics, U.S. Budget, Wall Street.
Tags: , , , , , , ,
add a comment

I’ve been listening very very closely to all the reform talk down in the Swamp, emerging only with confusion.

One group – the bright Red one – rails against an end to what always was limited tax relief for the top 1 percent or 2 percent of earners, now casting any act to not extend this relief as a move that would sap the slow 3 percent recovery we are in the midst of. Can’t take that $80-$100 billion a year out of circulation in what they continue to say is a “recession,” even though the economy stopped receding and started proceeding four quarters ago.

They know that. But they lie because it’s convenient for the narrative.

This group, then, does a wonderful spin with full gainer, and demands an end to extended unemployment benefits and an immediate return to 2008 spending levels, reigning in such stimulus-intended measures as broadened Medicaid coverage, boosted university research grants, various individual tax credits designed to spur household spending on energy efficiency upgrades. This, if put into effect, would take at least $100 billion in spending by individuals out of the economy – spending on doctors, medicines, researcher salaries and equipment purchases and all those things all those people scraping by need to buy. You know, rent, milk, bread, gasoline, spaghetti sauce, mostly from small businesses, if that matters (actually, the Wal-Marts are counting on taking that “market share” pretty soon, so it doesn’t long term).

Somehow, the Red team doesn’t think this will in any way slow down the economic expansion, though study after study show without dispute that the poor and unemployed and even the middle class university research assistant have a much higher propensity to spend than does the individual or couple making $250,000 and up. So if you are going to pull $100 billion out of the economy – and either way you are doing that – and your true intention is to not hurt the recovery, you draw from the top, not the bottom, of the take-home ladder, because the subtraction of spending multiplied down the line is less.

(more…)

We need to see a lot more of this November 25, 2010

Posted by WillardWhyte in Justice, Politics.
Tags: , , , ,
add a comment

Tom DeLay. Guilty of felony crimes, punishable by time in prison.

He didn’t rob a bank, assault a neighbor, abuse a child. He saw a law he didn’t like, determined he would find a way to do what it outlawed and — in complete contempt of the rule of law and of We the People who put it in place — used his position of public trust to twist the democratic system to favor himself and his followers. He subverted the system we hold dear.

Oh he did that in a relatively small way. And maybe the money he manipulated unlawfully made no difference in the voting. Maybe his cause and the people fighting for it are angels sent to do just that. Not mine to judge all that.

But he broke the law, intentionally. And that is NOT politics as usual. That is a shard in a scrap heap of immorality, injustice and base corruption of souls that permeates our nation’s capital to this day, deeply encrusts our capital markets and commerce and eats away a little more each day at the greatness of our democratic experiment.

Deficits are a problem. Unemployment and slow growth are a problem. Costly inefficient healthcare is a problem. Unproductive and violent citizens are a problem.

But fixing the moral mess must be Job 1. Because if we do not address the lawlessness — the fraud, the theft, the arrogant abuse of position — nothing lasting and just can be done with anything we tackle no matter how earnest our efforts are. The rot will eat away at those fixes also, in time.

A lot of this involves long and expensive investigations, prosecutions and pursuit of appeals to make the point again and again in realm after realm that there is a “right” and a “wrong” way to live, to earn, to govern. And there are real and somewhat immediate consequences for breaking the law. Without this type of deterrence, justice will submit to power and liberty is at risk.

But a lot of this falls to us, also. We cannot abide people who act in this manner, who scoff at laws and make their own rules. Not when they hold an opposite political view — and most importantly not when they share our view and seek to carry a banner we follow.

No manner how smooth, no matter how glib, no matter how gifted they seem, if their soul is thusly corrupted by arrogance, pride and lust for power, they must be cast aside. For within our ranks — Red, Blue or in that vast sea in between — there are far better hands for the task, far better tunics to pin our hopes upon.

We must just say ‘no’ to the dishonest ones, if we are to fix what needs fixing.

Serious business for the infantile November 20, 2010

Posted by WillardWhyte in Economy, Greed, Politics, U.S. Budget, Wall Street.
Tags: , , , , , ,
add a comment

Exactly when did these two guys — Simpson in particular — become the ultimate in Wise Men?

And from this piece, there seems to be a whole lot of chortling going on over the potential ruination of the U.S. economy if their particular strategy for reducing the deficit — and radically overhauling the entire tax code with little assessment of impact — is not swallowed pretty much whole. Get this:

“I can’t wait for the bloodbath in April,” Simpson said, relishing the prospect of political turmoil. “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” in the form of spending cuts. “And boy, the bloodbath will be extraordinary,” he said.

Extraordinary indeed. It’s all a game to him too — the graying, dottering Fox can’t wait for the Hen House to catch fire.

Shameful.

OK — this is a start, if you reject Coburn November 18, 2010

Posted by WillardWhyte in Musings, Politics.
Tags: , ,
add a comment

Bipartisanship and constructive collaboration often begins with the little things — rather, with the easier things. Ones with a shared objective, like this food safety bill that maybe can move.

And breaking the back of things that sow the seeds of discontent also can start with smaller steps — like flatly rejecting the “Christmas Tree” approach to lawmaking Sen. Tom Coburn (R-Okla.) would employ here. It’s back-door lawmaking and it needs to stop — tacking an amendment onto a bill that looks like a good thing, hoping to either kill it with a “poison pill” or piggyback something through you are not forthright enough to put to a vote on its own merits.

Coburn wants an earmark clause on a food safety bill.

Just say ‘no’ to this sort of crap.  If an amendment is not germane to the matters considered in the main bill, it is trickery designed to confuse the matter, game the system or avoid a clear up-down legislative statement and, hence, out of order.

 

This is fun, but … November 14, 2010

Posted by WillardWhyte in Economy, Politics, U.S. Budget.
Tags: , ,
add a comment

…after going through it and saving the nation from deficits through 2030 with mouse-clicks that took about 15 minutes, I find myself wondering about all the ramifications.

My ratio of spending cuts to tax increases was 61-39, and it did not seem like I was taking food out of the mouthes of babies, leaving infirm seniors by the side of the road with just a bone to gnaw on, or leaving the nation wide open to attack — now or a quarter-century from now.

Earmarks, farm subsidies, a 10% reduction in federal workforce and a 250,000 whack to government contractors, reducing troop levels ion South Asia and cutting non-combat military compensation and capping Medicare growth and reducing SS benefits to high-income folks all seemed like areas that could take trims.

Workforce/contractor reductions of 10% would about equal what has taken place in the private sector, with productivity expected to absorb workload. It surely would provide ample incentive to managers to find wasted effort, if only by having to prioritize the most productive tasks and workers. This is always artificial, so I would allow a manager to be able to save a position if he/she were able to identify permanent/verifiable savings equal to 110% of the full cost of that position  in salary and benefits.

Capping Medicare growth to GDP+1% also seemed reasonable, if very difficult. As medical costs will go up with sheer volume more than that, it requires a heavy hand, and that hand would need to find the waste and fraud in a hurry. A good whistleblower program is needed here.

On the tax side, I returned estate tax to 2009 level, with $3.5 million exemption; cut cap gains to Clinton-era levels; kept Bush tax cuts for all but those above $250,000; jacked payroll taxes back up to cover 90% of income (level at original enactment); converted mortgage interest deduction to credit); and enacted bank tax as a disincentive for risk.

I opted against a carbon tax (prefer market approach with cap-trade); a sales tax; millionaire’s tax; and complete loophole reduction.

I opted against the Bowles-Simpson complete wipe-out of “loopholes” because I am a believer in using the tax code, as well as the checkbook, to attempt to steer investment toward things deemed in the national interest — like energy independence, reinvestment of profits into R&D, individual incentives for education. Markets today are extremely short-term in their vision and the government needs to “help” money look longer.

That said, the tax code needs to be overhauled with a “zero-based budgeting” approach — each clause amounting to a “tax expenditure” must be justified after an exhaustive, neutral cost-benefit audit fully identifying where the crutch applies and why.

With all this said, I’ll say I have no idea whether this little graphic exercise created by the Times is “neutral” or “spun” to identify things a “progressive” would target, and not highlight as an option things a “conservative” might want as an option.

And I’d also say that it all kind of assumes all else could be ignored, which I don’t agree with as an approach.

Still, it is quite thought-provoking and worth the time I think, if for no other reason than to get familiar with what really might be “saved” by the various options on this list.  Things like the estate tax don’t really help close the huge gap all that much and might very well motivate hardship-sales of  enterprises best left in family hands. Perhaps another method would be better — such as a ceding of a non-voting ownership stake to a blind trust, with repurchase options to owners or their designees. Perhaps Treasury could pool the combined stake and sell slices into the open market, giving Uncle Sam the cash and shifting the risk/gain to global investors.

It would be nice, maybe, if the Wall Street Journal or Bloomberg joined with the Times in this venture to extend the choices (and in a manner of thinking also vetting the entire deal for “bias”). And perhaps each option could link to pro-con essays or more detailed studies of the risk/reward for each, allowing folks to better understand the pain/gain each choice involves.

Sort of a joint venture in education and reason.

 

And so the ‘working together’ era begins … November 3, 2010

Posted by WillardWhyte in 2010 Election, Healthcare, Politics.
Tags: , , ,
add a comment

Senate Minority Leader Mitch McConnell will talk with the choir Thursday at the Heritage Foundation. And it seems he has little interest in finding common ground with President Obama.

The only important thing, it seems, is to make him disappear two long years from now. This from the AP:

The Senate’s Republican leader says congressional lawmakers can and should vote to repeal President Barack Obama’s health care law, repeatedly if necessary. If Obama should veto laws repealing the health care overhaul, Senate Minority Leader Mitch McConnell says, the House should cancel funding for its programs. As for the Senate, he says that senators should vote against what he calls the law’s “most egregious provisions.” In remarks prepared for a speech Thursday to the conservative Heritage Foundation, McConnell says it’s all part of the effort to deny Obama a second term in the White House in 2012.Tuesday’s election gave Republicans at least 46 Senate seats next year, making McConnell the leader of a strengthened minority.

I like that. It’s all part of the effort to deny Obama a second term.

Not part of an effort to do what’s right in terms of fixing our wasteful, inefficient and incredibly costly healthcare system.

Just a stepping stone to full power.

Why don’t we ask them to think? September 25, 2010

Posted by WillardWhyte in Economy, Politics, Wall Street.
Tags: , , , , ,
add a comment

In the blizzard of lies, slanders, pledges and pure manure that this year is standing in as political discourse, anyone left still searching for a baseline of hard, unadulterated data from which to form an opinion on critical economic decisions before us is in a tough spot.

The zealots have the field and from their extreme vantages on the Red or Blue fringe they hurl their slogans, their spin-studies and prove their ridiculous contentions with a shard of a subset of numbers yanked free of the critical context that allows them to give some insight into what all is going on out there in a very complex and fluid economy.

I think my favorite actor remains Rep. John Boehner, the House minority leader and Speaker-in-Waiting, who continues to whine about the great uncertainty in the business community that is playing a huge role in holding the economy back. Business leaders won’t commit to hiring, reinvestment or new product launches because they can’t see over the horizon – at least, they can’t build into profit-loss models hard numbers for things like personal income tax rates, capital gains rates, health insurance costs or outlays for such things as pollution control gear, new product labeling or safety testing. They can’t do anything to grow their businesses because – alas poor Yorick – of the policies of President Obama and the Democrats.

Which, of course, is sophistry.

(more…)

Maybe there’s a reason it’s called FOX News September 1, 2010

Posted by WillardWhyte in Economy, Greed, Justice, Politics.
Tags: , , , , , , , , ,
add a comment

I see that former Wachovia Corp. Chief Executive Officer Robert Steel is telling the Financial Crisis Inquiry Commission today that he was told by FDIC Chairman Sheila Bair in late Setptember, 2008 to find a dance partner with something left in its pockets, because the mortgage crap it was holding threatened the U.S. banking system.

This Bloomberg News story tells the early tale. Make particular note of this:

Steel, the former U.S. Treasury Department and Goldman Sachs Group Inc. executive, was brought in to lead Charlotte, North Carolina-based Wachovia in 2008 as the lender struggled to recover from the aftermath of its $24 billion purchase of Golden West Financial Corp. The deal saddled Wachovia with about $120 billion of adjustable-rate mortgages that allowed borrowers to skip some interest payments and add them to the loan balance. The concept assumed home prices would go up. Instead, the idea backfired when prices fell, leaving borrowers with mortgages that exceeded the value of their homes and Wachovia with mounting losses.

That’s $120 billion in garbage interest-only and other high-risk mortgages created by the bankers in California to pump new money into the superheated real estate market driven by flippers and other speculators. BIG NOTE: This was not done by government; it was done by the private sector, at the end stage aided and abetted by Fannie Mae and Freddie Mac, also at the time privately held and run by financial industry veterans.

So please don’t swallow the myth being spun — and heavily marketed by Wall Street — that the bubble slime on all of US was OUR fault because of actions by OUR government. It’s just not true.

Sure, many of US were sucked into the interest-only crap, or steered into liar loans.  And many of US benefited from the housing boom, which put a lot of people to work for a very long time making houses, selling houses and producing all the materials that went into what was a major part of the U.S. economy for two decades.

That’s almost all gone now folks — and no amount of “tax cuts” and “getting government off our backs” is going to bring it back. Something else must be built to take its place, and that’s a whole lot harder and will take a long time. Everyone running for Congress needs to explain in detail how they plan to make that rebuilding happen.

We all should watch what is said before this commission and make sure this story is told fully, extensively — and accurately.

Because what all fell down in September 2008 — and the people who made that happen and reasons for it — is why we still are struggling today — and will for the next five years — to rebuild our economy.

And it wasn’t our fault;  it wasn’t our government’s fault. It was the fault of recklessness, greed and fraud by private industry leadership. And many of those foxes want to be put back in charge of the hen house.

Just what we need more of in D.C. … August 28, 2010

Posted by WillardWhyte in Politics.
Tags: , , , ,
add a comment

… is this this kind of classy approach to winning over the hearts and minds of Americans.

We need men and women of character to tackle some huge problems — none of which lend themselves to solution by any one mind, any one philosophy or any one snap of the fingers.

Anyone approaching the task with the kind of mindset reflected in Mr. Miller’s Tweet, no matter who he directed it toward, should be sent back to his Mama for some remedial work.

Alaska has a lot more to offer and should expect a lot more from those who seek the privilege of representing its good people in our Congress.