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EditorBlog (1778)



krugman15It's about time Paul Krugman took a victory lap – and he does in his Monday New York Times column:


But just look at the predictions the two sides in this debate have made. People like me predicted right from the start that large budget deficits would have little effect on interest rates, that large-scale “money printing” by the Fed (not a good description of actual Fed policy, but never mind) wouldn’t be inflationary, that austerity policies would lead to terrible economic downturns. The other side jeered, insisting that interest rates would skyrocket and that austerity would actually lead to economic expansion. Ask bond traders, or the suffering populations of Spain, Portugal and so on, how it actually turned out.


Is the story really that simple, and would it really be that easy to end the scourge of unemployment? Yes — but powerful people don’t want to believe it. Some of them have a visceral sense that suffering is good, that we must pay a price for past sins (even if the sinners then and the sufferers now are very different groups of people). Some of them see the crisis as an opportunity to dismantle the social safety net. And just about everyone in the policy elite takes cues from a wealthy minority that isn’t actually feeling much pain.


What has happened now, however, is that the drive for austerity has lost its intellectual fig leaf, and stands exposed as the expression of prejudice, opportunism and class interest it always was. And maybe, just maybe, that sudden exposure will give us a chance to start doing something about the depression we’re in.


Krugman's boasting is long over due, but in specific, this time comes from the most unlikely of sources: a Univeristy of Massachusetts graduate economic student who discovered major statistical errors in the primary research paper (authored by Carmen Reinhart and Kenneth Rogoff) used by advocates to justify austerity measures.


Thomas Herndon, the graduate student who received the excel spread sheet after much persistence that Reinhart and Rogoff used to justify their pro-austerity theory, does not accept the viewpoint that the errors were minor:


(Photo: Wikipedia)


bush420Of Thursday's dedication of the George W. Bush presidential library, NPR headlines an article that details how President "Obama's Bush Library Speech Leaves Iraq And More Unspoken."

Most Americans of both parties have, over the years, appeared to have adopted the attitude that the stolen election of 2000 is something the nation has gotten over.  But it's hard not to underscore that the George W. Bush presidential library is really a fraud.  

After all, Bush was never elected president.  On the 10th anniversary of his anointment by the Supreme Court, and particularly by the stay of the Florida state-mandated recount by Antonin Scalia – a long-time buddy of Dick Cheney and rabid right wing partisan.  In 2010, Eric Alterman recounted just some of the machinations that led to an election that was stolen even before the votes were cast (which was done with a number of voter suppression strategies, including the purging of tens of thousands of largely minority voters in Florida  done by a firm called ChoicePoint) on the tenth anniversary of the legalized putsch.

The coup was openly revealed in Scalia's infamous stay of a state-mandated recount (Bush, by the way, as governor of Texas signed a bill that would have made a recount in Florida automatic if the vote were as close in Texas as it officially was in the Sunshine State) when he stated that a recount "threatens irreperable harm to [Bush] and to the country, by casting a cloud upon what he claims to be the legitimacy of his election."  In short, Scalia is saying that if Bush lost after a recount it would hurt his reputation as president since the Supreme Court would install him in the White House no matter what the voters decided in Florida. (Remember that Al Gore won the national popular vote by more than 540,000 votes.)

(Photography: @ LaRsNoW @)

toiletpaper22Yes, the rumors have been rampant for a few weeks that the infamous Koch brothers (top ranking billionaires) will buy what is left of the Chicago Tribune newspaper empire from a board appointed by the Tribune Company creditors.
The creditors apparently want to sell the unprofitable newspapers but keep the lucrative television stations, radio stations, real estate and other profitable and potentially profitable divisions of the Tribune Company.
Please remember that what is at stake here is not just the flagship Chicago Tribune, but also the Los Angeles Times, the Baltimore Sun, the Hartford Courant, the Orlando Sentinel and other papers including the emerging Spanish edition market of print publications.
Harold Meyerson writes in the Washington Post a virtual R.I.P. to the Los Angeles Times, in which he laments:  
The Koch boys, whose oil-and-gas-based fortune places them just behind Bill Gates, Warren Buffett and Larry Ellison as the wealthiest Americans, have been among the chief donors to the tea party wing of the Republican Party. Their political funding vehicle, Americans for Prosperity, ranked with casino billionaire Sheldon Adelson among the largest funders of right-wing causes and candidates in 2012. Their purchase offer won’t be buttressed by a record of involvement in or commitment to journalism on their part. But it will come complete with a commitment to journalism as a branch of right-wing ideology….
(Photo: NCReedplayer)


crusadersThere are few Americans -- if any but extremist Armageddon (of any religion) and anti-government militia supporters -- who feel anything but the deepest of sorrow for the victims of the Boston Marathon apparent religious act of terrorism – conducted by what appear to be a radicalized permanent resident and his younger brother, an American citizen. It was -- as was 9/11 --  a heinous, shocking act.

But the insightful Juan Cole puts into perspective that most followers of Islam are peaceful people.  The Jihadists and their networks compose a small percentage of believers in the Islamic faith.

Perhaps it is a little too early to start comparing the death tolls caused by different religious faiths in the last 100 years, but Cole takes a stab at it -- and this is what he finds. In the 20th Century, of the estimated (and this is hardly a firm figure, understated if anything) 120 million people who were killed in wars and war-like acts (terrorism is war, generally upon civilians, by a non nation-state) only a small fraction of that figure was the result of Muslim killings. Cole offers a chart that visually displays the dramatic lopsided accountability of Christian nations: mostly those located in Europe plus the US and Canada.

Many Americans will react with dismay that Cole is setting the record straight.  But it is vital to point out that he condemns terrorism and war for empire of any sort.  He is simply pointing out that to think that Christianity and Christian nations are more virtuous and less blood thirsty than followers of Islam is statistically incorrect.  As Cole concludes in his commentary on relative blood lust in the name of a divine force or nationhood,

Terrorism is a tactic of extremists within each religion, and within secular religions of Marxism or nationalism. No religion, including Islam, preaches indiscriminate violence against innocents.


(Photo: Wikipedia)


povertyIn its metro section, The New York Times (NYT) revealed the growing yawning gap between the wealthy barons of the Big Apple and nearly half of the city's citizens, who are barely surviving.

The rise in New York City’s poverty rate as a result of the recession has apparently eased, but not before pushing nearly half of the city’s population into the ranks of the poor or near-poor in 2011, according to an analysis by the Bloomberg administration.

That year, according to the city’s measure, about 46 percent of New Yorkers were making less than 150 percent of the poverty threshold, a benchmark used to describe people who are not officially poor but who still struggle to get by. That represents a rise of more than three percentage points since 2009, when the nation’s recession officially ended.

Now, as the US has slowly climbed out of an economic collapse caused by the financial manipulations of a large segment of the one percent, the wealthy are increasing their control of US assets.  Meanwhile, the safety net for those in need is cut in the name of austerity.  That is why the NYT reports:

“Coinciding with the end of the slump in the job market is the end of the recession-related expansion of the safety net,” Dr. Levitan [director of poverty research for the Center for Economic Opportunity and author of the study] wrote, which could reduce food stamp benefits on top of cutbacks in unemployment insurance, tax credits and the payroll tax rate.

And the future is not bright for the New Yorkers who are the modern version of the Dickensian poor who walked like shadows amidst the rich who controlled the assets of the Britain at that dark time of the dawn of the industrial revolution:

More New Yorkers were poor in 2011 — 19.3 percent by the federal rate and 21.3 percent by the city’s standard — compared with 16.8 and 19.8 percent in 2007, before the recession. Still, while the city’s measure is the highest since it was first calculated in 2005, the official rate is lower in New York than in many other major cities.

While the center’s annual report, to be released this week, suggested that a better job market may have reversed the rising poverty in 2012, its outlook for this year and beyond was more problematic.

Of course, this doesn't include the working class or middle class who are just making it in the costly city of New York.

(Photo: HowardLake)

Reports of the Decline of the Religious Right are Premature
gaymar88Rocking and reeling from November’s election debacle, the Republican Party has been desperately trying to find its footing. A major goal – as stated in its post-election Growth and Opportunity Project report – has Party leadership looking to rebrand and re-market itself to younger people minorities and gays, an almost impossible task considering the power of its conservative Christian base. 
Despite its stated desire to reboot, the Republican National Committee came out of its April meet-up in Los Angeles affirming that it can not and will not be embracing change, at least as far as "The Gay" is concerned. 
According to ABC News, RNC members “voted unanimously to reaffirm the language in the GOP platform defining marriage ‘as the union of one man and one woman.’ The resolution went further, asking the U.S. Supreme Court to ‘uphold the sanctity of marriage in its rulings on Proposition 8 and the Federal Defense of Marriage Act.’”
Just prior to the LA meeting, the Family Research Council’s Tony Perkins issued the kind of warning that scares GOP/RNC officials. In his email newsletter, Perkins urged supporters to withhold financial donations from the Party until it rejects any compromises on traditional social values. 
Tony Perkins’ Washington Update, the daily online newsletter of the Family Research Council, the Republican National Committee pointed out before the Los Angeles confab that the RNC is “feeling [it] from social conservatives”: “After suggesting that a more gay-and abortion-friendly party might appeal to voters, the Republican National Committee is facing a revolt from one of the strongest blocs of its coalition. Together with 12 other conservative organizations, FRC made it quite clear what the RNC stood to lose by running left-of-center on issues like life and marriage. ‘We respectfully warn GOP leadership that an abandonment of its principles will necessarily result in the abandonment of our constituents to their support.’"
NBC news’ Michael O’Brien reported that “Thirteen social conservatives, representing various influential groups, wrote [RNC chair Reince] Priebus ahead of the RNC's [recent] quarterly meeting … in Los Angeles to sternly rebuke the conclusions of a post-election report that advised Republican elected officials to adopt a softer tone toward social issues.” 
(Photo: Philocretes)


                                                                                                                                   Harry Reid: Let the Minority Rule

harry444As Michael Collins writes about the failed legislative proposal to broaden background checks on gun buyers, you can put the blame at the feet of Harry Reid and other Dems who refused to break the back of frivolous filibusters at the beginning of this congressional session:

As majority leader, Reid set the rules of the Senate prior to this term, as he did prior to the last term.  He deliberately allowed the super majority requirement prior to any meaningful vote to stand and, as a result, preserved the threat of a filibuster.  Harry Reid bears the responsibility for the lack of a vote and passage of this legislation.  The 46 senators who voted with Reid against allowing a vote are almost all Republicans.  They were joined by the normal cast of atavistic Democrats  including Max Baucus, Democrat of Montana who also chairs the Senate Finance Committee.

(Reid's office indicated that he voted no for procedural reasons that would allow him to bring the legislation up again later, but as long as the filibuster threat exists on any law the GOP wants to sink it will not matter.)  As Collins adds, "Two other parts of the gun control passage fell after the background check fiasco.  Bans on assault weapons and high capacity magazines are finished."

Although the reporting on the amendment was confusing due to the threat of a filibuster issue, the gun state Idaho Statesman got it right:

Gun control advocates suffered a huge setback Wednesday as the Senate defeated a delicately crafted compromise strengthening background checks for gun buyers.

The 54-46 vote was six short of the 60 needed. While the vote can be reconsidered, the tally was a bitter reminder that even the most gentle of gun control measures faces a nearly impossible path winning congressional approval.

So because the Democrats were too wimpy to require a simple majority vote on most legislation, 60 is once again the new 50.  Given that small Republican states have equal senate representation to big Democratic states, this makes passage of many bills that the majority of the US population supports often impossible to achieve.  It's minority rule, and the Dems keep backing down on changing the filibuster rules.

(Photo: DonkeyHotey)

boat2"Only Little People Pay Taxes: Why a janitor ends up with a higher tax rate than a millionaire" is an article in Mother Jones Magazine that dispels a key myth about the rich and taxes:
The superrich don't pay as much as they used to—and thanks to a combination of tax cuts and preferential tax policies, their tax obligations can be less demanding than the so-called little people's. In fact, the very wealthiest Americans' tax burden has been steadily dropping for years, even as they've enjoyed astounding income growth not seen by the vast majority of Americans.
Tax rates for the wealthy have fallen substantially since they peaked in the 1940s. During the past 30 years, they have been cut at a much faster rate than middle- and low-income taxpayers'.
Remember that much of the money "earned" by the super rich is paid under along-term capital gains tax, which is considerably less than any high income tax bracket.  That's what made Mitt Romney's tax rate so low, along with offshore bank accounts and other tax evasion schemes that can be perfectly legal, as David Cay Johnston wrote about in a book of the same name: "Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else." 
And then you have regressive flat taxes such as sales taxes and Social Security (the latter of which is not even taxed above $113,7000 in income). 
In short, income tax is not reflective of the total percentage of taxation on the ultra rich as compared to the working class, due to flat taxes, tax breaks, and legal tax evasion (not to mention illegal tax evasion).
(Photo: Derjonas)
money1According to a study of US labor statistics featured on the AFL-CIO's Paywatch.org, US worker productivity has grown by 88% since 1982.  Yet wages, adjusted for cost of living, have pretty much stagnated – or in the case of displaced and threatened workers declined.
That increase in productivity by labor and technology has padded the pockets of the wealthy in increased profits.
Perhaps the most telling sign of the imbalance in workers struggling more to get by while their output has nearly doubled is the imbalance between CEO pay and that of the average employee.
According to an AFL-CIO study, a "U.S. CEOs of the largest companies made 354 times the average rank-and-file worker—by far the widest pay gap in the world."
(Photo: 401(K)2013)


austerityIt began before the Bush tax cuts for the top 1%, but it has accelerated exponentially since then: the top 1% keep accumulating more capital.   You could raise their taxes – let's pick a number out of a hat -- by 5%  (remember taxes are graduated and only increase for amounts above certain thresholds) and tax their capital gains and they would likely still be accumulating money at a faster rate.

They've crossed the threshold.

We ran across a column Mark Shields wrote on February 22 of 2001 about Bush's tax cuts that catapulted the national debt (in conjunction with the administration's wars) to the stratosphere and found his comments prescient, to say the least:

Now that President Bush's tax bill has been sent to Congress, at least two conclusions can be fairly drawn: 1) Bush is desperately seeking to close the widening and socially dangerous gap between the Rich and the Super-rich; 2) Class warfare is now over – the richest won.

Now, we have inherited that legacy of a soaring debt under Bush that the super-wealthy were glad to ignore in return for lavish and gluttonous tax cuts.  In part, the oligarchy that backed Bush – and of which his family has been a member of and upholder of enriching the already wealthy for decades – knew that the day would come when they could reduce Bush's debt on the backs of the working class.

That day has arrived and its slogan is "austerity."  Except what is implicit in that one word is that austerity for the middle class and poor will reduce the debt, while the stock market soars to new heights and the US plutocrats not only aren't subject to "austerity"; instead, they accumulate even greater assets and a higher percentage of the nation's wealth.

As Shields concluded in his 2001 column:

Just maybe Bush will find time to explain to that single mom of who he speaks – the one who earns $22,000 a year and has two children – just why the U.S. government cannot assure that her kids will learn in a safe…?

Or why there are almost no jobs in her neighborhood except for drug dealing, which can only exist if higher-ups are paid off – and why do the young men have no future as capitalists except for advancing in the ultimate entrepreneurial enterprise of the gang corporation. Or why the cops, the judges, the prison guards, the for-profit prison companies and the whole neo-plantation prison-industrial complex makes money off of incarcerating and branding as ex-cons a significant percentage of poor – and mostly black and Latino – men who can't find work for "illicit" drug violations. Or why poverty doesn't just still exist in Appalachia; it has accelerated. Or why formerly union workers are now wearing Walmart smocks and relying on Medicaid for insurance.

(Wikipedia 401(K)2013)

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