09/19/2012 archive

Yes, anything can happen, but with the latest open disdain for 47% of the people in this country by Mitt Romney, it’s looking like a safe bet that the President will be reelected. There’s also more time for Romney to say even more stupid shit. It’s almost like he’s running against himself, so I’m looking past the President”s very likely reelection onto life or death issues.

In this introspection I sadly conclude that there is just not enough differences in this campaign when to comes to the wars and the national security state; none of them will consider rolling it back even though that is what will ultimately make us safer. Destroying the 4th amendment did not make us safer one bit.

What makes us even less safe is the hate bred through what is called the collateral death of innocent civilians that we in this country and our horse race mindset can’t seem to understand. This is not something human beings just get over and why should they? Who are we to tell them to get over it? They literally can’t get over it, and this war is spilling blood in our name as jpmassar outlined the other day in his extremely important diary.

I Know You Don’t Want to Hear It, But We Have Blood On Our Hands. 8 Women Just Killed in Afghanistan

How many times must the cannonballs fly

Before they are forever banned?

“...precision aerial munitions… as well as precision fire from aircraft…”

At least eight women have died in a Nato air strike in Afghanistan’s eastern province of Laghman, local officials say. Nato has conceded that between five and eight civilians died as it targeted insurgents, and offered condolences.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day.

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Frances Fox Priven: Occupy’s Protest Is Not Over. It Has Barely Begun

A good many observers wonder, is Occupy over? After all, the encampments that announced the movement a year ago have largely disappeared, and no obviously similar protest demonstrations of young people have taken their place, at least not in the United States.

Nevertheless, I think the ready conclusion that the protests have fizzled is based on a misconception of the nature of movements, a misconception influenced by the metaphors we rely on. We think of these eruptions as something like explosions, Fourth of July fireworks perhaps that shoot into the sky, dazzle us for a moment, and then quickly fade away. The metaphor leads us to think of protest movements as bursts of energy and anger that rise in a great arc and then, exhausted, disappear.

In fact, no major American movement of the past fits that description. The great protest movements of history lasted not for a moment but for decades. And they did not expand in the shape of a simple rising arc of popular defiance. Rather, they began in a particular place, sputtered and subsided, only to re-emerge elsewhere in perhaps a different form, influenced by local particularities of circumstance and culture.

Ilyse Hogue: It’s the 1 Percent, Stupid (the Case Against the 47 Percent)

The news of Mitt Romney’s remarks at a closed-door fundraiser that were leaked by Mother Jones has been dominating since it broke yesterday. The scandalous content appears plentiful enough to keep pundits and political junkies glued to Twitter for the remainder of the cycle. And let’s be clear: between Romney’s callous “wait-and see” approach to the Middle East peace process, his instrumental view of Latino voters and his parasitic characterization of those who are too poor to pay income tax, he painted a devastating picture of himself as a leader and a person.

The line from the video that is the source of the most fascination is when Romney claims that he cares not at all for the 47 percent of Americans who pay no income taxes and freeload off the government, since they are sure to be Obama voters anyway. The statement is a window into the cynical and meanspirited worldview that would guide this candidate’s policies and priorities were he to win in November. This alone should give every voter pause, regardless of partisan affiliation.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

September 19 is the 262nd day of the year (263rd in leap years) in the Gregorian calendar. There are 103 days remaining until the end of the year.

On this day in 1796, President George Washington’s Farewell Address to the Nation is published.

George Washington’s Farewell Address was written to “The People of the United States” near the end of his second term as President of the United States and before his retirement to Mount Vernon.

Originally published in David Claypoole’s American Daily Advertiser on September 19, 1796 under the title “The Address of General Washington To The People of The United States on his declining of the Presidency of the

United States,” the letter was almost immediately reprinted in newspapers across the country and later in a pamphlet form. The work was later named a “Farewell Address,” as it was Washington’s valedictory after 45 years of service to the new republic, first during the Revolution of the Continental Army and later as the nation’s first president.

The letter was originally prepared in 1792 with the help of James Madison, as Washington prepared to retire following a single term in office. However, he set aside the letter and ran for a second term after his Secretary of the Treasury, Alexander Hamilton, and his Secretary of State, Thomas Jefferson, convinced him that the growing divisions between the newly formed Federalist and Democratic-Republican parties, along with the current state of foreign affairs, would tear the country apart in the absence of his leadership.

Four years later, as his second term came to a close, Washington revisited the letter and with the help of Alexander Hamilton prepared a revision of the original draft to announce his intention to decline a third term in office; to reflect the emerging issues of the American political landscape in 1796; and to parting advice to his fellow Americans, express his support for the government eight years following the adoption of the Constitution; and to defend his administration’s record.

The letter was written by Washington after years of exhaustion due to his advanced age, years of service to his country, the duties of the presidency, and increased attacks by his political opponents. It was published almost two months before the Electoral College cast their votes in the 1796 presidential election.

Crossposted from DocuDharma

A Rare Look at Why The Government Won’t Fight Wall Street

Matt Taibbi, Rolling Stone

September 18, 10:28 AM ET

The great mystery story in American politics these days is why, over the course of two presidential administrations (one from each party), there’s been no serious federal criminal investigation of Wall Street during a period of what appears to be epic corruption. People on the outside have speculated and come up with dozens of possible reasons, some plausible, some tending toward the conspiratorial – but there have been very few who’ve come at the issue from the inside.

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There are some damning revelations in this book, and overall it’s not a flattering portrait of key Obama administration officials like SEC enforcement chief Robert Khuzami, Department of Justice honchos Eric Holder (who once worked at the same law firm, Covington and Burling, as Connaughton) and Lanny Breuer, and Treasury Secretary Tim Geithner.

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Connaughton writes about something he calls “The Blob,” a kind of catchall term describing an oozy pile of Hill insiders who are all incestuously interconnected, sometimes by financial or political ties, sometimes by marriage, sometimes by all three. And what Connaughton and Kaufman found is that taking on Wall Street even with the aim of imposing simple, logical fixes often inspired immediate hostile responses from The Blob; you’d never know where it was coming from.

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when Kaufman tried to advocate for rules that would have prevented naked short-selling, Connaughton was warned by a lobbyist that it would be “bad for my career” if he went after the issue and that “Ted and I looked like deranged conspiracy theorists” for asking if naked short-selling had played a role in the final collapse of Lehman Brothers. Naked short-selling is another controversial practice. Essentially, when you short a stock, you’re supposed to locate shares of that stock before you go out and sell it short. But what hedge funds and banks have discovered is that the rules provide “leeway” – you can go out and sell shares in a stock without actually having it, provided you have a “reasonable belief” that you can locate the shares.

This leads to the obvious possibility of companies creating false supply in a stock by selling shares they don’t have. Without getting too much into the weeds here, there is an obvious solution to the problem, which essentially would be forcing companies to actually locate shares before selling them. In their attempt to change the system, Kaufman and Connaughton discovered that the Depository Trust Clearing Corporation, the massive quasi-private organization that clears most all stock trades in America, had come up with just such a fix on their own.

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A roundtable to discuss the idea was scheduled by the SEC on September 24, 2009. Of the nine invited participants, “all but one” were for the status quo. Connaughton expected the DTCC representatives to unveil their reform idea, but they didn’t.

The Banker Who’d Cut Social Security and Medicare – and May Become Treasury Secretary

Richard (RJ) Eskow, Huffington Post

09/17/2012 11:08 pm

Before entering public life Bowles was a banker with Morgan Stanley. He now serves on Morgan Stanley’s board, and has done so through a series of that bank’s legal issues. As Dean Baker notes, Bowles was also on the General Motors Board “from June of 2005 until it went into bankruptcy in the spring of 2009,” and “joined the board of Morgan Stanley, the Wall Street investment bank, near the peak of the housing bubble in December of 2005.”

Bowles is also on the Board of Facebook, whose IPO has been the subject of controversy and scandal. (Baker offers a fun, interactive graph of the economic performance of the companies on whose boards Bowles has served. It isn’t pretty.)

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The Simpson/Bowles proposal is often marketed — falsely — as the product of their deadlocked and failed Presidential Deficit Commission. It claims to be “centrist” because it offers unspecified tax increases as well as cuts — probably by decimating the middle class by eliminating tax deductions for employer health care, dependent children, and home mortgage interest. It also claims “bipartisanship” because Bowles the banker is also Democratic Party insider.

The “Simpson Bowles” austerity cuts to U.S. government spending closely resemble the cuts that have devastated the economies of Europe and Great Britain. Their plan would also cut Medicare and Social Security benefits — while providing drastically lower tax rates for billionaires and millionaires.

When you look at it carefully, Simpson/Bowles only differs from the radical right-wing Republican budget in a few areas, the most important of which is this: While the Republican plan calls for no tax increases at all, the Simpson/Bowles plan says it would offset its billionaire tax cuts. But since they also lower tax rates for billionaires, millionaires and corporations, they’re left to rely like Romney on unspecified loopholes, or “tax expenditures,” which could eviscerate the tax deductions that help the middle class get health insurance and pay their mortgages.

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Washington insiders scoff at anybody who dares question the sanctity of the “Simpson Bowles” concept. But once you leave Washington, that includes pretty much everybody. About 96 percent of the country’s voters reject their emphasis on deficits as our top priority, according to recent polling. The same poll showed that 37 percent of those polled considered “the economy and jobs” their top priority. That’s nearly ten times as many people.

That tracks closely with other poll results which showed that seventy percent of Americans were either “very uncomfortable” or “somewhat uncomfortable” with the Simpso(n)/ Bowles plan when it was released.

Meanwhile polls show that Medicare is a key issue in three battleground states, with Paul Ryan’s unpopular plan giving Democrats a decided edge on that issue. The selection of Bowles would damage that advantage if it was announced before the election, and would create a sense of betrayal if announced afterwards.

That particular form of right-wing wealth redistribution is what allows Simpson, Bowles, their funders and supporters to keep bragging that their plan is “brave.” If they were really brave they’d admit that they’re offering a right-wing austerity plan, not a “nonpartisan” solution to a long-term issue that’s receiving attention that should be focused on today’s jobs crisis.

Since Romney Raised the Issue of Freeloaders, What Is Erskine Bowles?

Dean Baker, cepr

Tuesday, 18 September 2012 04:42

Mr. Bowles has earned millions of dollars sitting on corporate boards over the last decade. The stock prices of the companies on whose boards he sat have mostly plummeted. Since 2003 the Erskine Bowles stock index has lost more than one third of its value. By comparison, the S&P 500 has risen by more than 50 percent. If Mr. Bowles was trying to serve shareholders, he has not done a very good job.

If people think that this is a private matter, with Mr. Bowles just ripping off shareholders while Governor Romney’s freeloaders are ripping off taxpayers, think again. One of the companies on whose board Mr. Bowles sat, General Motors, went bankrupt with substantial costs to the government. Another, Morgan Stanley, would have gone bankrupt without extraordinary assistance from the Fed and Treasury, which continues to this day in the form of implicit too big to fail insurance.

So, if we want to have a debate about people who freeload on the rest of the country, we should have folks like Erskine Bowles at center stage. Of course he is in a much higher income bracket than the folks who get Social Security or unemployment insurance from the government, but that fact should not be allowed to color the debate.

Most of us already know that tax cuts, especially for the wealthy, do not create jobs nor do they stimulate economic growth. But there are those who are still pushing this unicorn myth. So here are some facts:

One of the first things you notice in the chart is that the American economy was not especially healthy even before the financial crisis began in late 2007. By 2007, remarkably, the economy was already on pace for its slowest decade of growth since World War II. The mediocre economic growth, in turn, brought mediocre job and income growth – and the crisis more than erased those gains.

The defining economic policy of the last decade, of course, was the Bush tax cuts. President George W. Bush and Congress, including Mr. Ryan, passed a large tax cut in 2001, sped up its implementation in 2003 and predicted that prosperity would follow.

The economic growth that actually followed – indeed, the whole history of the last 20 years – offers one of the most serious challenges to modern conservatism. Bill Clinton and the elder George Bush both raised taxes in the early 1990s, and conservatives predicted disaster. Instead, the economy boomed, and incomes grew at their fastest pace since the 1960s. Then came the younger Mr. Bush, the tax cuts, the disappointing expansion and the worst downturn since the Depression.

That was the conclusion from David Leonhardt’s new column today for The New York Times, and it was precisely the finding of a new study from the Congressional Research Service, “Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945” (pdf).

That study concluded that not only did tax cuts for the upper brackets did not stimulate growth, they are associated with increasing income disparity:

    The top income tax rates have changed considerably since the end of World War II. Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The average tax rate faced by the top 0.01% of taxpayers was above 40% until the mid-1980s; today it is below 25%. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the second World War.

   The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

   However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced-lower top tax rates may be associated with greater income disparities.

In another study that was cited in an article by tax expert David Cay Johnston, Owen M. Zidar, a graduate economics student at the University of California at Berkeley, and a former staff economist on the White House Council of Economic Advisers for President Obama, looked at which tax cuts did stimulate economic growth:

He reasoned that “if tax cuts for high income earners generate substantial economic activity, then states with a large share of high income taxpayers should grow faster following a tax cut for high income earners.” The data show that tax cuts at the top, though, do not result in faster growth in states with more high-earners.

“Almost all of the stimulative effect of tax cuts,” Zidar found, “results from tax cuts for the bottom 90 percent. A one percent of GDP tax cut for the bottom 90 percent results in 2.7 percentage points of GDP growth over a two-year period. The corresponding estimate for the top 10 percent is 0.13 percentage points and is insignificant statistically.” [..]

That fits with the argument made over the last century by a variety of business leaders – carmaker Henry Ford and retailer Edward Filene among them – that the path to economic growth lies in workers making enough (and having enough after taxes) to buy goods and services.

These facts need to be pounded ad nauseum to Congress and the White House, no matter which party is in charge.

(All emphasis mine)

Crossposted from DocuDharma

I’m actually a great admirer and have been for years.  I freely admit that I’ve adjusted my writing style based on his which I think works much better for Front Page pieces than my 2500 word Jim Blaine homages.

He has a new temporary gig-

Writing Stuff Elsewhere

Atrios, Eschaton

Tuesday, September 18, 2012

Doing a weekly online column for USA Today until the election. I’ll use it to promote some crazy ideas.

Viva Social Security

By Duncan Black, USA Today

Tuesday, September 18, 2012

Instead of considering some exciting new program to try to encourage workers into saving more, another Rube Goldberg incentive contraption designed to nudge individual behavior in the right direction, we should increase the level of retirement benefits in the existing Social Security program.

That sounds like blasphemy because we’ve all been fed the myth that Social Security is bankrupt. It is almost universally accepted in policy circles and in the pundit class that strengthening Social Security involves cutting future benefits relative to what current law promises because according to current projections, Social Security only has the ability to pay promised benefits in full until 2033, and then 75% of them thereafter. The basic thinking is that we must promise to cut benefits now so that we won’t necessarily have to cut them 22 years from now. What?

Imagine if that is how we treated defense spending. Since it appears budgets will be tight in the 2030s, best to mothball all those aircraft carriers today. Who would buy that argument?

…

Social security is only bankrupt to the extent that our political leaders lose the will to invest in a decent retirement for American workers.

Crossposted from DocuDharma

Who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled.

Breuer Admits That Economists Have Convinced Him Not to Indict Corporations

by emptywheel

Posted on September 14, 2012

I’ve become increasingly convinced that DOJ’s head of Criminal Division, Lanny Breuer is the rotting cancer at the heart of a thoroughly discredited DOJ. Which is why I’m not surprised to see this speech he gave at the NYC Bar Association selling the “benefits” of Deferred Prosecution Agreements.  (h/t Main Justice) He spends a lot of his speech claiming DPAs result in accountability.

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But the real tell is when he confesses that he “sometimes-though … not always” let corporations off because a CEO or an economist scared him with threats of global markets failing if he held a corporation accountable by indicting it.

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None of this is surprising, of course. It has long been clear that Breuer’s Criminal Division often bows to the scare tactics of Breuer’s once and future client base. (In his speech, he boasts about how well DPAs and NPAs have worked with Morgan Stanley and Barclays, respectively.)

It’s just so embarrassing that he went out in public and made this pathetic attempt to claim it all amounts to accountability.

Crony Capitalism, American Style

L. Randall Wray, EconoMonitor

September 16th, 2012

Our nation’s top cops freely admit that they have no interest in prosecuting criminal behavior perpetrated by our elite 1% at the top of our crony capitalism pyramid. As reported at Naked Capitalism, Lanny Breuer, head of the DOJ’s Criminal Division, practically brags about the absence of criminal convictions for all the fraud perpetrated over the past decade. He freely admits that when his department suspects a big bank of fraud, he calls in the bank’s team to provide a flashy presentation showing why it should not be investigated. The banksters make the argument that actually prosecuting fraudsters would be bad for crony capitalism, which of course scares the bejeebers out of Washington. So Breuer’s office then makes nice with the banksters, and they all go back to doing what they’ve been doing-moving all wealth to the cronies in the top 1%.

The Wall Street bank’s business model is fraud.

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You all already understand that mortgage brokers and property appraisers were in cahoots-overvaluing property to justify out-sized mortgages. You know that brokers pushed “don’t ask, don’t tell” “Liar’s loans” to put borrowers into loans they could not afford, and that they doctored loan documents after borrowers had signed them to cover up the lender’s fraud. And you know that the Wall Street banks created MERS to evade proper recording of property records, effectively wiping out half a millennium of record keeping so that no one any longer knows who owns what.

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(I)n fact, in many cases mortgages were never bundled into the securities. So it is not just a problem with the quality of the mortgages backing the securities. And it is not just a problem with the fact that the trustees lied about what was behind the securities. And it is not just a problem of splitting off the notes from the deeds. There is accumulating evidence that the only thing backing securities is an empty “paper bag“: mortgages were never actually securitized. The securities your pension fund might be holding were never worth a dime because they securitized air.

And many of these securitizations were supposed to be REMICs, which offer tax advantages but only if done properly. Guess what. One of the rules is that the mortgages must be put in the REMIC almost immediately. That rule was probably rarely followed; and of course if the mortgages were never put there at all, REMIC rules were certainly violated so the investors owe huge backtaxes. Wall Street’s response is to make a new “Wall Street Rule”: hey we all did it, and if the IRS pursues taxes and if we are pursued for fraud, then the whole system blows up. This is precisely the kind of line Breuer finds irresistibly logical, so you can bet his office won’t be going after the securitizers.

What I think is shocking is that a President of the United States would go behind closed doors and declare to a group of wealthy donors that they are ‘victims’, entitled to handouts, and don’t have to take ‘personal responsibility’ for their thefts and fraud.

Bruce Hornsby and The Range- That’s just the way it is