Robert Reich: Mitt Romney IS the Economic Crisis

Wed Jul 04, 2012     by Dartagnan

Robert Reich says the attacks on Romney's tenure at Bain Capital miss the larger point, one which even the White House is not prepared to acknowledge: Mitt Romney is not simply a callous vulture capitalist, he is the living embodiment of the financial catastrophe that brought this country to the edge of ruin.

[T]he real issue here isn’t Bain’s betting record. It’s that Romney’s Bain is part of the same system as Jamie Dimon’s JPMorgan Chase, Jon Corzine’s MF Global and Lloyd Blankfein’s Goldman Sachs—a system that has turned much of the economy into a betting parlor that nearly imploded in 2008, destroying millions of jobs and devastating household incomes. The winners in this system are top Wall Street executives and traders, private-equity managers and hedge-fund moguls, and the losers are most of the rest of us.

The thousands of job losses caused by Bain's "bad bets," while providing rich fodder for the Administration's campaign ads, are really just a microcosm of a self-perpetuating, labyrinthine tax system geared to rewarding the wealthiest with the privilege of betting their fortunes on money they've neither earned nor done anything to deserve, with little or no personal risk. Reich calls it "casino capitalism:"

The biggest players in this system have, like Romney, made their profits placing big bets with other people’s money. If the bets go well, the players make out like bandits. If they go badly, the burden lands on average workers and taxpayers.

The fortunes raked in by financial dealmakers depend on special goodies baked into the tax code such as “carried interest,” which allows Romney and other partners in private-equity firms (as well as in many venture-capital and hedge funds) to treat their incomes as capital gains taxed at a maximum of 15 percent. This is how Romney managed to pay an average of 14 percent on more than $42 million of combined income in 2010 and 2011. But the carried-interest loophole makes no economic sense. Conservatives try to justify the tax code’s generous preference for capital gains as a reward to risk-takers—but Romney and other private-equity partners risk little, if any, of their personal wealth. They mostly bet with other investors’ money, including the pension savings of average working people.

    So when Romney touts his business acumen, he's really bragging about his ability to take advantage of a tax code rigged by himself and others like him to skew the playing field in such a way that in reality poses very little personal risk to himself.  For example, another "loophole" in the Tax Code permitted Romney, as a private equity partner, to place virtually unlimited amounts into a tax-deferred IRA by allowing Romney and his partners to grossly underestimate the "value" of their contributions, because the Code only considers a partnership interest in terms of its "future value."   You and I (and ninety-nine percent of Americans who did not have the good fortune and connections to work for a private equity firm) are limited to deferring a few thousand dollars per year from taxes. Mitt Romney's IRA, according to Reich, approaches 100 million dollars.

The Tax Code also makes interest on debt tax-deductible, fostering a huge incentive to substitute debt for equity, leading to debt-fueled bets made by banks and financial institutions intent on "leveraging America to the hilt," and culminating in the economic catastrophe that the Bush Administration was forced to finally confront in 2008, and that we still find ourselves mired in today.

But for the banks, private equity firms, hedge funds and other financial institutions who brought on the crisis--and for Mitt Romney-- there was no catastrophe.  Two-thirds of all income gains realized between the mid-1980's and 2007 were in the financial sector, showered on the people who made their livelihood playing with other people's money.  People like the folks at Bain Capital, who structured their deals so they would always profit, even though some of the companies they funded ultimately collapsed under the weight of excessive debt.  And when the collapse ultimately occurred, the same people who had profited mightily from leveraging the rest of the country were given a massive bailout. The fact is that the economic crisis directly felt by nearly all "ordinary" Americans was never really felt by the people who caused it. That's the benefit of playing with other people's money.

The Tax code is an opague behemoth, unfathomable to most Americans. When Americans think of tax issues, they think of income tax rates, they think of how their tax money is spent.  They generally don't think in terms of whether interest on debt obligations may be deductible, because your average American doesn't have the wherewithal to get his hands other people's mortgages.  But the folks who are attempting to buy the election for Mitt Romney think of nothing else.  While people like Sheldon Adelson and the Koch Brothers have their pet social issues to amuse themselves, the real issue here is and has always been taxes, or, more correctly, ways to avoid paying taxes.

We’ve entered a new Gilded Age, of which Mitt Romney is the perfect reflection. The original Gilded Age was a time of buoyant rich men with flashy white teeth, raging wealth and a measured disdain for anyone lacking those attributes, which was just about everyone else. Romney looks and acts the part perfectly, offhandedly challenging a GOP primary opponent to a $10,000 bet and referring to his wife’s several Cadillacs. Four years ago he paid $12 million for his fourth home, a 3,000-square-foot villa in La Jolla, California, with vaulted ceilings, five bathrooms, a pool, a Jacuzzi and unobstructed views of the Pacific. Romney has filed plans to tear it down and replace it with a home four times bigger.

We’ve had wealthy presidents before, but they have been traitors to their class—Teddy Roosevelt storming against the “malefactors of great wealth” and busting up the trusts, Franklin Roosevelt railing against the “economic royalists” and raising their taxes, John F. Kennedy appealing to the conscience of the nation to conquer poverty. Romney is the opposite: he wants to do everything he can to make the superwealthy even wealthier and the poor even poorer, and he justifies it all with a thinly veiled social Darwinism.

So in response to the greatest Economic crisis since the Depression, the Republican Party has coalesced behind the crisis' own walking, talking, living embodiment. The mantra that such a person represents the class of "job creators" is just a newly packaged form of Social Darwinism: survival of the "fittest" at the expense of economic "inferiors." This philosophy was embraced and expanded by 19th Century "thinkers" such as William Graham Summer (cited by Reich), and now channeled by the Republican Party in foisting upon us its nominee for the Presidency:

In 1883, Sumner published a highly influential pamphlet entitled "What Social Classes Owe to Each Other", in which he insisted that the social classes owe each other nothing, synthesizing Darwin's findings with free enterprise Capitalism for his justification.[citation needed] According to Sumner, those who feel an obligation to provide assistance to those unequipped or under-equipped to compete for resources, will lead to a country in which the weak and inferior are encouraged to breed more like them, eventually dragging the country down. Sumner also believed that the best equipped to win the struggle for existence was the American businessman, and concluded that taxes and regulations serve as dangers to his survival.

It's hard to find a better description of the Republican Party platform or Mitt Romney's campaign, wouldn't you say?

When Romney simultaneously proposes to cut the taxes of households earning over $1 million by an average of $295,874 a year (according to an analysis of his proposals by the nonpartisan Tax Policy Center) because the rich are, allegedly, “job creators,” he mimics Sumner’s view that “millionaires are a product of natural selection, acting on the whole body of men to pick out those who can meet the requirement of certain work to be done.”

Reich believes too few in the Democratic Party are willing to acknowledge the obvious, either because they are similarly tethered to Wall Street's millions, or because to acknowledge that Romney is in fact the perfect face of the economic crisis would be to acknowledge the overwhelming pervasiveness of the problem.  And to acknowledge the scope of the problem would require them to come up with solutions.  Circling above all of this discussion, of course, is the haunting shadow of Citizen's United.   But for Reich, the "clear and present danger" facing this country is the plutocrat about to accept the Republican nomination for the Presidency--

at the very time in our nation’s history when these views and practices are a clear and present danger to the well-being of the rest of us—just as they were more than a century ago. Romney says he’s a job-creating businessman, but in truth he’s just another financial dealmaker in the age of the financial deal, a fat cat in an era of excessively corpulent felines, a plutocrat in this new epoch of plutocrats. That the GOP has made him its standard-bearer at this point in American history is astonishing.

The face of every foreclosure, of every job loss, of every dream of retirement or a secure future wiped out by what we euphemistically call the "financial crisis" will mount the stage at his Party's convention in Tampa Bay this August.

You can donate to President Obama's re-election campaign here.

Originally posted to Dartagnan on Wed Jul 04, 2012

Technorati Tags: Mitt Romney,Bain Capitol,Barack Obama,2012 Elections,Wall Street,Current Events,Politics,Vulture Capitalist

The Root Of America's Ills? The Corporate Tax Code...

   which was basically created by the Republicans so that their friends in high places could keep more of their money and fuck the American worker at the same time. Democrats ( Bill Clinton ) had a hand in this also.

   Economy In Crisis

To renew America's economy, the U.S. must stop rewarding overseas manufacturing and investment. Currently our tax code is set up to reward American corporations that invest abroad and penalize those corporations that invest at home. When American corporations move overseas they are only taxed on the money that is brought back into the U.S. So American companies simply do not bring money back into the U.S. Instead they keep their overseas profits overseas and that money which could have been funneled into the American economy is instead absorbed by foreign economies. U.S. companies then parlay their earnings into building more factories and infrastructures in the countries they are inhabiting like China and India.

Due to our current tax codes it is more profitable for American companies to manufacture their goods elsewhere and ship them to the United States. The U.S. needs to adapt tax codes that provide tax breaks to those companies that keep American companies on U.S. soil and stop providing tax breaks to companies that move offshore.

  I do not think that Obama, or anyone else, will touch this part of our tax code.

The next administration needs to provide incentives for Americans to keep their companies in the U.S. Our “free trade” policies like the North American Free Trade Agreement and the World Trade Organization make it impossible for the United States to be competitive. NAFTA has led to the U.S. having an explosive trade deficit of $190 billion with Canada and Mexico. The trade deficit equals job loss. If we had a trade surplus it would mean we were producing instead of buying, there would be more people employed to do the production. America has become a service economy, leaving manufacturing to the rest of the world, which is truly the heart of America's distress. Until America restores its manufacturing base, we will have no means to recover.

  A  tax-code goodies for you.

The incentives for US companies to invest abroad are myriad and complex. They can borrow money in the United States, and deduct the interest from their taxes. They can take that money and earn income on it abroad, and perhaps never pay taxes on that income. The expenses of foreign taxes are deductible against US taxes, so in the end, United States taxpayers pay the companies taxes in places like China.

Technorati Tags: United States,Tax Code,Manufacturing,NAFTA,WTO,Economy,Barack Obama

Election Lies About Taxes…

 

….and this time we are going to look at a few of the lies that the Democratic Party has been airing over the past few weeks. We’ll pick on the Republicans later on.

   FactCheck.Org

A New Twist on an Old Tax Attack

Democrats continue misusing tax pledge, but this time against a gubernatorial candidate.

October 8, 2010

 

Summary

Democrats and their allies can’t get enough of the Americans for Tax Reform tax pledge — which, as we’ve reported, they’ve falsely equated in a number of ads with "protecting tax loopholes for companies that ship jobs overseas." Still, Democrats continue to use the bogus charge against Republicans, including in West Virginia’s Senate race and House races in Connecticut, New York, Maryland and the state of Washington, to name a few.

And now, there’s a new twist on the false tax attack in the Massachusetts’ gubernatorial campaign. A labor-financed political committee accuses Republican Charlie Baker of "favoring tax loopholes that encourage corporations to ship our jobs overseas" and signing "a pledge to protect those loopholes." However, the pledge for gubernatorial candidates — a single sentence promising to oppose or veto any new state taxes — is different than the one for federal candidates, so the attack on Baker makes even less sense.

Analysis

We first wrote about the misuse of ATR’s Taxpayer Protection Pledge in April, when the Democrats tried to hold on to Hawaii’s 1st Congressional District in a special election. We  correctly predicted it would be a "prototype of future attack ads."

The Democratic Congressional Campaign Committee’s ad falsely accused Republican candidate Charles Kong Djou of signing a pledge "that protects tax breaks for companies that send jobs overseas." The Democratic spin: If you sign the pledge, then you oppose closing tax loopholes, an act that would raise taxes on U.S.-based corporations with foreign operations.

But, as we said at the time, the pledge a) says nothing about jobs, and b) does not rule out an overhaul of the tax code. So signers could vote to close tax loopholes and lower taxes elsewhere without violating the tax pledge. Here’s what the pledge says:

ATR’s Pledge for House and Senate Candidates

I will:

ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and

TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.

The Democrats’ attack on Djou failed, and he became the first Republican to represent President Obama’s home state in Congress in 20 years. But that didn’t deter the Democrats.

More Faulty Logic

The most curious misuse of the pledge comes from Bay State Future — a recently formed 527 political organization funded by Service Employees International Union, the Massachusetts Teachers Association and the Democratic Governors Association.

Bay State’s ad — which first aired Sept. 28 — targets Charlie Baker, Republican candidate for governor in Massachusetts. It opens by asking the question, "Worried about jobs?" The ad then goes on to describe how Baker favors tax loopholes that encourage companies to ship jobs overseas and "even signed a pledge to protect those loopholes." The group cites the ATR pledge to support its claim.

⬐ Click to expand/collapse the full transcript ⬏

Bay State Future TV Ad: “Goodbye Jobs”

Announcer: Worried about jobs? Well, Charlie Baker favors tax loopholes that encourage corporations to ship our jobs overseas. He even signed a pledge to protect those loopholes. So if Charlie Baker gets his way, ‘goodbye jobs, auf wiedersehen, bon voyage.’

But the pledge for candidates for governor is even more straightforward than the one for congressional candidates:

ATR’s Pledge for Gubernatorial Candidates

"I, (name of candidate), pledge to the taxpayers of the state of (name of state) that I will oppose and veto any and all efforts to increase taxes."

How can a simple no-new-taxes pledge encourage companies to ship jobs overseas?

In a memo defending the ad, Bay State Future cites an aviation bill passed by Congress this summer that included additional aid to states for education and Medicaid. "The bill was paid for partially by closing tax loopholes that encouraged corporations to ship American jobs overseas," the group says in its defense. "Charlie Baker, by signing the Americans for Tax Reform Taxpayer Protection Pledge has aligned himself with their platform and policies, which has [sic] opposed measures that would prevent outsourcing of American jobs overseas."

That logic is baffling to us on a number of levels:

• Baker isn’t running for Congress.
• Baker didn’t sign a pledge that "protects those loopholes," since they are in federal law. He took a pledge to oppose and veto any state taxes.
• Bay State Future is holding Baker responsible for a pledge he didn’t sign.
• The bill cited by Bay State Future makes no mention whatsoever of jobs overseas.

According to Bloomberg News, the bill at issue "clamps down on what Democrats call the abuse of tax credits for multinational corporations intended to ensure income earned abroad isn’t taxed twice, by both the U.S. Treasury and a foreign government." That is, if a company has headquarters in the U.S. and has operations in a foreign country, then the tax code allows that company to separate income earned abroad from income earned on U.S. soil. The bill would suspend these measures and tax overall income, regardless of where it was earned, in order to send additional aid to states. This, of course, results in a net increase in corporate taxes with no dollar-for-dollar reductions anywhere else, which is why ATR opposed the measure.

But forget all that. Even if the bill did close tax loopholes that "encourage corporations to ship our jobs overseas," it is irrelevant to Baker and the tax pledge he signed.

We expected, as we said in April, that we would see this line of attack "against nearly any Republican House candidate, all but a few of whom have signed the anti-tax pledge in question." But we didn’t expect to see it against a candidate for governor.

And, yes, we were right: House and Senate GOP candidates who signed the pledge continue to get hit with this line of attack. Here are some of the latest examples:

Chris Murphy for Congress TV Ad: "Hide," aired Sept. 30-Oct. 2

⬐ Click to expand/collapse the full transcript ⬏

Chris Murphy for Congress TV Ad: “Hide”

Announcer: Some politicians try to hide who they are. Sam Caligiuri says he’s a fiscal conservative, but ran Waterbury into financial ruin as a city leader. To cover the mess he passed a 10 million dollar tax increase, the largest in city history. Now Caligiuri is helping his corporate donors by pledging to protect tax breaks for companies that ship our jobs overseas. Sam Caliguiri, a politician who can’t hide anymore.

DSCC TV Ad: "Opposes," aired Sept. 28

⬐ Click to expand/collapse the full transcript ⬏

DSCC TV Ad: “Opposes”

Announcer: John Raese, he wants to eliminate the minimum wage; failed to pay workers compensation for on-the-job injuries. One thing John Raese does support? A pledge that protected tax breaks for coporations who ship our jobs overseas. It’s true. Protecting tax breaks that reward corporations for sending our jobs overseas. West Virginia working families, we can do better. And we have to. The Democratic Senatorial Campaign Committee is responsible for this message.

Bill Owens for Congress TV Ad: "Moved Here," aired Sept. 28-Oct. 3

⬐ Click to expand/collapse the full transcript ⬏

Bill Owens for Congress TV Ad: “Moved Here”

Announcer: Matt Doheny moved here from New York City to run for Congress. So what don’t we know about Matt Doheny? As a Wall Street investment banker, Matt Doheny restructured Adelphia Communications. Top executives got thirty-five million in bonuses while he laid off five hundred American workers. No wonder Matt Doheny signed a pledge to protect tax breaks for companies that send jobs overseas. That’s the way they do it on Wall Street.

Kratovil for Congress TV Ad: "Deregulation," aired Oct. 1-3

⬐ Click to expand/collapse the full transcript ⬏

Kratovil for Congress TV Ad: “Deregulation”

Announcer: The real Andy Harris. His past attacks have been called deceptive. His new attack, false. Harris voted for deregulation, increasing our electric bills by 72 percent. It’s not suprising, Harris always sides with the big guys. He opposes cracking down on Wall Street. And supports tax breaks for companies that ship jobs overseas. Harris even opposed making big insurance cover cancer screenings. Andy Harris’ extreme ideas will cost us.

Denny Heck for Congress TV Ad: "Pledge," aired Sept. 28

⬐ Click to expand/collapse the full transcript ⬏

Denny Heck for Congress TV Ad: “Pledge”

Announcer: Some ideas are just crazy, like the false, out-of-state attacks against Denny Heck. News media call them misleading. The trusted AARP says the new health care plan would not cut Medicare benefits period. Meanwhile, politician Jaime Herrera pledged to support tax breaks that reward corporations for outsourcing our jobs overseas. Jaime Herra pledging tax breaks for shipping Washington state jobs to China and Mexico? That’s not just crazy, it’s dangerous to our economy.

– by Joshua Goldman and Eugene Kiely

 

Technorati Tags: Bill Owens,Charlie Baker,Chris Murphy,Democratic Senatorial Campaign Committee,Denny Heck,Frank Kratovil,Taxes,Mid Term Elections

Barack Obama: As President Of The United States? Part V: The Economy

  Moving right along, we next look at Senator Obama's plans to deal with the economy, which are pretty nifty if he can pull it off as the President. This post covers Obama's plan at a glance with more details to follow.

“I’m in this race to take those tax breaks away from companies that are moving jobs overseas and put them in the pockets of hard working Americans who deserve it. And I won’t raise the minimum wage every ten years – I will raise it to keep pace so that workers don’t’ fall behind. That is why I am in it. To protect the American
worker. To fight for the American worker.”
-- Barack Obama, Speech in Des Moines, IA, November 10, 2007

BARACK OBAMA’S PLAN TO STRENGTHEN THE ECONOMY
AT A GLANCE
Taxes
Obama will cut income taxes by $1,000 for working families to offset the payroll tax they pay.
Trade
Obama believes that trade with foreign nations should strengthen the American economy and create more American jobs.  He will stand firm against agreements that undermine our economic security.
Technology
Obama will encourage the deployment of the most modern communications infrastructure to reduce the costs of health care, help solve our energy crisis, create new jobs, and fuel our economic growth.
Labor
Obama will strengthen the ability of workers to organize unions.  He will fight for passage of the Employee Free Choice Act.  Obama will ensure that his labor appointees support workers’ rights and will work to ban the permanent replacement of striking workers.  Obama will also increase the minimum wage and index it to inflation to ensure it rises every year.
Home Ownership
Obama will crack down on fraudulent brokers and lenders.  He will also make sure home buyers have honest and complete information about their mortgage options, and he will give a tax credit to all middle-class homeowners.
Bankruptcy Reform
Obama will reform our bankruptcy laws to protect working people, ban executive bonuses for bankrupt companies, and require disclosure of all pension investments.
Credit Cards
Obama will establish a five-star rating system so that every consumer knows the risk involved in every credit card.  He also will establish a Credit Card Bill of Rights to stop credit card companies from exploiting consumers with unfair practices.
Work-Family
Obama will double funding for after-school programs, expand the Family Medical Leave Act, provide low- income families with a refundable tax credit to help with their child-care expenses, and encourage flexible work schedules.

 THE PROBLEM
Wages are Stagnant as Prices Rise
While wages remain flat, the costs of basic necessities are increasing.  The cost of in-state college tuition has grown 35 percent over the past five years.  Health care costs have risen four times faster than wages over the past six years.  And the personal savings rate is now the lowest it’s been since the Great Depression.
Tax Cuts for Wealthy Instead of Middle Class
The Bush tax cuts give those who earn over $1 million dollars a tax cut nearly 160 times greater than that received by middle-income Americans.  At the same time, this administration has refused to tackle health care, education and housing in a manner that benefits the middle class.

BARACK OBAMA’S PLAN
Provide Middle Class Americans Tax Relief
Provide a Tax Cut for Working Families:  Obama will restore fairness to the tax code and provide 150 million workers the tax relief they need.  Obama will create a new “Making Work Pay” tax credit of up to $500 per person, or $1,000 per working family.  The “Making Work Pay” tax credit will completely eliminate income taxes for 10 million Americans.
Simplify Tax Filings for Middle Class Americans:  Obama will dramatically simplify tax filings so that millions of Americans will be able to do their taxes in less than five minutes.  Obama will ensure that the IRS uses the information it already gets from banks and employers to give taxpayers the option of pre-filled tax forms to verify, sign and return.  Experts estimate that the Obama proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees.
Trade
Fight for Fair Trade:  Obama will fight for a trade policy that opens up foreign markets to support good American jobs.  He will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks.  Obama will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and
non-tariff barriers on U.S. exports.
Amend the North American Free Trade Agreement:  Obama believes that NAFTA and its potential were oversold to the American people.  Obama will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.
Improve Transition Assistance:  To help all workers adapt to a rapidly changing economy, Obama would update the existing system of Trade Adjustment Assistance by extending it to service industries, creating flexible education accounts to help workers retrain, and providing retraining assistance for workers in sectors
of the economy vulnerable to dislocation before they lose their jobs.

( to be continued )

Part IV: HEALTHCARE

Part III: ETHICS

Part II: ETHICS

Part 1

Technorati Tags: Barack Obama, NAFTA, Bankruptcy Reform, wages

Where We Are Headed if Republicans Get Their Way with the Tax Code

Originally posted to Tim DeLaney on Mon Jan 16, 2012

The current Republican candidates have all called for the elimination of both capital gains taxes and estate taxes. Presumably, taxes on dividends would also be eliminated, but even if not, there are ways of diverting profits from dividend payments to capital gains--stock buy-backs, for instance.

Below the fold, we will examine the likely consequences of adopting this Republican vision of taxation. Briefly put, it ain't pretty.

Let's imagine you are a CEO or other high-placed executive for a major corporation. Your annual salary--including bonuses--is about $5 million. You are getting more wealthy each year because you don't spend the whole $4 million in after tax dollars. (You have a very good accountant!)

The Republicans gain control of the White House, and of both houses. (Hurray! Let the good times roll!) True to their word, they cut the capital gains tax to zero and eliminate the estate tax. You and your accountants, with an eye toward the 0% tax on capital gains, decide that your salary ought to be structured such that it is classified as capital gains rather than ordinary income.

Somehow, under the magic of creative accounting, and perhaps with an assist from the lawmakers you helped elect with your Super Pac, most of your income is transformed into capital gains. With an effective tax rate near 0%, your net worth skyrockets.

So, what do you do with the money? Even today, the top 1% in wealth own more than half the financial assets in the country. Under the new tax regime, this inexorably increases until--perhaps a few decades from now--they own nearly all the stocks, bonds, and other financial assets. What now?

A natural outlet for all that capital is property. So you start buying up houses on the open market to use as rental properties. The 99% can no longer afford home ownership because you have squeezed the last available dollar out of them. Eventually, most workers are reduced to living from paycheck to paycheck. What do you do when you con no longer get blood from a stone?

You resort to cannibalism, of course. If you are one of the top 0.01%, you start squeezing out the other 0.99%. eventually, and it might take a few generations, all the country's wealth will be concentrated in a few thousand families. (Remember, we abolished estate taxes.) Under the Republican paradigm, the trend is inevitable: the rich will inevitably get richer, and the rest will get poorer.

It may already be too late to reverse the trend. Excess wealth can readily be converted to votes, especially in view of the Citizens United decision. Votes are converted into control of the government, and this in turn is converted to control of the country's wealth. In this circular paradigm, wealth begets wealth. When wealth and politics combine, the non-wealthy are the losers.

For the United States--and all its citizens--to prosper, we need to attain political equilibrium. The politics of the Democratic Party naturally tend towards equilibrium; the politics of the Republicans naturally tend towards runaway wealth concentration.

I don't by any stretch mean to suggest that everything proposed by Democrats is naturally and necessarily optimum policy. We can, and have, made mistakes. But when Democrats make mistakes, those mistakes tend to be self-correcting. When Republicans make mistakes, the results are generally catastrophic.

What does this have to do with the current campaign? First priority, in my opinion, is to overturn the Citizens United decision by means of a constitutional amendment. Demand from every congressional candidate--Democrat or Republican--a firm commitment to the proposed amendment. The alternative is to allow corporations to buy the government. In reality, this amounts to allowing the Boards of directors and the CEO's to buy the government. It is merely a convenient fiction to believe that the shareholders are in control.

There are other reforms needed. In future diaries, perhaps I will try to advocate for some of them.

Also republished by J Town, Dream Menders, and Community Spotlight.

Technorati Tags: Republicans,Taxes,Tax Code,Citizens United,Class Warfare,Current Events,An American Gothic,Politics,The 1%

Challenging the Republican's Five Myths on Inequality

Published on Monday, January 23, 2012 by On the Commons

The Republican position on inequality rests on five statements, all false.        By David Morris

Recent comments by Mitt Romney, the probable Republican nominee for President all but guarantee the inequality issue will remain front and center this election year.GOP candidate Mitt Romney, who thinks its okay to talk about wealth inequality and wage disparity "in quiet rooms" does not think it's appropriate for presidential campaigns.

When asked whether people who question the current distribution of wealth and power are motivated by “jealousy or fairness” Romney insisted, “I think it’s about envy. I think it’s about class warfare.” And in this election year he advised that if we do discuss inequality we do so “in quiet rooms” not in public debates.

A public debate, of course, is inevitable. And welcome. To help that debate along I’ll address the five major statements that comprise the Republican argument on inequality.

1. Income is Not All That Unequal

Actually it is. Since 1980 the top 1 percent has increased its share of the national income by an astounding $1.1 trillion. Today 300,000 very rich Americans enjoy almost as much income as 150 million.

Since 1980, the income of the bottom 90 percent of Americans has increased a meager $303 or 1 percent. The top 1 percent’s income has more than doubled, increasing by about $500,000. And the really, really rich, the top 10th of 1 percent, made out, dare I say, like bandits, quadrupling their income to $22 million.

Meanwhile a full-time worker’s wage was 11 percent lower in 2004 than in 1973, adjusting for inflation even though their productivity increased by 78 percent. Productivity gains swelled corporate profits, which reached an all time high in 2010. And that in turn fueled an unprecedented inequality within the workplace itself. In 2010, according to the Institute for Policy Studies, the average CEO in large companies earned 325 times more than the average worker.

2. Inequality doesn’t matter because in America ambition and hard work can make a pauper a millionaire.

This is folklore. A worker’s initial position in the income distribution is highly predictive of how much he or she earns later in the career. And as the Brookings Institution reports “there is growing evidence of less intergenerational economic mobility in the United States than in many other rich industrialized countries.”

The bitter fact is that it is harder for a poor person in America to become rich than in virtually any other industrialized country.

3. Income inequality is not a result of tax policy.

Nonsense. A painstaking analysis by economists Thomas Piketty, Emmanuel Saez and Stefanie Stantcheva found “a strong correlation between the reductions in top tax rates and the increases in top 1% pre-tax income shares from 1975–79 to 2004–08”. For example, the U.S. slashed the top income tax rate by 35 percent and witnessed a large ten percent increase in its top 1% pre-tax income share. “By contrast, France or Germany saw very little change in their top tax rates and their top 1% income shares during the same period.”

4. Taxing the rich will slow economic growth

An examination of 18 OECD countries found “little empirical support for the claim that reducing the progressivity of the tax code has spurred economic growth, business formation or job growth”.

Indeed, Piketty, Saez and Stantcheva’s rigorous analysis came to the opposite conclusion. Our economy may be growing more slowly because we are taxing the rich too little, not too much. Economists Peter Diamond and Saez estimated the optimal top tax rate, that is the tax rate that would maximize revenue without slowing economic growth, could be as high as 83 percent.

Redistributing income stimulates economies in part because when 1% make more they save whereas when the 99% make more they spend. As a result, according to Mark Zandi, chief economist for Moody’s, a dollar in tax cuts on capital gains adds .38 cents of economic growth while a dollar in unemployment benefits gives the economy a boost of $1.63 and a dollar of food stamps adds $1.73.

5. Taxing the rich would not raise much money

Of course it would. If only the richest 400 families, whose average income in 2008 was an astounding $270 million actually paid the statutory rate of 39 percent (revived as of next January 1st) an additional $500 billion would be raised over 10 years, putting a substantial dent in the projected deficit.

In 2010 hedge fund manager John Paulson made $5 billion. That year, according to Pulitzer Prize winner David Cay Johnston, Paulson paid no income taxes. Am I envious Mr. Romney? You bet I am. But I’m also angry at the stark injustice of it all. And terrified of the power such wealth can wield in a country that allows billionaires to spend unlimited sums influencing legislation and elections.

A recent survey by the Pew Research Center found that two-thirds of Americans now believe the conflict between rich and poor is our greatest source of tension. I agree. It is a conflict that deserves to be aired fully and in public.

            This work is licensed under a Creative Commons License

David Morris is Vice President and director of the New Rules Project at the Institute for Local Self-Reliance, which is based in Minneapolis and Washington, D.C. focusing on local economic and social development

Technorati Tags: Mitt Romney,Republican Party,Income Inequality,Pew Research Center,1%ers,2012 Elections,Current Events,An American Gothic,The Economy

" Spreading The Wealth " Is Socialist? Try This Then

   We already know the Republican take ( spin ) on this issue. Obama wants to take our hard-earned dollars and give them to the poor and lazy. Yeah right.

   What the Republicans seem to forget is that one of their own once wanted to spread the wealth also.

   CommonDreams

Published on Tuesday, November 4, 2008 by the Progressive Media Project

Ike Wanted to Spread Wealth, Too

The wealthy of the Eisenhower years paid a hefty share of their income in taxes.

by Chuck Collins and Sam Pizzigati

Nearly 50 years ago, a famous American gave a speech that advocated spreading the wealth.

In some countries, this notable stated, “a few families are fabulously wealthy, contribute far less than they should in taxes, and are indifferent to the poverty of the great masses of the people.” “A country in this situation,” he went on, “is fraught with continual instability.”

Just who made this spread-the-wealth declaration against the dangers societies invite when they let wealth concentrate? The then-president of the United States, Dwight D. Eisenhower.

Ike’s words back in 1960 created no controversy. Americans overwhelmingly shared his spread-the-wealth convictions. Societies that discourage vast accumulations of private wealth, they believed, simply work better.

The U.S. tax code, back then, reflected this consensus. Income more than $400,000 a year — that’s a bit more than $3 million today, after adjusting for inflation — faced a 91 percent tax rate.

The rich of Ike’s day, of course, exploited tax loopholes, just like today’s rich. But even after exploiting loopholes, the wealthy of the Eisenhower years still paid a hefty share of their income in taxes.

In 1955, for instance, America’s 400 highest-income taxpayers averaged about $12 million in income, in today’s dollars. They paid, after loopholes, 51.2 percent of that in tax.

Let’s put these numbers in contemporary perspective. In 2005, our 400 richest taxpayers averaged $214 million and paid federal taxes on that princely sum, after exploiting loopholes, at a mere 18.5 percent rate.

In other words, today’s rich are taking home much more in income than Ike’s rich and paying taxes at a much lower rate.

But here’s the amazing part. Our Republican presidential candidate, Sen. John McCain, sees nothing wrong. Any move to raise taxes on the rich, he tells us, would amount to “redistributing money instead of spreading opportunity.” Eisenhower, a Republican himself, would be aghast. Ike would see in our current financial meltdown proof positive that wealth, if left to concentrate, will bring on an “instability” that can endanger an entire nation.

Ike, were he around today, might even chide the target of McCain’s anti-redistributionist fury, Sen. Barack Obama, for taking too timid a tax-the-rich stance. Obama wants to raise the tax rate on America’s highest income bracket from 35 to 39.6 percent.

In the generation before Ronald Reagan’s 1980 election, Ike might point out, America’s top tax rate on the rich never dropped below 70 percent. The rich grumbled, but they survived.

Average Americans, in the meantime, didn’t just survive those tax-the-rich years. They prospered. In the quarter-century right after World War II, America’s typical family income more than doubled, and that’s after taking inflation into account.

Over the last quarter-century, by contrast, average Americans have progressed nowhere fast. Wages today, after inflation, are actually running less than wages in the early 1970s.

What’s the big difference between the years right after World War II and the last quarter-century? In the first era, we encouraged the spreading of wealth. In the second, we’ve let wealth concentrate.

Ike wouldn’t be happy. We shouldn’t be either.

Distributed by the Progressive Media Project.

Chuck Collins directs the Program on Inequality and the Common Good at the Washington-based Institute for Policy Studies. Sam Pizzigati, an institute associate fellow, edits Too Much, an online weekly on excess and inequality.

Technorati Tags: Eisenhower,Socialist,Barack Obama,John McCain,Robald Reagan,Taxes

Mitt Romney Says 'Big Business Is Doing Fine' Thanks To 'Offshore Tax Havens'

The Jed Report on Fri Aug 24, 2012

This guy just can't make it through a day without shoving his foot right in his mouth, can he?

"Big business is doing fine in many places," Romney said during a campaign fundraiser Thursday. "They get the loans they need, they can deal with all the regulation. They know how to find ways to get through the tax code, save money by putting various things in the places where there are low tax havens around the world for their businesses."

I know "big business is doing fine" sounds like "the private sector is doing fine," but it's not exactly the same thing—though Mitt Romney would probably justify removing the "big" from his quote, because who cares about what words actually mean. Still, I'll read the quote like a normal person instead of a Romney hack and cut him some slack on hypocrisy there. But here's the thing: I honestly don't know if he's praising or condemning offshore tax havens.

I mean, with a normal politician you'd assume Romney was condemning them. And you'd assume he wasn't speaking highly of big business. But Mitt is a guy who says that anyone who dares criticize business hates America, and that anything other than unadulterated love for free enterprise is akin* to Stalinism—so he couldn't be criticizing big business. And given that he says offshore tax havens are part of the reason that big business is doing fine, you have to assume that he's in favor of them, right?

And no, I'm not being entirely serious here. After all, it's really hard to take anything Mitt Romney says very seriously. That being said, have you heard him say anything specific about getting rid of any of those tax havens? No? Neither have I. And we all know that he's taken extensive advantage of them at Bain and in his personal life. So as weird as it would be, maybe he really was praising offshore tax havens. I mean, job creators love them, right? And Mitt Romney is nothing if not a job creator.

*I'll bet you thought I'd be able get through this post without mentioning Mitt's favorite GOP senate nominee. Nope. On message, baby!

Technorati Tags: Mitt Romney,Taxes,2012 Elections,Current Events,Paul Ryan

Republican Herman Cain: Godfather of Bulls*^t

   As if we have come to expect anything less from those Republican candidates running for the GOP nomination.

   Herman Cain is another one of those GOP hypocrites claiming that he’s for the small business owner and for the normal American. Cutting taxes for the wealthy is his ultimate goal, make no mistake about it.

   As it turns out, Mr. Clean ain’t so clean after all. He is close friends with groups who would like to do away with workers rights and fair wages. Can you say the Koch brothers? Americans for Prosperity? ALEC? He is cahoots with all of the right-wing masters.

                        Koch raising Cain

By jamess     Sun Oct 16, 2011          Original

The News-feeds are all a twitter ... someone has been doing some digging ...

Long Ties to Koch Brothers Key to Cain's Campaign
by Ryan J. Foley, Associated Press -- IOWA CITY, Iowa October 16, 2011 (AP)

Republican presidential hopeful Herman Cain has cast himself as the outsider, the pizza magnate with real-world experience who will bring fresh ideas to the nation's capital. But Cain's economic ideas, support and organization have close ties to two billionaire brothers who bankroll right-leaning causes through their group Americans for Prosperity.

Cain's campaign manager and a number of aides have worked for Americans for Prosperity, or AFP, the advocacy group founded with support from billionaire brothers Charles and David Koch, which lobbies for lower taxes and less government regulation and spending. Cain credits a businessman who served on an AFP advisory board with helping devise his "9-9-9" plan to rewrite the nation's tax code. And his years of speaking at AFP events have given the businessman and radio host a network of loyal grassroots fans.
[...]

Through his AFP work he met Mark Block, a longtime Wisconsin Republican operative hired to lead that state's AFP chapter in 2005 as he rebounded from an earlier campaign scandal that derailed his career.

Block and Cain sometimes traveled together as they built up AFP: Cain was the charismatic speaker preaching the ills of big government; Block was the operative helping with nuts and bolts.
[...]

[Mark] Block is now Cain's campaign manager.

It's nice to have friends in high places, right Herb?

Herman Cain and the Koch Brothers - political bedmates?
by Nancy Houser, digitaljournal -- Oct 11, 2011

Herman Cain's new political allies

Nobody speaks more loudly in support of the loyalty of the Koch brothers toward America than the 2012 Republican presidential candidate Herman Cain, an Atlanta radio host and past chairman and CEO of Godfather's Pizza, who has topped Republican polls in Virginia and South Carolina while winning the Florida GOP straw poll.
[...]

And obviously, candidate Cain supports and trusts the Koch brothers. But why do the wealthy and powerful Koch brothers want Herman Cain? Watch the video:

Herman Cain calls the Koch Brothers "True Patroits"
http://www.youtube.com/...

Herman Cain:

I think David Koch is a Patriot. Because David Koch cares about the future of this Country. His brother Charles Koch is also a Patriot. They care about the future of this Country.

On MTP this morning, Cain gives a "shout out" to Clarence Thomas (another Koch alumni);  and in the above clip, we also find out Cain has been a longtime paid speaker at AFP events -- including speaking out against the Science of Climate Change.  Anything for a buck, right Herb?

intro link

And Cain has credited Rich Lowrie, a Cleveland businessman who served on AFP's board of advisors from 2005 to 2008, with being a key economic adviser and with helping to develop his plan to cut the corporate tax rate to 9 percent, impose a national sales tax of 9 percent and set a flat income tax rate of 9 percent.

Rich Who? No wonder mum was the 9-9-9 word, regarding the geniuses behind this regressive tax plan.  Touting a Koch funded-plan could hurt Cain's astro-turf cred.

Debate shout-out brings national attention to Cleveland's Rich Lowrie, economic adviser to Republican presidential hopeful Herman Cain
by Henry J. Gomez, The Plain Dealer, cleveland.com  October 12, 2011

CLEVELAND, Ohio -- Overnight, Cleveland-area moneyman Richard Lowrie became America's most famous financial planner.

[...Cain:]
"One of my experts that helped me to develop this is a gentleman by the name of Rich Lowrie out of Cleveland, Ohio," Cain said in response to a question about his economic advisers. "He is an economist, and he has worked in the business of wealth creation most of his career."

So who is Rich Lowrie? The Gates Mills resident has a bachelor's degree in accountancy from Cleveland's Case Western Reserve University. He is a wealth-management consultant and a managing director at a Wells Fargo branch in Pepper Pike. He is a licensed stockbroker.
[...]

Even in Cleveland, Lowrie's name rang few bells among industry insiders, one of whom thought Cain was name-checking Rich Lowry, editor of the conservative National Review.

Been surprised by Cain's meteoric rise in the polls in recent weeks?

Don't be.  Given enough money, you can buy almost anything

-- maybe even a very regressive Tax Plan;  maybe even the U.S. Presidency ???

If all else fails, you're kind of set for life, working for Americans for Prosperity, isn't that right Herb? ... just ask Sarah-Lee.

Originally posted to Digging up those Facts ... for over 4 years. on Sun Oct 16, 2011

Also republished by Earthship Koch.

Technorati Tags: Herman Cain,Koch Brothers,ALEC,Americans for Prosperity,Sara-Lee,Republicans,Right Wing,Current Events,An American Gothic

Mitt Romney’s Tax Returns

By  Georgia Logothetis   for Daily Kos

Tue Jan 24, 2012

First, the facts from the Washington Post:

Mitt Romney offered a partial snapshot of his vast personal fortune late Monday, disclosing income of $21.7 million in 2010 and $20.9 million last year — virtually all of it profits, dividends or interest from investments.

None came from wages, the primary source of income for most Americans. Instead, Romney and his wife, Ann, collected millions in capital gains from a profusion of investments, as well as stock dividends and interest payments.

Yes, you read that correctly. Mitt Romney had zero wage income. Zero.

More from the NYT:

Mr. Romney said last week that his effective rate was “about 15 percent,” a figure lower than that of many affluent Americans. But his returns suggested that he paid an effective tax rate of slightly below that of nearly 14 percent. [...]

Referring to the fact that nearly all of his income is taxed as capital gains at a 15 percent rate rather than as earned income at rates of up to 35 percent, Mr. Romney questioned a proposal by Newt Gingrich, the former House speaker, to reduce capital gains taxes to zero.

“Under that plan, I’d have paid no taxes in the last two years,” Mr. Romney said.

Yes, you read that correctly too. Mitt Romney is actually highlighting the fact that all of his wealth comes from capital gains instead of wage income.

Meanwhile, the New York Times on Gingrich's claim that he's an "outsider":

There is lot more than that to be learned from Mr. Gingrich’s documents, starting with the mockery they make of his claim to be an insurgent Washington outsider, the supposed anti-establishment candidate.

After he was drummed out of the House speaker’s office in 1998, Mr. Gingrich set about creating a lucrative living, by trading on his political connections. In 2010, he reported a total income of $3.16 million (including a tidy $76,200 Congressional pension).

Most of Mr. Gingrich’s income has come from helping corporate clients gain access and solicitous treatment from Washington’s power elite.

Frank Bruni:

In Monday night’s debate, Gingrich characterized the end of his Congressional career after the 1998 midterms as wholly volitional, making his exit sound like a self-sacrificing blaze of glory rather than the acrimonious firestorm it was.

With Gingrich, the distance between reality and rhetoric isn’t shrinking but growing, and the incongruities mount. He has lately fallen in love with his rants against “the elites,” and casts himself as their most determined foe, but I can’t for the life of me figure out a definition of elite that doesn’t include him.

Amie Parnes previews the president's State of the Union address:

President Obama won’t be mentioning Mitt Romney by name on Tuesday night. But the subtext of his State of the Union address will be all about him.

Just hours after Romney is expected to disclose his much-anticipated tax returns, Obama will attempt — in a read-between-the-lines way — to portray Romney as an über-wealthy businessman who is anything but a champion for the middle class. [...]

“Every time he says ‘wealthy few,’ it almost implies ‘investor class’ and Mitt Romney,” said Tobe Berkovitz, a professor of communications at Boston University who specializes in political communications and advertising, adding that it’s an “easy” association. One way Obama will implicitly highlight Romney in Tuesday’s speech will be in renewing his call for a tax code rewrite to codify what he calls the “Buffett Rule,” named after billionaire investor Warren Buffett, to ensure wealthier people pay a higher rate than do the middle class and poor.

And then, we have this news nugget from Aaron Blake:

New Jersey Gov. Chris Christie (R) said Sunday that he would consider being Mitt Romney’s vice presidential running mate if Romney asked him, but said he remained skeptical that he would ever be on the ticket.

Christie, who previously denied that he was ready to be president but then briefly considered entreaties to run, also appears to have softened his resistance to the idea of being vice president.

Technorati Tags: Mitt Romney,Income Taxes,Taxes,2012 Elections,Chris Christie,Current Events,An American Gothic,Newt Gingrich

Class Warfare: Up The Stakes

It has been my thought that this country has been involved in class warfare for a very long time. It seems that I am not the only one who thinks so, and maybe the war should be fought in a different manner because the working class are getting hammered by the well off.

From Dailykos Daily KosIs It Time For Class Warfare?
by Something the Dog Said
Wed Aug 25, 2010
Those who read my posts (and there are a lot more of you than I ever thought there would be) know that I am not really a fan of divisive politics. This comes from the teachings of my Mom, who spent her political career reaching out to Republicans to get things done in Washtenaw County. Her argument was always that while you might hammer your opponents in today’s fight, you’re probably going to need them to get tomorrows work done. It is generally good advice, but it is predicated on the premise that your opponents want to get things done and really are working for the best solution for everyone.Sadly Mom’s good advice can not be used right now. There has been too big a shift in power in the nation for us to look at the Republicans as any kind of honest partner in anything. The efforts of the folks like the ultra-wealthy Koch brothers have shifted our discourse so far to the right that things which would have had politicians thinking about spending more time with their families in the past can be said with a straight face and taken as serious.At a time when the wealth of this nation is once again concentrated in the hands of a few and the rest of the nation suffers because of it, the idea of class warfare has to be revived and considered. I hate the term "class warfare" mostly because I don’t like the meme of war when it comes to politics, any kind of nod to the acceptance of political violence, even rhetorically is dangerous in my mind. Still, in this case it is accurate.The Koch brothers, Rupert Murdock, the Coors Family, and other old-ish money Right Wing folks have used the power of money to push an agenda that helps them and their fortunes grow but does nothing for the people of this nation over all. They are the source of the deregulatory push that has us recalling more than a quarter million pounds of lunch meat and a quarter billion eggs. They are the folks who helped muddy the water about cigarettes and climate change. All so they would not have to spend some of their incredibly massive profits to make their products and the production of their products less harmful.This kind of power can only be overcome by the power of the people. The thing about the power of the people is it only works when they are united. The old slogan does not read "The people, fractious, will never be defeated", hell, that doesn’t even rhyme.One problem we face is the way the tax code is written. The idea that we are going to increase taxes on folks making more than 250,000 a year just feels too close to home. Almost no one you know makes that kind of money, yet, it is close enough that we many of us can imagine it. In my work life I have made 100,000 one year. I did it selling cars, not working in an office (and yeah there is a giant gaping whole in my soul from it). It was a hell of a lot of money and I can imagine what it would be like to make twice that.Even folks who make somewhere between $50,000 and $75,0000 a year feel like they could get to this level. Even though they are not likely to, even though they don’t know anyone who makes that kind of money, they think about it and feel like it is attainable.This makes it hard for us to talk about making the ultra-wealthy pay their fair share. If you think that you are going to be in that group, well you don’t want to do something that would hurt you later. What is needed is to start talking about the top brackets being in the 1 million dollar range and above. Even the most optimistic middle class worker does not see a day when he will be making a million dollars a year from his or her job.Looking at it this way puts the fight in the proper perspective. The other thing we need to start doing is talking about the earnings of the ultra-wealthy in ways that everyone can grasp. A million dollars a year is a lot of money, but really it is hard for many people to intellectualize a million. Take a moment and try to imagine a million pennies or a million cars or even a million slices of bread. Very few things that we deal with in our lives come in million packs so we don’t have a good grasp of what that number means.However, everyone has had a regular pay check, so if we say that we want to raise the taxes of those who make $38,461 every two weeks, 79,000 a month (which is the same as 1 million a year) then it comes into focus just how far away most of us are from being hit by these taxes. It is hard to defend a tax break for people who make more in month than most households make in an entire year.This is the type of number we have to start using and talking about if we want to bring people together. Folks like Joe Wurzelbacher the famous "Joe the Plumber" like to think that letting the tax cuts for the top 2% of earners expire is going to impact them. To get them to wake up we need to throw a little cold water on their day dreams of avarice.The other component of the new class warfare is getting the unemployed to band together. The job situation in this nation makes each person looking for work see all the others as competition. If there are five people for every job opening, then that is four people you have to beat out for that job. This robs us of the cohesion that the unemployed should have. As long as we are fighting each other, we won’t be fighting the very folks who will off shore 10,000 jobs for a .5% increase in revenue.There are 14 million unemployed and under-employed adult citizens in this nation. If they all turned out and voted for one party it would be a wave that would dwarf 2006. These votes can be had, if the Democrats will focus on two things, first that the Radical Republicans will not act to create jobs. They want the "market" to do that. They have voted against every single action that helped the recession so far and would continue to do so if in power. Democrats need to stand up and say if the market won’t create jobs then it is the job of the government to do so.The second thing is to say that the ultra-wealthy are going to help pay for these jobs. They make more two weeks than you make all year, and we are going to make them pay 5% of everything over 79,000 a month to help put the people of this country back to work.This is the win/win the Democrats need. It puts the working folks (better known as 98% of the population) on their side and puts the screws to the folks who have had it so good for so long. It also has the long term affect of reducing some of the power of the ultra-wealthy to influence the debate.As I said before, I don’t like this kind of politics. It has its dangers mostly in stoking anger of one group of Americans against another. But there comes a time when we have to deal with what is not what we would like to believe. There is a line from Young Frankenstein: "A riot is an ugly sink, unt, I think that it is just about time dat ve had vone!"Class warfare is an ugly thing too, but it is just about time that we start to engage in it. The fat cats and ultra-wealthy have been doing so for years, now it has to be our turn.
The floor is yours.

Looks like my newest blogging software has a few tics which need to be worked out. Notice no paragraphs?

The GOP Welfare State

Believe it or not, I am actually an independent when it comes to politics. However, since this Bush character and his class of idiots have been in the White House, I have found no reason to support anything that they have done or that they try to do.

Now we have the Republicans trying to cut $4.9 billion from education, training, employment and other services (Reuters)

... the White House’s five-year plan foresees $66 billion in cuts to Medicare, a program for the elderly, and $12 billion in cuts for Medicaid, the state-federal program for the poor.

Reuters: Spratt said Bush’s plan projects a $61 billion budget surplus in 2012 while assuming only $50 billion in war costs in 2009 and none after that. This year, fighting wars in Iraq and Afghanistan could total around $170 billion.

Bush’s budget also does not factor in permanently fixing a quirk in the U.S. tax code so that middle-class taxpayers do not get hit with tax bills designed for the wealthy. The fix could cost around $1 trillion.

Let’s look at where some of the cash for the Iraq war reconstruction has gone to, or not.

Seattle Times: Waxman wanted to know how the Coalition Provisional Authority (CPA) could have shipped $12 billion in cash from the Federal Reserve in New York to Baghdad and handed it over to Iraqi ministries with only the sketchiest accounting controls. The cash, all 363 tons of it, was shrink-wrapped into $400,000 bricks and carried on C-130 cargo planes.

"Who in their right mind would send 363 tons of cash into a war zone?" Waxman asked. And with limited oversight, he said, "we have no way of knowing whether the cash shipped into the Green Zone ended up in enemy hands."

The special inspector general for Iraqi reconstruction, Stuart Bowen, said in a January 2005 report that $8.8 billion was unaccounted for after being given to the Iraqi ministries.

If they’d have dropped me just one of those bricks I could have spent it better than the Republicans have and I would have had positive results!

Bush seems to forget that he doesn’t work for the Iraqis or the oil companies (?) or Israel or anyone else but the American people. At least he does, for now!

Technorati Tags: GOP,Welfare,Budget Cuts

Paulson And The Bailout

  The financial bailout, that is. The Bush Crime Family has once again bent the taxpayer over and rammed the big one straight up our asses. Paulson needs to be replaced and investigated for activities which could/should include fraud.

   I do like the following idea.

WASHINGTON, November 17 - Senator Bernie Sanders (I-Vt.) said today he will introduce legislation to stop the release of a $350-billion second round of the Wall Street bailout.

Sanders, who voted against the $700-billion package Congress approved in October, said he has serious concerns about how the Bush administration and Treasury Secretary Henry Paulson are spending the bailout money that was already released.  He also said it was unacceptable that the oversight provisions in the bill were ignored. Source

  And then there is this from the Financial Times

A senior Republican senator is seeking an investigation into potential conflicts of interest among former Goldman Sachs executives serving at the US Treasury and whether any officials exceeded their authority by implementing a controversial tax change without the approval of Congress.

Chuck Grassley, the most senior Republican on the Senate finance committee, asked Eric Thorson, inspector-general of the Treasury, to investigate the "independence" of several Treasury officials who formerly worked at Goldman Sachs and serve as advisers to Treasury secretary Hank Paulson, the former chief executive of the Wall Street bank.

Mr Grassley said in a letter to Mr Thorson that there was reason to be concerned that “relationships” between the officials and board members at two merging banks, Wells Fargo and Wachovia, gave the “appearance of preferential treatment”.

Mr Grassley singled out Robert Steel, a former Goldman official who worked under Mr Paulson at the Treasury before he became chief executive of Wachovia.

Mr Grassley is specifically concerned with a change in the tax code the Treasury initiated in late September that saved some institutions tens of billions of dollars and paved the way for Wells Fargo's acquisition of Wachovia.

Technorati Tags: Henry Paulson,Wall Street,Bailout,James Inhofe,Bernie Sanders

Barack Obama's Speech

  I must say that I never really get into listening to political speeches no matter who is giving them. I must also say that the speech which I just heard from Barack Obama rocked!

  I do not have the video yet, so the text of the speech will have to do for now.

 Read it.

Barack Obama: To Chairman Dean and my great friend Dick Durbin; and to all my fellow citizens of this great nation.

With profound gratitude and great humility, I accept your nomination for the presidency of the United States.

Let me express my thanks to the historic slate of candidates who accompanied me on this journey, and especially the one who traveled the farthest -- a champion for working Americans and an inspiration to my daughters and to yours -- Hillary Rodham Clinton. To President Clinton, who last night made the case for change as only he can make it; to Ted Kennedy, who embodies the spirit of service; and to the next vice president of the United States, Joe Biden, I thank you. I am grateful to finish this journey with one of the finest statesmen of our time, a man at ease with everyone from world leaders to the conductors on the Amtrak train he still takes home every night.

To the love of my life, our next first lady, Michelle Obama, and to Sasha and Malia -- I love you so much, and I'm so proud of all of you.

Four years ago, I stood before you and told you my story -- of the brief union between a young man from Kenya and a young woman from Kansas who weren't well-off or well-known, but shared a belief that in America, their son could achieve whatever he put his mind to.

It is that promise that has always set this country apart -- that through hard work and sacrifice, each of us can pursue our individual dreams but still come together as one American family, to ensure that the next generation can pursue their dreams as well.

That's why I stand here tonight. Because for 232 years, at each moment when that promise was in jeopardy, ordinary men and women -- students and soldiers, farmers and teachers, nurses and janitors -- found the courage to keep it alive.

We meet at one of those defining moments -- a moment when our nation is at war, our economy is in turmoil, and the American promise has been threatened once more.

Tonight, more Americans are out of work and more are working harder for less. More of you have lost your homes and even more are watching your home values plummet. More of you have cars you can't afford to drive, credit card bills you can't afford to pay, and tuition that's beyond your reach.

These challenges are not all of government's making. But the failure to respond is a direct result of a broken politics in Washington and the failed policies of George W. Bush.

America, we are better than these last eight years. We are a better country than this.

This country is more decent than one where a woman in Ohio, on the brink of retirement, finds herself one illness away from disaster after a lifetime of hard work.

This country is more generous than one where a man in Indiana has to pack up the equipment he's worked on for 20 years and watch it shipped off to China, and then chokes up as he explains how he felt like a failure when he went home to tell his family the news.

We are more compassionate than a government that lets veterans sleep on our streets and families slide into poverty; that sits on its hands while a major American city drowns before our eyes.

Tonight, I say to the American people, to Democrats and Republicans and independents across this great land -- enough! This moment -- this election -- is our chance to keep, in the 21st century, the American promise alive. Because next week, in Minnesota, the same party that brought you two terms of George Bush and Dick Cheney will ask this country for a third. And we are here because we love this country too much to let the next four years look like the last eight. On November 4, we must stand up and say: "Eight is enough."

Now let there be no doubt. The Republican nominee, John McCain, has worn the uniform of our country with bravery and distinction, and for that we owe him our gratitude and respect. And next week, we'll also hear about those occasions when he's broken with his party as evidence that he can deliver the change that we need.

But the record's clear: John McCain has voted with George Bush 90 percent of the time. Sen. McCain likes to talk about judgment, but really, what does it say about your judgment when you think George Bush has been right more than 90 percent of the time? I don't know about you, but I'm not ready to take a 10 percent chance on change.

The truth is, on issue after issue that would make a difference in your lives -- on health care and education and the economy -- Sen. McCain has been anything but independent. He said that our economy has made "great progress" under this president. He said that the fundamentals of the economy are strong. And when one of his chief advisers -- the man who wrote his economic plan -- was talking about the anxiety Americans are feeling, he said that we were just suffering from a "mental recession," and that we've become, and I quote, "a nation of whiners."

A nation of whiners? Tell that to the proud autoworkers at a Michigan plant who, after they found out it was closing, kept showing up every day and working as hard as ever, because they knew there were people who counted on the brakes that they made. Tell that to the military families who shoulder their burdens silently as they watch their loved ones leave for their third or fourth or fifth tour of duty. These are not whiners. They work hard and give back and keep going without complaint. These are the Americans that I know.

Now, I don't believe that Sen. McCain doesn't care what's going on in the lives of Americans. I just think he doesn't know. Why else would he define middle-class as someone making under $5 million a year? How else could he propose hundreds of billions in tax breaks for big corporations and oil companies but not one penny of tax relief to more than 100 million Americans? How else could he offer a health care plan that would actually tax people's benefits, or an education plan that would do nothing to help families pay for college, or a plan that would privatize Social Security and gamble your retirement?

It's not because John McCain doesn't care. It's because John McCain doesn't get it.

For over two decades, he's subscribed to that old, discredited Republican philosophy -- give more and more to those with the most and hope that prosperity trickles down to everyone else. In Washington, they call this the Ownership Society, but what it really means is -- you're on your own. Out of work? Tough luck. No health care? The market will fix it. Born into poverty? Pull yourself up by your own bootstraps -- even if you don't have boots. You're on your own.

Well it's time for them to own their failure. It's time for us to change America.

You see, we Democrats have a very different measure of what constitutes progress in this country.

We measure progress by how many people can find a job that pays the mortgage; whether you can put a little extra money away at the end of each month so you can someday watch your child receive her college diploma. We measure progress in the 23 million new jobs that were created when Bill Clinton was president -- when the average American family saw its income go up $7,500 instead of down $2,000 like it has under George Bush.

We measure the strength of our economy not by the number of billionaires we have or the profits of the Fortune 500, but by whether someone with a good idea can take a risk and start a new business, or whether the waitress who lives on tips can take a day off to look after a sick kid without losing her job -- an economy that honors the dignity of work.

The fundamentals we use to measure economic strength are whether we are living up to that fundamental promise that has made this country great -- a promise that is the only reason I am standing here tonight.

Because in the faces of those young veterans who come back from Iraq and Afghanistan, I see my grandfather, who signed up after Pearl Harbor, marched in Patton's Army, and was rewarded by a grateful nation with the chance to go to college on the GI Bill.

In the face of that young student who sleeps just three hours before working the night shift, I think about my mom, who raised my sister and me on her own while she worked and earned her degree; who once turned to food stamps but was still able to send us to the best schools in the country with the help of student loans and scholarships.

When I listen to another worker tell me that his factory has shut down, I remember all those men and women on the South Side of Chicago who I stood by and fought for two decades ago after the local steel plant closed.

And when I hear a woman talk about the difficulties of starting her own business, I think about my grandmother, who worked her way up from the secretarial pool to middle-management, despite years of being passed over for promotions because she was a woman. She's the one who taught me about hard work. She's the one who put off buying a new car or a new dress for herself so that I could have a better life. She poured everything she had into me. And although she can no longer travel, I know that she's watching tonight, and that tonight is her night as well.

I don't know what kind of lives John McCain thinks that celebrities lead, but this has been mine. These are my heroes. Theirs are the stories that shaped me. And it is on their behalf that I intend to win this election and keep our promise alive as president of the United States.

What is that promise?

It's a promise that says each of us has the freedom to make of our own lives what we will, but that we also have the obligation to treat each other with dignity and respect.

It's a promise that says the market should reward drive and innovation and generate growth, but that businesses should live up to their responsibilities to create American jobs, look out for American workers, and play by the rules of the road.

Ours is a promise that says government cannot solve all our problems, but what it should do is that which we cannot do for ourselves -- protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology.

Our government should work for us, not against us. It should help us, not hurt us. It should ensure opportunity not just for those with the most money and influence, but for every American who's willing to work.

That's the promise of America -- the idea that we are responsible for ourselves, but that we also rise or fall as one nation; the fundamental belief that I am my brother's keeper; I am my sister's keeper.

That's the promise we need to keep. That's the change we need right now. So let me spell out exactly what that change would mean if I am president.

Change means a tax code that doesn't reward the lobbyists who wrote it, but the American workers and small businesses who deserve it.

Unlike John McCain, I will stop giving tax breaks to corporations that ship jobs overseas, and I will start giving them to companies that create good jobs right here in America.

I will eliminate capital gains taxes for the small businesses and the start-ups that will create the high-wage, high-tech jobs of tomorrow.

I will cut taxes -- cut taxes -- for 95 percent of all working families. Because in an economy like this, the last thing we should do is raise taxes on the middle-class.

And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as president: in 10 years, we will finally end our dependence on oil from the Middle East.

Washington's been talking about our oil addiction for the last 30 years, and John McCain has been there for 26 of them. In that time, he's said no to higher fuel-efficiency standards for cars, no to investments in renewable energy, no to renewable fuels. And today, we import triple the amount of oil as the day that Sen. McCain took office.

Now is the time to end this addiction, and to understand that drilling is a stop-gap measure, not a long-term solution. Not even close.

As president, I will tap our natural gas reserves, invest in clean coal technology, and find ways to safely harness nuclear power. I'll help our auto companies re-tool, so that the fuel-efficient cars of the future are built right here in America. I'll make it easier for the American people to afford these new cars. And I'll invest $150 billion over the next decade in affordable, renewable sources of energy -- wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and 5 million new jobs that pay well and can't ever be outsourced.

America, now is not the time for small plans.

Now is the time to finally meet our moral obligation to provide every child a world-class education, because it will take nothing less to compete in the global economy. Michelle and I are only here tonight because we were given a chance at an education. And I will not settle for an America where some kids don't have that chance. I'll invest in early childhood education. I'll recruit an army of new teachers, and pay them higher salaries and give them more support. And in exchange, I'll ask for higher standards and more accountability. And we will keep our promise to every young American -- if you commit to serving your community or your country, we will make sure you can afford a college education.

Now is the time to finally keep the promise of affordable, accessible health care for every single American. If you have health care, my plan will lower your premiums. If you don't, you'll be able to get the same kind of coverage that members of Congress give themselves. And as someone who watched my mother argue with insurance companies while she lay in bed dying of cancer, I will make certain those companies stop discriminating against those who are sick and need care the most.

Now is the time to help families with paid sick days and better family leave, because nobody in America should have to choose between keeping their jobs and caring for a sick child or ailing parent.

Now is the time to change our bankruptcy laws, so that your pensions are protected ahead of CEO bonuses; and the time to protect Social Security for future generations.

And now is the time to keep the promise of equal pay for an equal day's work, because I want my daughters to have exactly the same opportunities as your sons.

Now, many of these plans will cost money, which is why I've laid out how I'll pay for every dime -- by closing corporate loopholes and tax havens that don't help America grow. But I will also go through the federal budget, line by line, eliminating programs that no longer work and making the ones we do need work better and cost less -- because we cannot meet 21st century challenges with a 20th century bureaucracy.

And Democrats, we must also admit that fulfilling America's promise will require more than just money. It will require a renewed sense of responsibility from each of us to recover what John F. Kennedy called our "intellectual and moral strength." Yes, government must lead on energy independence, but each of us must do our part to make our homes and businesses more efficient. Yes, we must provide more ladders to success for young men who fall into lives of crime and despair. But we must also admit that programs alone can't replace parents; that government can't turn off the television and make a child do her homework; that fathers must take more responsibility for providing the love and guidance their children need.

Individual responsibility and mutual responsibility -- that's the essence of America's promise.

And just as we keep our keep our promise to the next generation here at home, so must we keep America's promise abroad. If John McCain wants to have a debate about who has the temperament, and judgment, to serve as the next commander in chief, that's a debate I'm ready to have.

For while Sen. McCain was turning his sights to Iraq just days after 9/11, I stood up and opposed this war, knowing that it would distract us from the real threats we face. When John McCain said we could just "muddle through" in Afghanistan, I argued for more resources and more troops to finish the fight against the terrorists who actually attacked us on 9/11, and made clear that we must take out Osama bin Laden and his lieutenants if we have them in our sights. John McCain likes to say that he'll follow bin Laden to the Gates of Hell -- but he won't even go to the cave where he lives.

And today, as my call for a time frame to remove our troops from Iraq has been echoed by the Iraqi government and even the Bush administration, even after we learned that Iraq has a $79 billion surplus while we're wallowing in deficits, John McCain stands alone in his stubborn refusal to end a misguided war.

That's not the judgment we need. That won't keep America safe. We need a president who can face the threats of the future, not keep grasping at the ideas of the past.

You don't defeat a terrorist network that operates in 80 countries by occupying Iraq. You don't protect Israel and deter Iran just by talking tough in Washington. You can't truly stand up for Georgia when you've strained our oldest alliances. If John McCain wants to follow George Bush with more tough talk and bad strategy, that is his choice -- but it is not the change we need.

We are the party of Roosevelt. We are the party of Kennedy. So don't tell me that Democrats won't defend this country. Don't tell me that Democrats won't keep us safe. The Bush-McCain foreign policy has squandered the legacy that generations of Americans -- Democrats and Republicans -- have built, and we are here to restore that legacy.

As commander in chief, I will never hesitate to defend this nation, but I will only send our troops into harm's way with a clear mission and a sacred commitment to give them the equipment they need in battle and the care and benefits they deserve when they come home.

I will end this war in Iraq responsibly, and finish the fight against al Qaeda and the Taliban in Afghanistan. I will rebuild our military to meet future conflicts. But I will also renew the tough, direct diplomacy that can prevent Iran from obtaining nuclear weapons and curb Russian aggression. I will build new partnerships to defeat the threats of the 21st century: terrorism and nuclear proliferation; poverty and genocide; climate change and disease. And I will restore our moral standing, so that America is once again that last, best hope for all who are called to the cause of freedom, who long for lives of peace, and who yearn for a better future.

These are the policies I will pursue. And in the weeks ahead, I look forward to debating them with John McCain.

But what I will not do is suggest that the senator takes his positions for political purposes. Because one of the things that we have to change in our politics is the idea that people cannot disagree without challenging each other's character and patriotism.

The times are too serious, the stakes are too high for this same partisan playbook. So let us agree that patriotism has no party. I love this country, and so do you, and so does John McCain. The men and women who serve in our battlefields may be Democrats and Republicans and independents, but they have fought together and bled together and some died together under the same proud flag. They have not served a Red America or a Blue America -- they have served the United States of America.

So I've got news for you, John McCain. We all put our country first.

America, our work will not be easy. The challenges we face require tough choices, and Democrats as well as Republicans will need to cast off the worn-out ideas and politics of the past. For part of what has been lost these past eight years can't just be measured by lost wages or bigger trade deficits. What has also been lost is our sense of common purpose -- our sense of higher purpose. And that's what we have to restore.

We may not agree on abortion, but surely we can agree on reducing the number of unwanted pregnancies in this country. The reality of gun ownership may be different for hunters in rural Ohio than for those plagued by gang-violence in Cleveland, but don't tell me we can't uphold the Second Amendment while keeping AK-47s out of the hands of criminals. I know there are differences on same-sex marriage, but surely we can agree that our gay and lesbian brothers and sisters deserve to visit the person they love in the hospital and to live lives free of discrimination. Passions fly on immigration, but I don't know anyone who benefits when a mother is separated from her infant child or an employer undercuts American wages by hiring illegal workers. This, too, is part of America's promise -- the promise of a democracy where we can find the strength and grace to bridge divides and unite in common effort.

I know there are those who dismiss such beliefs as happy talk. They claim that our insistence on something larger, something firmer and more honest in our public life is just a Trojan Horse for higher taxes and the abandonment of traditional values. And that's to be expected. Because if you don't have any fresh ideas, then you use stale tactics to scare the voters. If you don't have a record to run on, then you paint your opponent as someone people should run from.

You make a big election about small things.

And you know what -- it's worked before. Because it feeds into the cynicism we all have about government. When Washington doesn't work, all its promises seem empty. If your hopes have been dashed again and again, then it's best to stop hoping, and settle for what you already know.

I get it. I realize that I am not the likeliest candidate for this office. I don't fit the typical pedigree, and I haven't spent my career in the halls of Washington.

But I stand before you tonight because all across America something is stirring. What the naysayers don't understand is that this election has never been about me. It's been about you.

For 18 long months, you have stood up, one by one, and said enough to the politics of the past. You understand that in this election, the greatest risk we can take is to try the same old politics with the same old players and expect a different result. You have shown what history teaches us -- that at defining moments like this one, the change we need doesn't come from Washington. Change comes to Washington. Change happens because the American people demand it -- because they rise up and insist on new ideas and new leadership, a new politics for a new time.

America, this is one of those moments.

I believe that as hard as it will be, the change we need is coming. Because I've seen it. Because I've lived it. I've seen it in Illinois, when we provided health care to more children and moved more families from welfare to work. I've seen it in Washington, when we worked across party lines to open up government and hold lobbyists more accountable, to give better care for our veterans and keep nuclear weapons out of terrorist hands.

And I've seen it in this campaign. In the young people who voted for the first time, and in those who got involved again after a very long time. In the Republicans who never thought they'd pick up a Democratic ballot, but did. I've seen it in the workers who would rather cut their hours back a day than see their friends lose their jobs, in the soldiers who re-enlist after losing a limb, in the good neighbors who take a stranger in when a hurricane strikes and the floodwaters rise.

This country of ours has more wealth than any nation, but that's not what makes us rich. We have the most powerful military on Earth, but that's not what makes us strong. Our universities and our culture are the envy of the world, but that's not what keeps the world coming to our shores.

Instead, it is that American spirit -- that American promise -- that pushes us forward even when the path is uncertain; that binds us together in spite of our differences; that makes us fix our eye not on what is seen, but what is unseen, that better place around the bend.

That promise is our greatest inheritance. It's a promise I make to my daughters when I tuck them in at night, and a promise that you make to yours -- a promise that has led immigrants to cross oceans and pioneers to travel west; a promise that led workers to picket lines, and women to reach for the ballot.

And it is that promise that 45 years ago today, brought Americans from every corner of this land to stand together on a Mall in Washington, before Lincoln's Memorial, and hear a young preacher from Georgia speak of his dream.

The men and women who gathered there could've heard many things. They could've heard words of anger and discord. They could've been told to succumb to the fear and frustration of so many dreams deferred.

But what the people heard instead -- people of every creed and color, from every walk of life -- is that in America, our destiny is inextricably linked. That together, our dreams can be one.

"We cannot walk alone," the preacher cried. "And as we walk, we must make the pledge that we shall always march ahead. We cannot turn back."

America, we cannot turn back. Not with so much work to be done. Not with so many children to educate, and so many veterans to care for. Not with an economy to fix and cities to rebuild and farms to save. Not with so many families to protect and so many lives to mend. America, we cannot turn back. We cannot walk alone. At this moment, in this election, we must pledge once more to march into the future. Let us keep that promise -- that American promise -- and in the words of Scripture hold firmly, without wavering, to the hope that we confess.

Thank you, God Bless you, and God Bless the United States of America.

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