Obama "soaking the rich": taking whining to new heights

Kevin Drum makes a point that should be obvious: the tax increases for all but the wealthiest of te wealthy don't even remotely qualify as “soaking the rich.” That is, purely and simply, a characterization made in bad faith – in other word, a flat-out bald-faced lie, which is all Republicans do nowadays.

According to one expert, a family with taxable income of $500,000 – that would most likely be a gross income before deductions and adjustments well north of $600,000 a year – will see its tax exposure move up from about $120,000 to $132,000. Assuming gross income is, in fact, $650,000, that means net income after taxes will drop from $530,000 to $518,000. We're talking about, what, about the top one-fourth of one per cent of the population? Remember, the increases will apply only to the income above the $250,000 level. The family with a taxable income of, say, $300,000 -- probably in excess of $400,000 gross income -- will see tax increases of probably about $1000 - $1500.

OK, what about the poor millionaire in annual income who, because his or her income is mostly above the $250,000 threshold will lose most of the benefits of the Bush tax reductions? That millionaire will probably have to pay somewhere between $25,000 and $30,000 more in taxes. If the gross income of that fortunate person is more like 1.3 million before adjustments and deductions, the net after taxes might drop from about $900,000 to about $870,000. OK, that's pretty Draconian, we can all agree, but somebody needs to sacrifice.

Cry me a river, or what?

Bush's Third Term II

Obama has now asked all of Bush's US Attorneys that still remain on the job (51) to stay on the job.

What is wrong with the man? These are the same guys that were appointed to chase Democrats off the face of the earth.

Time for revolution.

Bush's third term

Today the Bush Obama administration took the following steps:

1. The Justice Department upheld the Bush Administration's secrecy claims, rejected several Freedom of Information Act requests.

2. The Justice Department upheld the Bush Administration's decision to allow people to carry concealed weapons in the National Parks.

3. The Administration argued that the former president's views must be considered while asking Congress to delay or cancel plans to force Karl Rove to testify.

Maybe Michelle Bachman is correct (though for the wrong reasons) when she argues that we have lost our country.

The Science of Suboptimization, the Art of the Possible

On Jan. 29, the House passed a $819 stimulus plan without a single Republican vote. The Senate passed its own version that would cost $838 billion. However, the compromise slashed important provisions from the House version -- including the elimination of $16 billion in funds for new school construction -- while adding tax credits that skewed toward the wealthy. A Center for American Progress analysis found that it would have created 9 to 12 percent fewer jobs than the House plan, even while costing $16 billion more. The House and Senate ironed out differences in the bill to approve a $789 billion package. The bill followed remarkably closely to the broad outline that Obama had painted more than a month ago.

Obama stumped for the bill with the support of elegant progressives. "This is the most dangerous economic crisis since the Great Depression, and it could all too easily turn into a prolonged slump, The American economy is on the edge of catastrophe." Nobel-prize-winning economist Paul Krugman warned last month.

According to the Progressive (2/12/09), the compromise improves many aspects of the version passed in the Senate, particularly by expanding of "federal aid to an array of programs aimed at the poor and jobless, with billions of dollars for health care, unemployment insurance, food stamps and other programs." The bill extends federal unemployment benefits to 20 weeks, "with an additional 13 weeks for jobless in states with particularly high unemployment," and raises weekly payments by $25. After food stamp funding that passed the House was slashed in the Senate version, the compromise grants $20 billion in food stamp benefits. Nearly $46 billion will fund education and modernize schools, "considerably higher than the Senate's $39 billion total but far less than the House's $95 billion." The bill also allocates $30 billion for smart grid technology, advanced batteries, and energy efficiency measures, along with $5 billion for home weatherization and $4.5 billion to make federal buildings more energy efficient -- closer to the House version. The compromise also "drastically reduced" the Senate's $15,000 tax credit for new home buyers, "placing income limits on who could benefit and reducing the overall cost from $35 billion to about $5 billion." Krugman derided the tax credit as a "bonus to affluent people who flip their houses" and concluded that it would have "cost a lot of money while doing nothing to help the economy." The compromise "all but eliminated" a big business giveaway that would have allowed money-losing companies to claim an estimated $67.5 billion in tax refunds this year and next -- a tax cut with the least stimulative impact per dollar, according to the Congressional Budget Office.

The bill is an improvement over the Senate version, but it is too small and still includes non-stimulative tax breaks. The spending in the bill, the most stimulative component, fell from $604 billion as introduced in the House to only $513 billion in spending, with $276 billion in tax breaks. Some of these tax breaks, such as the credit for new home buyers, are particularly non-stimulative, the largest being the $70 billion tax break to spare millions of Americans from paying the alternative minimum tax. "It has nothing to do with stimulus or with recovery," said Sen. Tom Harkin (D-IA). I am not happy with it." The compromise slashes aid to states to $44 billion, from the House's $80 billion, With the massive budget shortfalls states are facing -- California alone faces a nearly $40 billion budget gap over the next two years -- the state aid will be unable to prevent severe cuts in state programs and will lead to cuts in jobs. Congressional Black Caucus leaders also objected to the elimination of $4.2 billion in neighborhood stabilization funding removed by the Senate and asked for funding to provide broadband Internet access to poor communities and to create more job training programs.

With politics the art of the possible and with a a talented, but fledgling President on his maiden legislative voyage across a vast fiscal and monetary expanse, the possible was likly to be disappointing at the outset and in the end.

Might as well have Bush back

Okay. I've been keeping my mouth shut for a long time. Partly because I wanted to hope against hope that Obama would actually bring change and partly because I'm catching up on a lot of things I let slip. But, I've had it. I'm fed up.

This is not change. This is more of the same. A bailout fund that's going to be run completely behind closed doors. A government that's going to hide behind state secrets claims. A government that pays attention only to the rich and famous. A government the hires the same crooks that got us into trouble in the first place. A government that listens only to Republicans. A government that is going to FAIL!

The new bailout plan is DOA at Congress -- take my word for it. It won't pass. Not even the next $350 billion in TARP money that's already been halfway approved will get through now. It was hard enough to get the watered down stimulus bill through (and it still may fail). And, meanwhile, the economy is not just going down, it's plummeting into a bottomless pit, while the creeps in Washington wring their hands about baseball players using steroids. If that's all people care about, this country deserves whatever it gets.

We lost 110-45, and it wasn't as close as that looks

We now have the January Bureau of Labor Statistics numbers. Of course, they will later be adjusted to be somewhat worse than these first reports, but basically the final verdict is in on employment during the George W. Bush years. It's much, much, much worse than the numbers reported. Needless to say, the incompetent mainstream press is incapable of reporting it.

The official unemployment rate jumped to 7.6 %. That's a jump of .4 percentage points since December. It's quite a bit higher than it was in January 2001, when Clinton left office, when it was 4.2%. Ho hum, just another “slowdown,” a fairly bad one, true, but that doesn't look too awful.

Can anyone dig into these numbers a bit to get the real truth? The real numbers that matter are the number of jobs as a proportion of the working age population. Even more trenchant is full-time employment. Since January 2001, the working age population grew 21 million. By modern historical standards, with an economy neither growing in real terms nor contracting, 13.5 million of that increase would have been employed, and 13.0 million would have had full-time jobs.

In fact, using the BLS's seasonally adjusted numbers, only 4.25 million of that 21 million increase found any jobs whatsoever. Almost 9 million who would have worked if jobs were plentiful have either been added to the ranks of the officially unemployed, or they have simply dropped out of the work force entirely. And get this: with a massive increase in the number of part-time jobs during that period, when the absolute number of full-time jobs should have increased by 13.0 million just to stay even with population growth, THE ABSOLUTE NUMBER OF FULL-TIME JOBS ACTUALLY DROPPED BY 300,000 IN BUSH'S 8 YEAR ADMINISTRATION.

Ponder that one for awhile, and you begin to get a grasp of how bad the employment situation left by George W. and the Republicans really is. In real terms, the American economy lost 13.3 million full-time jobs in that period. That's a total workforce contraction of 10%. On top of it, the retained wealth of most Americans who have any has dropped about 40-50% over the past year. That's fundamental, structural change. Those in Washington contentedly sucking on the public teat we provide for them – and that's pretty much everyone in Washington, whether they work directly for the government or not -- maybe don't quite get that. Yeah, they know things are not good “out there,” but they figure it's just another cyclical thing that “the market” will eventually correct, especially if we throw a few tax cuts to fuel it along.

By the way, those are the seasonally adjusted numbers. Since we are comparing the same single month in each period, perhaps the raw unadjusted numbers are equally or even more appropriate to use. Fine, but you might want to know first that the unadjusted numbers are even worse. OK, lags might matter, too, since no President cn be expected to work magic in the first few months in office at least. Trust me: the numbers change a bit, but the basic story remains the same.