Texas Governor Punches Government with One Hand and Takes from it with the Other

Even as he railed against the Recovery Act, Texas Gov. Rick Perry used the government's stimulus plan to cover 97 percent of the state's budget deficit in 2009:Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched."Stimulus was very helpful in getting them through the last few years," said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers.

Manufacturing Epilogue

From the DC Gang:

We are in long term decline now with little prospects for manufacturing or housing industry expansion. The latter was the only industry boomimg under W with a Fed promoting low interest rates and the belief that housing never declines. We now know otherwise. Now Republicans like Newt want to lower capital gains taxes to zero ( he truly said that) so the oligarchs will wind up paying no taxes. Most of the top 400 oligarchs pay taxes close to today's 15% capital gains rates. Our manufacturing base has been declining for the last 15 years with bad decisions made by both parties on free trade and globalization which benefitted the Wall St banks but has killed our manufacturing base.

While we know that in the last 15 years manufacturing has declined from 28% of our GDP to today's 10-11% , it is next to impossible to find more detailed statistics ( companies did not have to report this to the Commerce Dept) on the numbers of jobs loss in large company manufacturing by industry or in industries like pharmaceuticals where there have been no job ads for chemists in this industry in the last 5 years or so. For the drug industry they have all gone to India or China. Novartis says they can only hire in India now. The little purple pill Nexium formerly made by Astra Zenica (AZ) is now made in India by an Dr.Reddy for AZ to market and sell. How much does it cost to make a pill ... it really doesn't matter what drug.. about 10 cents a pill if you look at the $10 price of a 90 day supply from CVS or supermarket generics programs. So our drug industry is becoming a marketing and distribution industry. Our Business people go for high profit margins and cut costs but don't know how to compete ... they would have to know that messy business of technology and manufacturing.

The tax code is a proven method for influencing behavior so I support the comment below to "tax the products manufactured over there (there’s that 4 letter word ‘tax’ again) or subsidize American manufacturers (big government) to incentivize domestic production. With the current Republican Know -nothings" that won't be possible. Let's ask them for details as to how they intend to create jobs beyond their usual list of cut taxes, reduce regulations, more free trade and more globalization.

We are in for long term grid lock with our current polarized political system with its electoral system for electing the President and fillerbustering super majority rules in the Senate. The latter is akin to the " liberum veto" that destroyed Poland as a great power in the 1600 and 1700s. All it took to kill an action in the Polish Parliament was for one member to rise and say "I object" and that killed the proposal and Poland went down the drain to be divided up and ruled by Germany, Russia and Austria for 125 years. Maybe the current Tea Baggers will decide to let the US go bankrupt and we then will be bought by China and become a vassal state like Korea and Viet Nam were in the days of the Chinese Empire of the 1800s.

The U.S. Deficit in a Nutshell

Tax cuts : pink about 30% of deficit ( Bush)

Stimulus: blue about 5% ( Obama)

Two wars: green 10% ( Bush)

Debt without above 3 policies is 35% due to bailouts and reduction of revenues due to

1. Great Recession brought on by Republican deregulation policies.

2. Costly Expansion of Medicare ( part D) by W to include drugs run by for-profit insurers and not allowing government to negotiate drug prices as in Canada where brand drugs are half of price in USA.

Source: Washington Post http://www.washingtonpost.com/wp-srv/special/outlook/votes-that-pushed-us-into-the-red/

Dated Forecast on U.S. Manufacturing Proving Out

For over a half century, American manufacturing has dominated the globe. It turned the tide in World War ii and hastened the defeat of Nazi Germany; it subsequently helped rebuild Europe and Japan; it enabled the United States to outlast the Soviet empire in the Cold War. At the same time, it met all the material needs of the American people.

During this period, many American icons were born. Companies like General Motors, Ford, Boeing, Maytag and Levi Strauss became household names. American manufacturing became synonymous with quality and ingenuity. On the back of this industrial output rose America’s middle class. High-paying manufacturing jobs, in turn, helped spur a robust and growing economy that depended little on foreign nations for manufactured goods and armaments.

However, manufacturing as a share of the economy has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent, and in 2004, it accounted for just 9 percent. "There’s no point looking in the rear-view mirror.With alternatives like China, Mexico and now Central America, expecting U.S. industrial manufacturers to dominate in the decades to come is foolhardy” (Kassel, Daily News, New York, Aug. 9, 2005). Kassel also predicted that “in a decade Detroit is going to be a fraction of what it is today.”

Obamacare=Roadkill, therefore Obama = Roadkill

You can see where this is going.

The Jump Start for the Oligarchs in America's Coming Feudal Society

From the D.C. underground:
Beginning on this date, 30 years ago, Big Business and the Right Wing decided to "go for it" -- to see if they could actually destroy the middle class so that they could become richer themselves.
And they've succeeded.

On August 5, 1981, President Ronald Reagan fired every member of the air traffic controllers union (PATCO) who'd defied his order to return to work and declared their union illegal. They had been on strike for just two days. It was a bold and brash move. No one had ever tried it. What made it even bolder was that PATCO was one of only three unions that had endorsed Reagan for president! It sent a shock wave through workers across the country. If he would do this to the people who were with him, what would he do to us?

Reagan had been backed by Wall Street in his run for the White House and they, along with right-wing Christians, wanted to restructure America and turn back the tide that President Franklin D. Roosevelt started -- a tide that was intended to make life better for the average working person. The rich hated paying better wages and providing benefits. They hated paying taxes even more. And they despised unions. The right-wing Christians hated anything that sounded like socialism or holding out a helping hand to minorities or women.

Reagan promised to end all that. So when the air traffic controllers went on strike, he seized the moment. In getting rid of every single last one of them and outlawing their union, he sent a clear and strong message: The days of everyone having a comfortable middle class life were over. America, from now on, would be run this way:

* The super-rich will make more, much much more, and the rest of you will scramble for the crumbs that are left.

• Everyone must work! Mom, Dad, the teenagers in the house! Dad, you work a second job! Kids, here's your latch-key! Your parents might be home in time to put you to bed.


• 50 million of you must go without health insurance! And health insurance companies: you go ahead and decide who you want to help -- or not.


• Unions are evil! You will not belong to a union! You do not need an advocate! Shut up and get back to work! No, you can't leave now, we're not done. Your kids can make their own dinner.


• You want to go to college? No problem -- just sign here and be in hock to a bank for the next 20 years!


• What's "a raise"? Get back to work and shut up!

And so it went. But Reagan could not have pulled this off by himself in 1981. He had some big help:

The AFL-CIO.
The biggest organization of unions in America told its members to cross the picket lines of the air traffic controllers and go to work. And that's just what these union members did. Union pilots, flight attendants, delivery truck drivers, baggage handlers -- they all crossed the line and helped to break the strike. And union members of all stripes crossed the picket lines and continued to fly.
Reagan and Wall Street could not believe their eyes! Hundreds of thousands of working people and union members endorsing the firing of fellow union members. It was Christmas in August for Corporate America.

And that was the beginning of the end. Reagan and the Republicans knew they could get away with anything -- and they did. They slashed taxes on the rich. They made it harder for you to start a union at your workplace. They eliminated safety regulations on the job. They ignored the antitrust laws and allowed thousands of companies to merge or be bought out and closed down (including the banks that facilitated their reckless risk taking that brought on the "current recession" and the next recession). Corporations froze wages and threatened to move overseas if the workers didn't accept lower pay and less benefits. And when the workers agreed to work for less, they moved the jobs overseas anyway.

And at every step along the way, the majority of Americans went along with this. There was little opposition or fight-back. The "masses" did not rise up and protect their jobs, their homes, their schools (which used to be the best in the world). They just accepted their fate and took the beating.

I have often wondered what would have happened had we all just stopped flying, period, back in 1981. What if all the unions had said to Reagan, "Give those controllers their jobs back or we're shutting the country down!"? You know what would have happened. The corporate elite and their boy Reagan would have buckled.

But we didn't do it. And so, bit by bit, piece by piece, in the ensuing 30 years, those in power have destroyed the middle class of our country and, in turn, have wrecked the future for our young people. Wages have remained stagnant for 30 years. Take a look at the statistics and you can see that every decline we're now suffering with had its beginning in 1981 (here's a little scene to illustrate that from my last movie).

It all began on this day, 30 years ago. One of the darkest days in American history. And we let it happen to us. Yes, they had the money, and the media and the cops. But we had 200 million of us. Ever wonder what it would look like if 200 million got truly upset and wanted their country, their life, their job, their weekend, their time with their kids back?

Have we all just given up? What are we waiting for? Forget about the 20% who support the Tea Party -- we are the other 80%! This decline will only end when we demand it. And not through an online petition or a tweet. We are going to have to turn the TV and the computer and the video games off and get out in the streets (like they've done in Wisconsin). Some of you need to run for local office next year. We need to demand that the Democrats either get a spine and stop taking corporate money -- or step aside.

When is enough, enough? The middle class dream will not just magically reappear. Wall Street's plan is clear: America is to be a nation of Haves and Have Nothings. Is that OK for you?

Why not use today to pause and think about the little steps you can take to turn this around in your neighborhood, at your workplace, in your school? Is there any better day to start than today?

The Market

I used to believe the efficient markets hypothesis -- at least in its weak form. But, God knows what to make of today. Up nearly 200 points at the beginning, down 250 immediately after the Fed dropped the bucket, and now it closes up 430. If this were a car driver, he'd be arrested for driving under the influence.

Sign of the times

I happened to drive through Maplewood Village (NJ) today and saw a fairly large group of people gathered around a petition table in front of the post office where a large sign saying "Impeach Obama" was posted, together with a smaller sign saying "Bring back Glass-Steagall."

The whole thing seemed to be sponsored by Lyndon LaRouche, but what was surprising was how many people seemed to be signing the petition.

Obviously, impeachment is neither appropriate nor is it the solution to this problem, but I certainly can sympathize with the frustration that might lead people to sign this.

Frankly, I'm praying that the man resigns (or at least decides not to run in 2012).

Obama fiddles while Rome burns

I couldn't believe it today. While the entire economy is collapsing around him, Obama gets on TV and predicts that everything will be hunky dory because the Republicans are such good guys that they will soon reach agreement with him about what to do.

EVERYONE, and I mean EVERYONE (except Obama) knows that isn't going to happen. These thugs have seen that their tactics win, and they will continue to use them. The only way to fight them is to get tough, which Obama seems incapable of doing. Thank God we don't have the Russians or the Chinese threatening us while this guy is president.

Somehow, Obama reminds me of Herbert Hoover, and I think he will go down in history as just as bad.

Banksters

Don't know if you've heard the latest news, but the banksters (or at least Bank of New York) are now going to charge you interest if you leave large deposits of cash on their hands. No, I'm not kidding. They want you to pay them interest for the right to lend money to them!

Maybe we should demand that the banksters start paying us interest on the loans we owe them. Let's see what happens if I send Wells Fargo an invoice for $12,000 interest on the $120,000 balance remaining on my mortgage loan.

Obama stared into the eyes of history and chose to avert his gaze

If you haven't read this indictment of Obama in today's NY Times, do so. It's a must read, even if a bit long. Here's a sampling:

IN contrast, when faced with the greatest economic crisis, the greatest levels of economic inequality, and the greatest levels of corporate influence on politics since the Depression, Barack Obama stared into the eyes of history and chose to avert his gaze. Instead of indicting the people whose recklessness wrecked the economy, he put them in charge of it. He never explained that decision to the public — a failure in storytelling as extraordinary as the failure in judgment behind it. Had the president chosen to bend the arc of history, he would have told the public the story of the destruction wrought by the dismantling of the New Deal regulations that had protected them for more than half a century. He would have offered them a counternarrative of how to fix the problem other than the politics of appeasement, one that emphasized creating economic demand and consumer confidence by putting consumers back to work. He would have had to stare down those who had wrecked the economy, and he would have had to tolerate their hatred if not welcome it. But the arc of his temperament just didn’t bend that far.

S&P Downgrade of USA to AA+

The United States has maintained the highest credit rating for decades. S.& P. first designated it AAA in 1941, reflecting a steadfast belief that the richest nation in the world would not default on its debt payments. The rating was also bolstered by the role of the dollar as the world’s leading currency, ensuring that demand for American debt securities would remain strong in spite of burgeoning deficits.

Remember when Rumsfeld was denigrating Old Europe (France, Germany, Scandanavia, UK) all of which have AAA ratings.

“What’s changed is the political gridlock,” said David Beers, S.& P.’s global head of sovereign ratings, in an e-mail several days before a debt ceiling agreement was announced. “Even now, it’s an open question as to whether or when Congress and the administration can agree on fiscal measures that will stabilize the upward trajectory of the U.S. government debt burden.”

Experts say the fallout could be modest.

The federal government makes about $250 billion in interest payments a year, so even a small increase in the rates demanded by investors in United States debt could add tens of billions of dollars to those payments.

In addition, S.& P. may now move to downgrade other entities backed by the government, including Fannie Mae and Freddie Mac, the government-controlled mortgage companies, raising rates on home mortgage loans for borrowers.

Rationalizing Obama's Rope a Dope Tactics with Knockout Punch in Doubt

By David Corn, 8/2/11 in Mother Jones

Though critics deride his soft-on-Republican-extremism approach for letting the opposition set the terms of debate, White House officials maintain that it has worked for Obama on key fronts. He passed a stimulus bill (though not as large as many economists believed necessary), health care reform (though without a public option), and financial reform (though it may not have gone far enough)—all through inch-by-inch legislative warfare without major public confrontation. "He's always in search of a Republican friend," a past Obama aide notes. This never-ending outreach, his aides believe, is also vital for drawing fickle independent voters back in 2012. And clearly, Obama's bend-over-backward-and-then-some effort to reach a compromise on the debt deal was propelled by the White House's calculation that indies relish compromise over almost anything—whether or not it's a bad deal.

Obama's hesitation to pummel may dishearten some Democrats, but his aides—who challenge the media narrative that the president has alienated his base—contend that come 2012, when the choice is between the president and a tea partyized GOP, his supporters will be fully juiced. They point to polling data showing that Obama remains highly popular among self-identified liberals; unease, they insist, is mostly among what former White House press secretary Robert Gibbs once derided as the "professional left," a small number of bloggers and vocal activists. After the debt ceiling denouement—which has enraged liberals—these calculations may have to be revisited.

Yet, aside from appeasing put-up-your-dukes progressives, there can be immense value in a fight. A well-managed slugfest can be instructive, alerting voters to key facts and ideas. Had Obama gone after the GOPers early and often in the debt-ceiling showdown, perhaps the president could have shifted the overall political context and placed himself in a stronger negotiating position as he sought his much-cherished consensus. Instead, even as the country careened toward default in July, Obama praised House Speaker John Boehner's "good-faith efforts." ("He's a good man who wants to do right by the country.")

It's easy to second-guess a president. And this week is producing a flood of second-guessing. Obama and his aides are disdainful of the snap-judgment cable chatter. They know that while it's natural for progressives to crave a more confrontational approach, there's no way to prove consistent fisticuffs would yield better outcomes. And they believe that making what progress they can on the economy and other policy matters—rather than scoring points in pugilism—will probably help Obama most in 2012 (as well as serve the nation).

The debt-ceiling showdown has put Obama's operating assumptions to a serious test. "Sometimes, he can appear as weak and indecisive," a past aide says. "But he is a pragmatist. He believes you can't achieve universal health coverage, green energy, a clean environment, rebuild America—his fundamental beliefs—if the country isn't behind you. But in a profoundly polarized world, can this work?"

The Debt Ceiling Deal is a Trojan Horse

This Debt Ceiling deal disaster happened because the President did not evoke the 14th amendment in the face of terrorist tactics by the GOP. GOP contrived a crisis-classic (Chicken Little) scare tactics-and manipulated the Democrats accordingly. The deal will send the economy into a double dip recession and give budget power to a cabal of 12 in Congress with the delusion that an up or down vote will produce results remotely in line with the best interests of Americans. It will open the floodgates for severely cutting entitlement programs while the wealthy and corporations continue to circumvent taxes. It will mark the begining of the end of democracy in America and accelerate America's march to Banana Republic status engineered by the GOP. Options: revolution.