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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

The demand economy has collapsed for the vast majority of Americans. Jobs have been lost, wages have stagnated and the buying power of all but the wealthy dramatically reduced.

But if you are super-rich, according to an August 4 New York Times article, you "are (almost) spending like it's 2006: luxury goods are flying off the shelves, even with the economy staggering."

If you want to walk in the shoes of the ultra-wealthy, it will cost you a few weeks' wages (if you are lucky enough to have a job). According to The Times, "In 2008, for example, the most expensive Louboutin item that Saks sold was a $1,575 pair of suede boots. Now, it is a $2,495 pair of suede boots that are thigh-high."

While most of America struggles with the basic costs of living, even delaying medical care because of high health insurance deductibles (for those who have medical insurance), the rich are on a luxury item buying rampage. According to the Times:

Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering - they are zooming. Many high-end businesses are even able to mark up, rather than discount, items to attract customers who equate quality with price....

The luxury category has posted 10 consecutive months of sales increases compared with the year earlier, even as overall consumer spending on categories like furniture and electronics has been tepid, according to the research service MasterCard Advisors SpendingPulse. In July, the luxury segment had an 11.6 percent increase, the biggest monthly gain in more than a year.

With the ongoing DC subsidies of the most affluent Americans through tax cuts, America has moved closer to the class and income gaps that characterize third-world nations.

To paraphrase an old Nancy Sinatra song, "These $2,495 boots are made for walking, and one of these days these boots are going to walk all over you."

They already are.

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Published in EditorBlog

 

MARK KARLIN, EDITOR FOR BUZZFLASH AT TRUTHOUT

Why don't corporations pay much higher taxes until they produce jobs in America?

After all, workers don't get paid until after they complete their jobs every couple of weeks or so. That's the way companies compensate employees.

So, why not wait to tax corporations at a lower rate until they prove that they are "job creators" in the United States - not overseas?

And every year, the businesses would have to prove that they haven't moved jobs to lower-wage nations, otherwise their taxes will zoom up again.

What Ronald Reagan said about the Soviet Union - "Trust but verify" - should be applied to American business, because they have gotten rock-bottom tax breaks and loopholes - but they mostly use them to increase their profit by employing sweat-shop labor in other nations. As trickle-down economics has played itself out over the last few decades, it has shown that lower taxes for the rich and corporations lead to a very large net loss of jobs in the United States, not an increase.

So, a BuzzFlash at Truthout reader suggested a simple solution. Raise corporate taxes high up, and apply a descending adjustment downward if a business creates jobs in America or doesn't fire employees and move jobs overseas.

Like workers, corporations should only be compensated when they get the job done, which is the job of creating work here in America, not in some far-away lands.

 

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They set the standard & we get poor.

That's the takeaway from the recent Standard & Poor's downgrading of America's credit rating.

After all, despite the ongoing collapse of the Wall Street/global corporation trickle-down theory, we are facing a job crisis which almost every well-known player in DC - except Jeremiahs and Cassandras such as Bernie Sanders and Nancy Pelosi - virtually ignores. Even the White House gives only lip service to job creation, while accepting the basic frame of the Republican obsession with debt reduction.

How extreme a threat are we facing to the continued coring out of our economy except for paper financial wealth and the expansion of global companies overseas? Well, Eric Cantor - the majority leader and the most prominent Tea Party voice in Congress - is opposed to extending federal unemployment insurance because it would be "pumping up" the unemployed. That is his position despite the collapse of a demand economy in the US - and the fact that each dollar paid out in employment "generates two dollars of economic growth."

Yes, there are all sorts of things wrong with this first-time-ever downgrading of the US's ability to repay debts. Firstly, as financial analyst Naomi Prins bluntly points out, "S&P's downgrade carries a large dose of irony, since the extra debt the U.S. has piled on recently came courtesy of S&P's moronic toxic asset ratings."

All the major credit rating companies - and that includes Standard & Poor's - according to the movie "Inside Edition," were complicit in allowing Wall Street to sink the American economy by overvaluing the economic stability of banks "too big to fail."

And then there's the interesting twist that the credit rating decrease was done in part because Congress (i.e. the Republicans) wouldn't agree to additional revenues. As Thom Hartmann asks on Truthout,

Have you seen, anywhere, in any media, or even heard reported or repeated on NPR, the following sentence? "We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act."

It's right there on Page 4 of the official Standard & Poors "Research Update" - the actual report on what they did and why - published on August 5th as the explanation for why they believe Congress - and even the Gang of Twelve - will be unable to actually deal with the US debt crisis.

Ironically, and to the detriment of the nation's fiscal well-being, Standard & Poor's was curiously low-key about warnings when Congress extended Bush's tax cuts for the rich. And it misled investors by giving solid ratings to corporate economic bombs like Enron.

The one thing that the Standard & Poor's downgrade does indicate is that the US economy is in a heap of trouble, which Standard & Poor's and other major analysts helped create.

And what is slip-sliding away beneath the political positioning in DC on the deficit - and the downgrading itself - is that no economy can be strong without an economic engine that creates an infrastructure of jobs for its citizens.

Without consumers able to purchase goods and services, the nation is left with just a shell of an economy - and a small class of citizens who profit off of the nation's economic decline. Standard and Poor's is among that list.

Meanwhile, financial rating agencies set the rating standards for "creditworthiness," and the rest of us get poor.

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Published in EditorBlog

MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

If corporations are so great, why do you spend half your life on hold?

O.K., so you try and call your health insurance company to find out if a certain medical procedure is covered under your plan. After being forced to listen to nine options, you press customer service and a recorded voice tells you that due to the company "experiencing excessive call volume," you will need to wait to speak to an "available agent."

When someone finally answers, they have a foreign accent - as you know from past calls, the customer service benefits department has been offshored - and after you ask your question, you are asked if you mind being put on hold while the representative consults his or her manager. After several minutes, the customer service agent - who is paid a subsistence wage - removes the hold and asks if this is a pre-existing condition. You point out that since you've had the policy for two years, the pre-existing condition restriction no longer applies.

The benefits representative in a distant land responds that he or she needs to again consult with the manager and you are put on hold.

When you again hear a voice, you are told that the diagnostic testing is covered, but that you have a $4,500 deductible, so the insurance won't be paying for it. You are then asked if you need any further help.

Then you call your bank that is "too big to fail" about a discrepancy in your monthly statement and are put through a loop of recorded questions and answers that don't resolve your problem, but it doesn't matter much because when you press a number that you thought would lead you to a real person, you are somehow disconnected.

Next, you call the electric utility to tell them that a tree just fell on your house power line and the house is without electricity in 98 degree heat, and after being on hold for 20 minutes, someone comes on the phone and asks if the line is sparking or setting anything on fire. You answer no, not that you can see, and then get told that since it is not an emergency, no one can come out for a few days because there aren't enough line men or women at this time to handle other than live "hot" wire repairs.

And then you call the liquor store to see if they deliver - and they answer right away, and you order a bottle of gin.

Two weeks later, you get a letter from your health insurance company informing you that although you called a benefits consultant you failed to call the department that does prior authorization and, therefore, your claim is denied and it won't even go toward your deductible.

You call the liquor store and order another bottle of gin, and are mystified at how corporations are held up as models of customer service and efficiency while the government is constantly disparaged.

And then you take another sip of gin because the liquor store is about the only business that delivers what you want.

Published in EditorBlog

MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

The world power companies are winning.

Let's imagine a company, say a global corporation like Wal-Mart.

Let's suppose that this behemoth retailer sells - among other consumer goods manufactured outside of the US - shirts made in China to unemployed textile workers in North Carolina whose factories were closed and whose jobs were moved overseas. After all, they can only afford to shop at this retailer because the prices are cheap, even though they are committing self-cannibalization by buying goods that they used to get paid to make, but now are made in foreign lands at great profit to the retailer.

Let's suppose that this retailer - again like Wal-Mart - has been showing flat sales at its stores open more than one year in America (the financial measurement of success for retailers) because consumer demand has stagnated due to unemployment and low wages. As a result, this global colossus of wealth accelerates its opening of stores around the world, where there is more opportunity for increasing sales and profits. It sees its future not in the United States, but abroad.

Let's suppose that this retailer pays minimum wage and relies on government subsidies for Medicaid for its workers in some states and even food stamps and other federal and state programs. Let's say this company also gets tax breaks and other incentives from local governments to open stores, at the taxpayer's expense.

Let's suppose that this corporation is among the wealthiest in the world, but employs a team of union busters to ensure that many of its employees are paid the lowest possible legal wages in the United States.

Let's suppose that the family that owns this retailer - again like Wal-Mart - benefits from tax cuts for the rich that could significantly help balance the budget - and the members of this family are among the wealthiest in the world.

Let's suppose that, due to campaign contributions to politicians and to its own virtual state department to nations such as China and India, this corporation's loyalties are to its own enrichment and not to the best interests of the United States or its workers.

Let's suppose that this company is not like Wal-Mart, but is Wal-Mart.

Because it is.

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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

Republicans can't stop feasting on pork, even as they denounce it.

Last week, BuzzFlash at Truthout asked the question, "Why is GOP hypocrisy so brazen and audacious?"

We focused on freshman Illinois Tea Party Congressman Joe Walsh, who voted no on the debt ceiling/deficit reduction bill on Monday. Walsh, a favorite of cable TV, said he was opposing the bill in order to save a future for his children and grandchildren - and only more drastic deficit reduction would do that and show fiscal responsibility. Walsh, however, was revealed last week to be a deadbeat dad to the tune of owing more than $100,000 in child support to his ex-wife.

But there are a myriad of GOP hypocrisies, whether having to do with lapsed moral values (e.g. David Vitter paying for prostitutes, or John Ensign having an adulterous affair with his top aide's wife and then paying him off to hush it up) or financial improprieties (Ensign qualifies for a twofer in these two areas). And many, many more.

Which brings us to virtually the entire Republican delegation in Congress decrying pork (earmarks) as not being kosher for fiscal accountability, while indulging in bringing home the bacon to their districts or states (as Sarah Palin tried to do as governor with her "bridge to nowhere," among other federal projects).

The New York Times ran an editorial on Monday exposing just a few examples of GOP hypocrisy on pork:

The road to Washington is paved with broken campaign promises. But few are so rich in hypocrisy as those of House Republican freshmen caught engineering hometown pork even as they vow to slash the federal budget for the supposed good of the nation....

Representative Tim Scott, a Tea Party favorite from South Carolina, helped secure the down payment on a $300 million harbor dredging project back home. Not at all pork, said Mr. Scott, pronouncing the dredging a matter of the national interest. In the case of a new bridge in Wisconsin, Representative Sean Duffy reasons it's no earmark since the legislation listed no specific costs.

Representative Michele Bachmann, Minnesota's three-term incumbent and presidential aspirant, also supports the bridge - and calls for a "redefinition" of what an earmark is. "There's a big difference between funding a teapot museum and a bridge over a vital waterway," is Ms. Bachmann's head-scratching guidance.

No, it's not "head-scratching." It's just being fundamentally dishonest, annoyingly self-righteous and profoundly hypocritical, yet again.

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Recently, BuzzFlash at Truthout talked about how Republican Congressional "deficit reduction" and tax cuts for the rich and corporations don't help and even hurt small businesses in America, because the actual policies facilitate large companies in crushing small business competitors.  But another reason the GOP claim to tax cuts for the wealthy is dishonest in that most small businesses bring home less that $250,000 a year.  That means if the US reinstated the taxes for the rich from the Bush administration, small businesses would not be affected, but our national defiicit would decrease  -- and perhaps some funds could be allocated to really help small businesses. That is because President Obama wants to keep the tax cuts for those households making less than $250,000 a year, but raise them for wealthier households.

The New York Review of Books recently noted, "But relatively few small business owners earn $250,000—in fact, fewer than 3 percent of the 20 million people who file business income on their personal tax forms (the 1040s) earn that much."

As Elizabeth Drew -- seasoned Washington DC analyst (formerly for the New Yorker) -- writes in the New York Review, the Republicans have controlled the debate on "debt reduction" by continuing to move the goal posts, as the White House then gives up more yardage.  But facts cannot be argued, as in the case of small businesses, in reality, getting the short end of the stick from the GOP.  As Drew observes:

The antitax dogma of the Republican Party is strongly rooted in mythology. The theory that tax cuts create jobs has been discredited by the results of George Bush’s tax policies. The Republicans cling to the myth that “small business” owners are the “job creators,” and so they oppose proposals to eliminate the Bush rate cuts for even those earning over $250,000. But relatively few small business owners earn $250,000—in fact, fewer than 3 percent of the 20 million people who file business income on their personal tax forms (the 1040s) earn that much.

In fact, to repeat, the GOP Congressional policy hurts small businesses -- as they are shrinking in America -- by facilitating the growth of mega-corporations that drive small stores and manufacturers out of business.  That turns the Republican Party into a job killer.

Published in EditorBlog

MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

For many years, BuzzFlash offered a GOP hypocrite of the week award.

The problem was not in finding someone who fit the "honor," it was selecting one from a teeming cauldron of candidates.

In some ways, hypocrisy is a built-in component of being an inflexible Republican, since a major part of the party is known for its pronounced moral scolding and inflexible stances allegedly based on "principle."

Human nature being what it is, an abundance of Republicans are revealed to be hypocrites on everything from monogamy to feeding themselves at the public trough.

In the debt ceiling political spectacle, a freshman GOP Congressman from Illinois, Joe Walsh, has been a leader of the hard-line "fiscal responsibility" Tea Party faction.

But the hypocritical skeletons are coming out of Congressman Walsh's closet, according to the Chicago Sun-Times:

Freshman U.S. Rep. Joe Walsh, a tax-bashing Tea Party champion who sharply lectures President Barack Obama and other Democrats on fiscal responsibility, owes more than $100,000 in child support to his ex-wife and three children, according to documents his ex-wife filed in their divorce case in December.

"I won't place one more dollar of debt upon the backs of my kids and grandkids unless we structurally reform the way this town spends money!" Walsh says directly into the camera in his viral video lecturing Obama on the need to get the nation's finances in order.

Walsh's wife is not a happy camper with his hypocrisy: "In 2004, Laura Walsh complained in a motion that despite her ex-husband's claims of poverty, he took a vacation to Mexico with his girlfriend and another to Italy."

The details get more sordid as you read the Sun-Times article:

In addition to the foreclosure on his condominium, Walsh was haunted during his campaign by disclosures of liens on his property from unpaid bills and staffers abandoning his campaign, saying he wasn't paying them.

Keith Liscio, who said Walsh hired him to be campaign manager - Walsh disputes that - has sued Walsh for $20,000 in salary he said Walsh owes him. Both sides are trying to settle that case.

Staffers learned during the campaign that Walsh was driving on a suspended license. His license was suspended twice in 2008 for his failure to appear in court, and he was cited in 2009 for driving on a suspended license, according to the Illinois Secretary of State.

Another noteworthy point is that it appears Walsh's current Congressional salary, $175,000 per year (along with tremendous benefits), is the highest he has been paid in years. He is prospering off taxpayer dollars.

As we wrote the GOP hypocrite of the week articles for many years, we would wonder: Are these con men (and the vast majority were men) or just people with profound psychological repression?

Either way, America loses as we get a daily dose of duplicity instead of public policy that can advance the nation.

Published in EditorBlog

MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

UPDATE: Since this commentary was written in the early afternoon of July 27th, Think Progress has confirmed that President Obama was negotiating a gradual increase of the eligibility age for Medicare to 67. As Think Progress reported:

Jacob Hacker, political science professor at Yale University, has called the scheme "the single worst idea for Medicare reform" since it "saves Medicare money only by shifting the cost burden onto older Americans caught between the old eligibility age and the new, as well as onto the employers and states that help fund their benefits." Worse still, some seniors between the ages of 65 and 67 could "end up uninsured," the Center on Budget And Policy Priorities' Edwin Park predicted. Individuals "with incomes too high for premium subsidies in the exchange and those who qualify for only modest subsidies" could be priced out of affordable coverage, he warned.

According to the Kaiser Family Foundation, raising the eligibility age to 67 would cause an estimated net increase of $5.6 billion in out-of-pocket health insurance costs for beneficiaries who would have been otherwise covered by Medicare. Seniors in Medicare Part B would also face a 3 percent premium increase, the study found, since younger and healthier enrollees would be routed out of Medicare and into private insurance. Beneficiaries in health care reform's exchanges would see a similar spike in premiums with the addition of the older population. Federal cost savings, meanwhile, would be slim.

Meanwhile, Think Progress also revisited how Timothy Geithner had warned Obama against negotiating on the debt ceiling because it would likely lead to a quagmire.  Obama ignored his advice.

President Obama's view of himself as a consumate behind closed doors negotiator with Republican leaders may be due to hubris, but is certainly not effective; in fact, he generally ends up as the guy at the poker table who started with the biggest stake, but ends up with no chips left to play.

Yes, polls show Democrats, in general, would vote for him again, but it may be due more to a fear that he is the only thing between America and the cult of barbarians at the gate than due to his weak leadership and feckless negotiations.

OBAMA'S OBSESSION WITH COMPROMISE HAS COMPROMISED HIS PRESIDENCY

Regardless of the current political theater taking place over the debt ceiling, what drives much of the right wing - in terms of symbols - is the iconic image of the lone male (usually with a gun) who doesn't flinch from a fight, when his integrity and justice are at stake.

Let's call this "The John Wayne Syndrome."

Ronald Reagan, a Hollywood colleague and buddy of Wayne, was the epitome of this - in large part because he could act the role so well.

This brings us to the issue of form vs. content in the Obama presidency. Obama has positioned himself as a mediator between the Democrats and the Republicans, not as an unwavering leader for a specific agenda or vision. Since his presidency began, he has been primarily on the defensive, caught on the Republican side of the football field with has back to the goal line.

This is where his emphasis on "compromise" may have compromised his presidency. The Republicans, in general, value strength in politics over concession. They tend to look at a man who is frequently backing away from his positions, whatever his lofty rhetoric, as weak and as someone who can be pushed around.

The intangible in all this is that, while most Americans want the "gridlock to break in DC," it hasn't broken. Despite polling that shows Obama is perceived a bit better on the debt ceiling issue than the Republicans, he is starting to lose advance polls against some GOP candidates for the next election.

What Obama may not understand is that most Americans want strong leadership standing up to bullies and thugs, as Gary Cooper did as the sheriff in "High Noon" (popular culture drives our image making, after all). They didn't elect a mediator in 2008; they elected a leader who would break the DC logjam not by showing weakness, but by showing resolve and an ability to forcefully exercise the power of the presidency.

Republican political leaders are jackals at sensing weakness in opponents. In the end, President Obama's insistence on pleading with the GOP to accept legislation that is similar to what they originally proposed as a first-step debt reduction target is a sign of a failed strategy and risk aversion, not strength.

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Published in EditorBlog

MARK KARLIN FOR BUZZFLASH AT TRUTHOUT

Ignorance isn't bliss, or so we are learning as political discourse based on misinformation plays itself out in the corporate mass media and the halls of Congress.

As the narrator/director of the cult classic documentary, "Orwell Rolls in His Grave," asks: "Could a media system, controlled by a few global corporations with the ability to overwhelm all competing voices, be able to turn lies into truth?"

Published in EditorBlog
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