Tag: Economics

Recently Naomi Klein, the author of the “Shock Doctrine: The Rise of Disaster Capital Management”, has appeared on the Rachel Maddow Show and with Amy Goodman on Democracy Now discussing Anti-Union Bills and Disaster Capital Management American-Style:

   NAOMI KLEIN: Well, I just found out about this last night, and like I said, there’s so much going on that these extraordinary measures are just getting lost in the shuffle. But in Michigan, there is a bill that’s already passed the House. It’s on the verge of passing the Senate. And I’ll just read you some excerpts from it. It says that in the case of an economic crisis, that the governor has the authority to authorize the emergency manager-this is somebody who would be appointed-to reject, modify or terminate the terms of an existing contract or collective bargaining agreement, authorize the emergency manager for a municipal government-OK, so we’re not-we’re talking about towns, municipalities across the state-to disincorporate. So, an appointed official with the ability to dissolve an elected body, when they want to.

   AMY GOODMAN: A municipal government.

   NAOMI KLEIN: A municipal government. And it says specifically, “or dissolve the municipal government.” So we’ve seen this happening with school boards, saying, “OK, this is a failing school board. We’re taking over. We’re dissolving it. We’re canceling the contracts.” You know, what this reminds me of is New Orleans after Hurricane Katrina, when the teachers were fired en masse and then it became a laboratory for charter schools. You know, people in New Orleans-and you know this, Amy-warned us. They said, “What’s happening to us is going to happen to you.” And I included in the book a quote saying, “Every city has their Lower Ninth Ward.” And what we’re seeing with the pretext of the flood is going to be used with the pretext of an economic crisis. And this is precisely what’s happening. So it starts with the school boards, and then it’s whole towns, whole cities, that could be subject to just being dissolved because there’s an economic crisis breaking collective bargaining agreements. It also specifies that-this bill specifies that an emergency manager can be an individual or a firm. Or a firm. So, the person who would be put in charge of this so-called failing town or municipality could actually be a corporation.

We are now seeing the push to fulfill this agenda to make “harsher American less democratic”.  Not  only are they stripping the rights of workers but the Republican corporate agenda is now going after the one remedy that Americans have to stop them, voting rights. Currently there are bills under consideration in 32 states to make it harder to vote in 2012, by forcing people to ID that the poor, minorities and students that they have difficulty obtaining, eliminating same day registration and restricting the voting rights of people who have served time in prison.

Michael Moore appeared on the Rachel Maddow Show commenting on the aftermath of the stealth, and quite possibly illegal, vote by the Republicans in the Wisconsin Senate to remove the right of collective bargaining from state workers. He was so furious that his voice actually broke with the emotion of the moment. Every working person in this country needs to walk out on Friday at 2 PM in your respective time zones and join the people of Wisconsin to take back our country for the people.

This is not just about the rights of workers to bargain but it is a class war that, as Michael Moore says, was started 30 years ago by Ronald Reagan. It is civil and human rights issue as well.

Tens of Thousands Cheer Michael Moore in Madison: “You Have Aroused a Sleeping Giant, Known as the Working People”

Filmmaker Michael Moore marched with members of Madison Firefighters Local 311 to the Wisconsin Capitol Saturday and delivered a old-school progressive populist address is which he told a crowd numbering in the tens of thousands that: “Wisconsin is not broke. America is not broke.”

“The country is awash in wealth and cash. It’s just not in your hands,” he told the Wisconsinites who rallied to challenge the claim that the state needs to strip public employees and their teachers of collective bargaining rights in order to balance budgets.

Moore ripped apart Wisconsin Governor Scott Walker’s claim, made repeatedly in recent weeks, that the state is broke.

“Never forget the three biggest lies of the past ten years,” Moore said. “Number one: America is broke. Number two: there are weapons of mass destruction. Number three: The Packers can’t win the Super Bowl Without Brett Farve.”

Laura Flanders of GRITtv interviewed Mr. Moore this past week.

For anyone who still thinks the inspiring actions in Wisconsin, Ohio and Indiana are just about public employees in those states, here’s a moving dose of reality.

People in every walk of life and every part of the country — even other countries — are expressing heartfelt gratitude to the 14 Democratic state senators who left Wisconsin Feb. 17 rather than allow Gov. Scott Walker to pass a sham budget bill taking from state and local workers the right to bargain for good middle-class jobs.

Gov. Walker and state Republicans may be sending them $100-a-day fines and arrest warrants, but take a look at some Facebook and phone messages real people are sending the brave Wisconsin 14

At least the way many economists practice it.  Instead it is a faith based Voodoo cult.

For one thing science is predictive and replicable.

Neo-classical synthesis predicts that reduction in Government spending, without increases in spending of other sectors of the overall economy like Business and Consumers, decreases Aggregate Demand.  In the absence of Demand businesses stop producing now surplus goods and services (there’s no demand for them you see) and reduce marginal expenses (fire people and close factories) and hoard capital (money).

Pretty predictive huh?

And in terms of replicable- we have seen this same phenomena time after time ever since there have been economies and the end result is always the same.  Voodoo economics believes in Tinkerbell and Pixie Dust.

How to Kill a Recovery

By PAUL KRUGMAN, The New York Times

Published: March 3, 2011

Republicans believe, or at least pretend to believe, that the direct job-destroying effects of their proposals would be more than offset by a rise in business confidence. As I like to put it, they believe that the Confidence Fairy will make everything all right.

…

(W)e have a lot of evidence from other countries about the prospects for “expansionary austerity” – and that evidence is all negative. Last October, a comprehensive study by the International Monetary Fund concluded that “the idea that fiscal austerity stimulates economic activity in the short term finds little support in the data.”

And do you remember the lavish praise heaped on Britain’s conservative government, which announced harsh austerity measures after it took office last May? How’s that going? Well, business confidence did not, in fact, rise when the plan was announced; it plunged, and has yet to recover. And recent surveys suggest that confidence has fallen even further among both businesses and consumers, indicating, as one report put it, that the private sector is “unprepared to fill the hole left by public sector cuts.”

…

Over the next few weeks, House Republicans will try to blackmail the Obama administration into accepting their proposed spending cuts, using the threat of a government shutdown. They’ll claim that those cuts would be good for America in both the short term and the long term.

But the truth is exactly the reverse: Republicans have managed to come up with spending cuts that would do double duty, both undermining America’s future and threatening to abort a nascent economic recovery.

I’m not taking any bets on whether Obama caves again or not, or what the results will be when he does, just over/unders on how long it will take.

Here comes another assault on your pocket book. Grocery store prices for just about everything from meat to soda will be expected to spike. On of the budgets cuts that Congress could make that might ease the pain at the checkout counter and the gas pumps is to end the billions that are wasted subsidizing ethanol production which not only costs more to produce than a gallon of gas but pollutes more in its production.

Corn Futures Spiking as USDA Reports Decrease in Supply

The outlook for international food and grain supplies is looking more uncertain after the United States Department of Agriculture (USDA) reported projections that corn supply would decrease to lowest level in 15 years according to the Wall Street Journal.

The supply of corn has been depleted for a multitude of reasons including increased ethanol production, increased livestock feeding, and resulting rises in international demand. Luke Chandler, a commodity research analyst for Rabobank, has suggested that ethanol production has “changed [markets] in a structural way” and that the recovery for prices will take substantial time.

Consumption rates as evidenced by the USDA report show that the 12.4 billion bushels harvested in the US agricultural sector will decrease to 651 million bushels by August 31, 2011.

Say it isn’t so:

Is Twitter worth $10bn?

Talks with potential suitors Facebook and Google reportedly value Twitter at $8-10bn

Twitter has been holding talks with potential suitors including Facebook and Google that could value the micro-blogging site at $10bn (£6.2bn), according to reports.

The early stage talks are not believed to have progressed far but, according to the Wall Street Journal, one thing has been agreed on: the loss-making firm is worth somewhere between $8-10bn.

Twitter is a private company and does not disclose its revenues. Last year it is estimated to have had revenues of $45m but ended the year making a loss as the firm spent on hiring and new data centres. This year Twitter’s revenues are expected to more than double to between $100-110m.

This is mind bending. Faced with rising heating prices of oil and natural gas, the President wants to cut energy assistance for the poor by cutting $3 billion from LIHEAP funding. But, heaven forbid, we should cut from the sacred cow of defense spending or Homeland Security, or end the Bush tax cuts black holes of the budget deficit.

How many people, if any, might actually lose the assistance is difficult to determine. Officials were quick to point out that LIHEAP spending has grown significantly over the past several years as the government tried to keep up with rising gas prices. In 2008, the government spent $2.8 billion on LIHEAP. In 2009, thanks to the Recovery Act, better known as the stimulus bill, the figure jumped to $8.1 billion. So the cut from that high level restores LIHEAP to something close to where it was before Obama took office. Other circumstances, such as the weather and fuel prices, could effect the distribution of benefits.

Still, despite the uncertainties surrounding the proposed cut, it is dramatic. LIHEAP has been semi-sacred for most Democrats and many Republicans–a program that carries an emotional resonance as it was designed to keep poor people, particularly older poor people, cool in the summer and warm in the winter. “A lot of people in the Northeast are going to be unhappy,” an administration official briefed on the budget said.

This is what’s happening around the country;

N.H. gets additional $14m in heating aid; Maine to get another $23m

ROCHESTER – Thanks to help from the federal government, potentially thousands of New Hampshire and Maine households won’t be left out in the cold this winter.

On Tuesday, Sen. Jeanne Shaheen, D-N.H., announced the Granite State will receive an additional $13,924,612 in funding from the U.S. Department of Health and Human Services (HHS) under the Low Income Home Energy Assistance Program (LIHEAP), which provides heating aid to households in need.

According to a release from Shaheen, the funds are in addition to the $19,767,875 HHS has already released to the state as of Dec. 10, and bring New Hampshire’s Fiscal Year 2011 total through March 4 to $33,692,487 – nearly equal to the total it received during the same period last year.

Community Advocates, Entergy Employees Seek Sustained Funding to Help Low-Income Customers in Need Pay Energy Costs

NEW ORLEANS, Feb. 7, 2011 PRNewswire — Entergy Corporation employees and advocates for low-income residents are in Washington, D.C., this week to ask Congress for funding to help low-income families, the elderly and the disabled pay energy costs through the Low Income Home Energy Assistance Program.

On Feb. 9, Entergy employees and nonprofit group representatives will be among more than 140 advocates from across the country participating in the National Fuel Funds Network’s Washington Action Day for LIHEAP. Entergy employees are there as part of their ongoing commitment to help low-income customers. LIHEAP is America’s primary tool to help working-poor families pay for home energy costs, especially those families with preschoolers, elderly or disabled members.

Frigid winter weather forces poor to choose heat or rent

Poor face crunch as utility bills soar when temperatures plunge

A mother had her electricity cut off this week even as more snow and cold headed for Nashville.

The working woman had the choice, “pay the rent or pay the utility bill,” after she got behind with a large December power bill, said Tanya Gray of the Martha O’Bryan Center, where the woman sought help Wednesday.

Colder-than-normal temperatures last month and in January have sent utility bills spiraling up.

Local agency will be able to help poor heat their homes after all

An organization will be able to continue to help low-income families stay warm in the winter after all.

One week ago Mid Michigan Community Action got a letter notifying it would lose more than $500,000 in funding.  The state said it was taking the money back effective January 31, 2011 because the federal government cut funding to the state’s low income energy assistance program or LIHEAP.

snip

Then, late Monday the state notified Mid Michigan Community Action it would not be reclaiming the funding after all.  The federal government reinstated funding after many voiced concerns such cuts could be deadly.

This President keeps trampling on those who can least afford it and his supporters will make excuses for him. This isn’t the way create jobs or solve the budget problems. Disgusting

I know all too much about writing for free.  I do it here all the time. It’s a labor of love.  I’ve been at it for more than 900 blog posts and more than 5 years.  I know about writing without being paid for it.  Despite that, and despite my understanding that when I post at group blogs I know I won’t get paid, I am absolutely furious about the AOL-Huffington Post Deal.  Why?  Because the writers are getting screwed, and they’re not going to get a cent out of the deal. Not a sou.

The news this morning–  I’m sure you haven’t missed it–  was that that beleaguered, dinosaur of dial up AOL has bought Huffington Post and made that doyenne of self promotion and faux progressive politics, Arianna, an AOL executive.  Here’s the essence of the story from the New York Times:

Don’t know about you, but I’ll certainly be looking for alternative viewing tonight.

Please take your seats for the second act.

But I’m not done vomiting.

• AMC Family– Mean Girls, Mean Girls 2
• Bravo– The Fashion Show (Finale)
• Comedy– Onion SportsDome
• Disney– Eloise at the Plaza
• Discovery– Dirty Jobs (last week’s and new), Auction Kings (premier)
• ESPN– College Hoopies, Florida @ Georgia, Purdue @ Ohio State
• ESPN2– Australian Open
• Food– Cupcake Wars, Chopped (premiers)
• FX– The Incredible Hulk, Lights Out x 3 (Episode 2 premier and 2 Instapeats)
• National Geographic– English Royals (with premier)
• Oxygen– Catwoman
• Sci Fi– TNG marathon
• Speed– Monster Jam
• Turner Classic– Sons of the Desert, General Spanky, Topper
• TLC– What Not to Wear (premier)
• TNT– Bad Boys
• Travel– Bizarre Foods With Andrew Zimmern (last week’s and new)
• USA– White Collar x 2 (premier and Instapeat)
• Vs.– Canadiens @ Flyers

Hello, Fry. Muahahahaha! Just dropped by to make sure you’re as happy with our little deal as I am… oh, give me back my hands! These things are always touching me in… places.

Later-

“The use of words expressing something other than their literal intention.” Now that *is* irony!

Not quite Bender Bending Rodriguez.

• AMC– Airplane
• Comedy– The Devil’s Hands Are Idle Playthings
• History– Top Gear (Season Finale repeat)
• Sci Fi– Dead Space: Downfall
• Turner Classic– There Goes My Heart, Zenobia
• Toon– Blue Harvest
• USA– Royal Pains (this week’s)
• VH1– Barbershop

Dave in repeats from 11/22.  Jon has James Franco, Stephen Amy Chua.  Conan hosts Steven Ho and Wanda Jackson.

Your lyrics lack subtlety! You can’t just have your characters announce how they feel! That makes me feel angry!

Zap2it TV Listings, Yahoo TV Listings

The Obama tax deal with Republicans is insane

Tony Wikrent, Real Economics

Wednesday, December 8, 2010, 8:54 PM

If you look under the hood of the industrial economy, you easily see why there is this counter-intuitive relationship between tax rates and economic growth . With high taxes, the only way to retain the bulk of the wealth created by a business is by reinvesting it in the business — in plants, equipment, staff, research and development, new products and all the rest. But if tax rates are low, then there is more incentive to pull the wealth out, by declaring it as profits that are taxed at what turns out to be too low a rate. In other words, low taxes create an incentive for profit taking.

…

If tax rates are high enough to discourage profit taking – forcing wealth created by a business to be recycled back into the business – then businesses are pushed toward longer-term planning, as they invest in new plant and equipment that will be used for many years. And you do not get the absurd situation you have now, where companies are posting record breaking profits, but are not buying new equipment, nor hiring new employees.

Low tax rates encourage taking wealth out of industrial companies; the wealth taken out must then be “put to work.” That means more money chasing “investment” opportunities, leading to price increases in financial capital or real estate or some other asset. In other words, an asset bubble. The rise in prices of an asset bubble has nothing to do with the creation of real wealth. It all looks like prosperity – until the asset bubble bursts. That’s where we are now.

Is it that simple?  Yes, yes it is.  It’s just that simple.

I encourage you to read the whole thing which also includes 3 great historical failures of low tax policies and a prescription for a modest financial transactions tax to further encourage investment in capital (as opposed to financial) assets.

(h/t Corrente)

First of all I have to give credit to TheMomCat for the title.  It’s her coinage as far as I know, and I think it’s pretty punny.

So what’s so bad about the Tax Cut deal outside, of course, breaking yet another major campaign promise?

Well, it raises taxes on those making less than $20,000 a year.

The “2% Payroll Tax Cut” starves Social Security, throwing it into a fiscal crunch that did not previously exist.

The Estate Tax break alone, affecting only 1.62% of Estates, will cost over $23.2 Billion per year.

And it runs up a $900 Billion Defict in just 2 years with over 70% of the benefits going to the Wealthiest 2% and Corporations, proving that anyone in Washington who claims to care about The Deficit is a FLAT OUT LIAR.  As Robert Reich says– “Families with incomes of over $1 million will reap an average of about $70,000, while middle-class families earning $50,000 a year will get an average of around $1,500.”

Not to mention that all these Republican Trickle Down Voodoo Economics Policies have been tried and tested for the last 10 years and are PROVEN FAILURES.

Likewise Liars are anyone who claims to care about Democratic Electoral Victory.  74% of Obama contributors and volunteers are deeply opposed to this deal, while fully 57% say it will make them less likely to support Democratic Candidates in 2012.

And Barack Hussein Obama is not just a Liar, but a Craven, Cowardly, Petulant, Whiner.

Update: I ought to point out before you invest a lot of time that the presser runs 32:24 and the Special Comment 11:51.  Americablog had the best liveblog coverage that I have read.