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Saturday, April 30, 2011

Could Not Have Said It Better!!

Op-Ed Contributor

The High Cost of Low Teacher Salaries

San Francisco

WHEN we don’t get the results we want in our military endeavors, we don’t blame the soldiers. We don’t say, “It’s these lazy soldiers and their bloated benefits plans! That’s why we haven’t done better in Afghanistan!” No, if the results aren’t there, we blame the planners. We blame the generals, the secretary of defense, the Joint Chiefs of Staff. No one contemplates blaming the men and women fighting every day in the trenches for little pay and scant recognition.

And yet in education we do just that. When we don’t like the way our students score on international standardized tests, we blame the teachers. When we don’t like the way particular schools perform, we blame the teachers and restrict their resources.

Compare this with our approach to our military: when results on the ground are not what we hoped, we think of ways to better support soldiers. We try to give them better tools, better weapons, better protection, better training. And when recruiting is down, we offer incentives.

We have a rare chance now, with many teachers near retirement, to prove we’re serious about education. The first step is to make the teaching profession more attractive to college graduates. This will take some doing.

At the moment, the average teacher’s pay is on par with that of a toll taker or bartender. Teachers make 14 percent less than professionals in other occupations that require similar levels of education. In real terms, teachers’ salaries have declined for 30 years. The average starting salary is $39,000; the average ending salary — after 25 years in the profession — is $67,000. This prices teachers out of home ownership in 32 metropolitan areas, and makes raising a family on one salary near impossible.

So how do teachers cope? Sixty-two percent work outside the classroom to make ends meet. For Erik Benner, an award-winning history teacher in Keller, Tex., money has been a constant struggle. He has two children, and for 15 years has been unable to support them on his salary. Every weekday, he goes directly from Trinity Springs Middle School to drive a forklift at Floor and Décor. He works until 11 every night, then gets up and starts all over again. Does this look like “A Plan,” either on the state or federal level?

We’ve been working with public school teachers for 10 years; every spring, we see many of the best teachers leave the profession. They’re mowed down by the long hours, low pay, the lack of support and respect.

Imagine a novice teacher, thrown into an urban school, told to teach five classes a day, with up to 40 students each. At the year’s end, if test scores haven’t risen enough, he or she is called a bad teacher. For college graduates who have other options, this kind of pressure, for such low pay, doesn’t make much sense. So every year 20 percent of teachers in urban districts quit. Nationwide, 46 percent of teachers quit before their fifth year. The turnover costs the United States $7.34 billion yearly. The effect within schools — especially those in urban communities where turnover is highest — is devastating.

But we can reverse course. In the next 10 years, over half of the nation’s nearly 3.2 million public school teachers will become eligible for retirement. Who will replace them? How do we attract and keep the best minds in the profession?

People talk about accountability, measurements, tenure, test scores and pay for performance. These questions are worthy of debate, but are secondary to recruiting and training teachers and treating them fairly. There is no silver bullet that will fix every last school in America, but until we solve the problem of teacher turnover, we don’t have a chance.

Can we do better? Can we generate “A Plan”? Of course.

The consulting firm McKinsey recently examined how we might attract and retain a talented teaching force. The study compared the treatment of teachers here and in the three countries that perform best on standardized tests: Finland, Singapore and South Korea.

Turns out these countries have an entirely different approach to the profession. First, the governments in these countries recruit top graduates to the profession. (We don’t.) In Finland and Singapore they pay for training. (We don’t.) In terms of purchasing power, South Korea pays teachers on average 250 percent of what we do.

And most of all, they trust their teachers. They are rightly seen as the solution, not the problem, and when improvement is needed, the school receives support and development, not punishment. Accordingly, turnover in these countries is startlingly low: In South Korea, it’s 1 percent per year. In Finland, it’s 2 percent. In Singapore, 3 percent.

McKinsey polled 900 top-tier American college students and found that 68 percent would consider teaching if salaries started at $65,000 and rose to a minimum of $150,000. Could we do this? If we’re committed to “winning the future,” we should. If any administration is capable of tackling this, it’s the current one. President Obama and Education Secretary Arne Duncan understand the centrality of teachers and have said that improving our education system begins and ends with great teachers. But world-class education costs money.

For those who say, “How do we pay for this?” — well, how are we paying for three concurrent wars? How did we pay for the interstate highway system? Or the bailout of the savings and loans in 1989 and that of the investment banks in 2008? How did we pay for the equally ambitious project of sending Americans to the moon? We had the vision and we had the will and we found a way.

Dave Eggers and Nínive Clements Calegari are founders of the 826 National tutoring centers and producers of the documentary “American Teacher.”

A Really Good Idea

Fix Congress First

The 2012 presidential race is heating up, and big donors are pulling out their checkbooks. President Obama—who recently reaffirmed his promise to "change how things get done in Washington"—just asked his top fundraisers to bring in $350,000 each for his reelection campaign. His 2012 bid is expected to cost more than $1 billion—35% more than his campaign in 2008.

The GOP is firing back. Sarah Palin raised $3.5 million in 2010, Mitt Romney raised $1.9 million in the first quarter of 2011, and the RNC raised $5.2 million in February alone.

Buddy Roemer

No high profile candidate is talking about reform. Instead, both sides are building networks of anonymous donors—most of them wealthy special interests—to fuel their campaigns. Because of Citizens United, these groups can spend unlimited amounts on political communications. 2012 will be the most expensive election in history by far.

We want the candidates to start talking about money in politics. Here's one way to do it. Buddy Roemer, former governor of Louisiana, recently announced his candidacy for president. He refuses to take PAC money to fund his campaign. He's pledged not to accept contributions over $100, and all contributions will be fully disclosed. Corruption is his central issue.

Next week, there will be a presidential forum in South Carolina, and we want Buddy Roemer to be part of the debate. The debate commission, run by Fox News, is undecided about allowing him to participate. We need your help to convince them. Call the debate commission at 1-888-369-4762 and tell them you want Buddy Roemer to participate.

To be included, Roemer also needs to pay a $25,000 entrance fee. He needs to raise $25,000 by the end of the weekend. If you can, please click here to make a contribution (but not more than $100).

We don't endorse Roemer's candidacy, but we're excited to see a credible candidate who's trying to make corruption a central issue. Some of you might be unhappy that we're calling attention to a particular candidate. We want to hear what you have to say—so if you feel strongly, we invite you to visit our Rootstrikers community and post your thoughts. With your help, we can grow a conversation around these issues and continue to work together towards reform.


Joey Mornin
Fix Congress First

Visit the FixCongressFirst blog at

Another Mystery Solved

I have wondered why Warren Buffett would invest $5 Billion in Goldman Sachs in September, 2008. Goldman was teetering on the edge of bankruptcy and Hank Paulson was scrambling to find a way to save them. It made no sense to invest in a company that might be bankrupt in a matter of days or weeks.

Now, Business Week explains it all this week. "Third, the $700 Trillion worth of derivatives that ignited the recession are not covered by Dodd-Frank. Warren Buffett successfully lobbied for their exclusion, saying it would be tantamount to rewriting old contracts and would force healthy derivative players such as his own Berkshire Hathaway to post collateral on old deals."

And there you have it. Warren had to keep Goldman alive to keep his own house of bad derivatives from crumbling around his head.

Turns of out that nice old man from Omaha is just as selfish and crooked a player as the rest of the Wall Street crooks.

At least the mystery is solved.

Friday, April 29, 2011

What You Should Know About Paul Ryan

When Paul Ryan graduated from college, he went to Washington as a Congressional Intern. Then he went to the staff of Senator Bob Kasten, and then to the staff of Senator Sam Brownback. Next, he became a speech writer for Jack Kemp.

In 1998, he got elected to Congress where he been ever since.

The point is that he has never had a private sector job in his Entire Life. He has spent every year since his graduation from college on a government payroll.*

He now has an income and pension for life, and both are much more generous than anything you are likely to ever have for your self.

This is the guy who wants to cut taxes on the richest Americans, never mind the fact that those people already control 45% of all the wealth in the country. Never mind that we have tried the Laffer Curve twice already and it was a complete failure both times. Bush's tax cuts were the last effort and the direct result is the current deficit.

This is the guy wants to end Medicare and give seniors a voucher for $2,000 to buy health care, never mind that companies now pay $5,000 to $10,000 annually to provide medical care insurance for their employees.

This guy is basing his Path to Prosperity on achieving a 2.3% unemployment rate, never mind we have never reached that level of unemployment in the history of this country.

Paul Ryan's Path to Prosperity is a road map for the destruction of the United States of America! Paul Ryan doesn't seem to know any more about how the U.S. economy works than Obama does!

*P.S. There is some story that he drove the Oscar Meyer Wiener Mobile one summer while he was in college.

Is really guy you want in charge of the future of the country?

Just as bad, is this the guy who is the intellectual leader of the Republican Party?

But to give him his due;
*He is always well dressed.
*He always has a good haircut.
*He always seems to be polite.

It looks to me like what we have here is a perfectly empty suit.

So Obama Thinks The Economy Is Getting Better?

Last week, McDonald's announced they would hire 50,000 new employees.

One Million (1,000,000) people applied for one of those jobs!

Larry Summers thinks all those million people are lazy and they must be applying because their unemployment benefits have run out.

Joe Stiglitz thinks all those million people are incompetent because they got laid off before.

It seems nobody in Washington cares that 15 Million Americans are still unemployed, or that another 15 Million are underemployed (as in working short hours or flipping burgers with a PhD).

Mickey D ended up hiring 62,000 new employees.

So Mickey D hired 6.2% of the applicants.

To put that in perspective, consider this;

Stanford University admitted 7.1% of the applicants this year.
MIT admitted 10%.
Princeton admitted 8.4%.
Columbia admitted 10%.

Which means you would have a better chance of getting admitted to the best universities in the country than you would have getting a job at McDonald's!!

Monday, April 25, 2011

Sometimes You Ge Lucky!

I have talked about the inherent nuttiness of Obama's High Speed Rail Project in the past. Here is a brief review of why it was all wrong.

1) We do not have cities close to each other like they do in Europe. The only corridor that might make sense is Boston to Washington, but there are so many engineering and political problems that it will never get built.
2) The cost/benefit analyses of every route are deeply flawed. The Los Angeles to San Francisco would most likely cost DOUBLE the present estimate and to break even it would require everyone now flying to take the train. All BS of the first order.
3) The government would be in charge of running the trains, and you have seen how well, and how profitably, AMTRAK runs the existing railroads.

In an utterly bizarre act, Obama has said he wants 80% of all Americans to have access to high speed rail. He must have absolutely no idea of how the population of the U.S. is located. And while he wants to spend BILLIONS on high speed rail, he won't spend any money on the Interstate Highway system which people really use, and like, and is falling apart.

You look at his proposals and all you can do is shake your head, and agree with Mitt that Obama really does not know how the country works.

So here is the good news. Congress, in a fit of pique, a return to sanity, in a budget cutting deal (take your choice) has defunded High Speed Rail. For what ever reason, three cheers for Congress!

Now here is the even better news. A British company is running very comfortable, well equipped BUSES on point to point routes. The company is called Stagecoach Group and the operating companies are called Megabus and Coach USA. For example, they run direct routes from Chicago to seven other mid-Western cities. They also have "hubs" in New York, Philadelphia and Washington. And they are expanding throughout the U.S. as fast as they can get buses and train new employees.

You buy your ticket online and board the bus from a curbside location marked only by a modest sign. And every bus has wifi service. Further, the cost is about $.08 a mile compared with about $.38 a mile for AMTRAK.

And here is the best part. They are doing it all without a single cent of government subsidy!

I can only wish that Obama would get his butt out of Air Force One and see how real Americans who are not millionaires actually live and work.

Sunday, April 24, 2011

Finally!! An Explanation!!

The one thing that has truly, and deeply, puzzled me is why Obama endlessly plays kissy face with Wall Street Bankers. He knows we know the crooked bastards have wiped out $14 TRILLION OF OUR MONEY!! He should have been pounded on the Wall Street Bankers with both fists.

99 1/2% of all Americans would have cheered him on. If he had sent one single Wall Street Banker to jail, he would have assured his re-election

Well, the answer to that question showed up in a single paragraph in this week's Business Week. Here it is:

"Another money-raising swing is planned for April 27 in the New York area, a trip that will include another $38,500 per-person event, this time at the home of Jon Corzine, the former Goldman Sachs CEO and New Jersey governor. The fund raising effort will be the first test of whether Wall Street donors will be as generous as they were in 2008, when Obama received more money from employees of the securities and investment sector than from those of ANY other industry, according to the Center for Responsive Politics."

Just two examples; Goldman Sachs $994,795 and Citigroup $701,290.

So there you have it. The Grand Unified Explanation of Everything in Washington, Money talks, bullshit walks.

Kiss this country good-bye.

Saturday, April 23, 2011

Here is a Republican you should read!!

April 23, 2011

The Bipartisan March to Fiscal Madness

Greenwich, Conn.

IT is obvious that the nation’s desperate fiscal condition requires higher taxes on the middle class, not just the richest 2 percent. Likewise, entitlement reform requires means-testing the giant Social Security and Medicare programs, not merely squeezing the far smaller safety net in areas like Medicaid and food stamps.

Unfortunately, in proposing tax increases only for the very rich, President Obama has denied the first of these fiscal truths, while Representative Paul D. Ryan, the chairman of the House Budget Committee, has contradicted the second by putting the entire burden of entitlement reform on the poor. The resulting squabble is not only deepening the fiscal stalemate, but also bringing us dangerously close to class war.

This lamentable prospect is deeply grounded in the policy-driven transformation of the economy during recent decades that has shifted income and wealth to the top of the economic ladder. While not the stated objective of policy, this reverse Robin Hood outcome cannot be gainsaid: the share of wealth held by the top 1 percent of households has risen to 35 percent from 21 percent since 1979, while their share of income has more than doubled to around 20 percent.

The culprit here was the combination of ultralow rates of interest at the Federal Reserve and ultralow rates of taxation on capital gains. The former destroyed the nation’s capital markets, fueling huge growth in household and business debt, serial asset bubbles and endless leveraged speculation in equities, commodities, currencies and other assets.

At the same time, the nearly untaxed windfall gains accrued to pure financial speculators, not the backyard inventors envisioned by the Republican-inspired capital-gains tax revolution of 1978. And they happened in an environment of essentially zero inflation, the opposite of the double-digit inflation that justified a lower tax rate on capital gains back then — but which is now simply an obsolete tax subsidy to the rich.

In attacking the Bush tax cuts for the top 2 percent of taxpayers, the president is only incidentally addressing the deficit. The larger purpose is to assure the vast bulk of Americans left behind that they will be spared higher taxes — even though entitlements make a tax increase unavoidable. Mr. Obama is thus playing the class-war card more aggressively than any Democrat since Franklin D. Roosevelt — surpassing Harry S. Truman or John F. Kennedy when they attacked big business or Lyndon B. Johnson or Jimmy Carter when they posed as champions of the little guy.

On the other side, Representative Ryan fails to recognize that we are not in an era of old-time enterprise capitalism in which the gospel of low tax rates and incentives to create wealth might have had relevance. A quasi-bankrupt nation saddled with rampant casino capitalism on Wall Street and a disemboweled, offshored economy on Main Street requires practical and equitable ways to pay its bills.

Ingratiating himself with the neo-cons, Mr. Ryan has put the $700 billion defense and security budget off limits; and caving to pusillanimous Republican politicians, he also exempts $17 trillion of Social Security and Medicare spending over the next decade. What is left, then, is $7 trillion in baseline spending for Medicaid and the social safety net — to which Mr. Ryan applies a meat cleaver, reducing outlays by $1.5 trillion, or 20 percent.

Trapped between the religion of low taxes and the reality of huge deficits, the Ryan plan appears to be an attack on the poor in order to coddle the rich. To the Democrats’ invitation to class war, the Republicans have seemingly sent an R.S.V.P.

Washington’s feckless drift into class war is based on the illusion that we have endless time to put our fiscal house in order. This has instilled a terrible budgetary habit whereby politicians continuously duck concrete but politically painful near-term savings in favor of gimmicks like freezes, caps and block grants that push purely paper cuts into the distant, foggy future. Mr. Ryan’s plan gets to a balanced budget in the fiscal afterlife (i.e., the 2030s); the White House’s tactic of accumulating small-fry deficit cuts over the enormous span of 12 years amounts to the same dodge.

Such fiscal jabberwocky ignores the fact that we have experienced a recession every five years or so for the last six decades; that the budget is now exposed to even more frequent and amplified cyclical turbulence amid the aftershocks of the financial crisis; and that the United States does not have a divine right to issue any amount of interim debt that suits the ideological convenience of the two parties.

Nevertheless, the Democrats are immobilized because Keynesians insist on kicking the budgetary can down the road until cyclical “demand” has in their estimation fully recovered, while Republicans sit on their hands because supply-siders insist on letting the deficit fester until tax cuts work their alleged revenue magic.

A generation ago, such spurious ideological conceits would never have taken root, because deficits had adverse consequences like rising interest rates or an outflow of monetary reserves.

But for decades now, the central banks of the world have been giving policymakers a false signal that sovereign debt is cheap and limitless. Functioning like monetary roach motels, central banks have become a place where Treasury bonds go in but never come out — thereby causing bond prices to be far higher and interest yields much lower than would obtain in a market that wasn’t rigged.

Indeed, the Fed and currency-pegging central banks in East Asia and the Persian Gulf have absorbed nearly all of Uncle Sam’s multitrillion-dollar spree of debt issuance. Moreover, about $4.6 trillion, or more than half of all debt held by the public, is now sequestered in central banks — paid for with printing-press money.

Even central banks cannot defy the canons of sound finance indefinitely, however. Japan will buy less Treasury paper as it turns inward to recover from the wrath of nature. Likewise, China will drastically curtail its currency pegging and related Treasury bond purchases in order to suppress the rip-roaring imported inflation and speculative bubbles now engulfing its domestic economy. And unless the Fed wants to ruin the value of the dollar, it will need to keep its promise to get out of the bond-buying business, too, when its second round of quantitative easing ends in June.

With the central banks no longer ready to buy, the Treasury market will once again be driven by real investors — many of them likely to demand higher interest rates owing to the heightened fiscal risks recently highlighted by Standard & Poor’s. Ominously, the biggest and baddest of these real investors, the quarter-trillion-dollar Pimco Total Return Fund, has already thrown down the gauntlet by selling Uncle Sam’s paper short.

INTEREST rates have been falling for 30 years, but Pimco’s short call could well mark a generational reversal. If so, rates will continue to rise, and the fiscal time frame will be abruptly foreshortened from the distant foggy future to the Treasury’s borrowing needs in the here and now. Then the abject deficiencies of the dueling budget plans will be self-evident.

By 2014, for example, the Ryan plan does not save a dime from the $2.2 trillion baseline for Social Security, Medicare and national security spending. Then it extends all the Bush tax cuts at a cost of $350 billion while instructing the states to reduce spending for the poor by $100 billion and the Congress to slice domestic discretionary spending by 25 percent. That toxic brew is likely to find few takers — even at a Mad Hatter’s tea party.

The latest iteration of the Obama plan is little better. By 2014, it would generate $70 billion from taxing the rich and perhaps $30 billion from the president’s belated call to re-examine our over-financed military but virtually nothing from freezes on domestic programs or from Medicare reimbursement reforms.

So the Ryan plan worsens our trillion-dollar structural deficit and the Obama plan amounts to small potatoes, at best. Worse, we are about to descend into class war because the Obama plan picks on the rich when it should be pushing tax increases for all, while the Ryan plan attacks the poor when it should be addressing middle-class entitlements and defense.

In the real world, however, the global bond market is already rumbling — and around the corner, a fiscal conflagration surely lies.

David A. Stockman, a former Republican representative from Michigan, was the director of the Office of Management and Budget from 1981 to 1985.

Friday, April 22, 2011

The End of America? This is truly Scary stuff!

This movie will remind you of how many outrageous atrocities were done against the Constitution of the United States of America by George W. Bush, et al. I remember most of them, but they seemed isolated at the time. But Naomi Klein compresses that time frame and it gets truly scary! At the times, the Dixie Chicks and Dan Rather and Bill Keller seemed like separate events, but they weren't..

Remember; everyone of Bush's "laws" are still on the books.

A confession: After fifty years as a loyal, registered, voting Republican, I quit the party when Bush said it was O.K. to torture anyone, because that is not who we are.

This takes about an hour so make sure you glass is full before you start.*xJmx*PTEzMDM1NTgxNDgxNTYmcHQ9MTMwMzU1ODE1ODIwMyZwPTEwNjExOTImZD1mLTU1Ni1*aGVfZW5kX29mX2EmZz*xJm89/OWFlOTc3ZDI*ZjRiNDRlYmEzNzE1ZjEzZGY1ODZjZjEmb2Y9MA==.gif" />" type="application/x-shockwave-flash" id="f-556">" />" target="_blank">Watch more free documentaries

A thought for today

When I get really discouraged about the way things are going in this country, which is now, I take some comfort in Winston Churchill's observation;

"Democracy is the worst form of government.................

Except for all the others."

Matt Taibbi Nails Paul Ryan! Enjoy the truth.

Tax Cuts for the Rich on the Backs of the Middle Class; or, Paul Ryan Has Balls

House Budget Chairman Paul Ryan holds a copy of his budget proposal "The Path to Prosperity" during a news conference on April 5, 2011.
Bill Clark/Roll Call

Paul Ryan, the Republican Party’s latest entrant in the seemingly endless series of young, prickish, over-coiffed, anal-retentive deficit Robespierres they’ve sent to the political center stage in the last decade or so, has come out with his new budget plan. All of these smug little jerks look alike to me – from Ralph Reed to Eric Cantor to Jeb Hensarling to Rand Paul and now to Ryan, they all look like overgrown kids who got nipple-twisted in the halls in high school, worked as Applebee’s shift managers in college, and are now taking revenge on the world as grownups by defunding hospice care and student loans and Sesame Street. They all look like they sleep with their ties on, and keep their feet in dress socks when doing their bi-monthly duty with their wives.

Every few years or so, the Republicans trot out one of these little whippersnappers, who offer proposals to hack away at the federal budget. Each successive whippersnapper inevitably tries, rhetorically, to out-mean the previous one, and their proposals are inevitably couched as the boldest and most ambitious deficit-reduction plans ever seen. Each time, we are told that these plans mark the end of the budgetary reign of terror long ago imposed by the entitlement system begun by FDR and furthered by LBJ.

Never mind that each time the Republicans actually come into power, federal deficit spending explodes and these whippersnappers somehow never get around to touching Social Security, Medicare or Medicaid. The key is that for the many years before that moment of truth, before these buffoons actually get a chance to put their money where their lipless little mouths are, they will stomp their feet and scream about how entitlements are bringing us to the edge of apocalypse.

The reason for this is always the same: the Republicans, quite smartly, recognize that there is great political hay to be made in the appearance of deficit reduction, and that white middle class voters will respond with overwhelming enthusiasm to any call for reductions in the “welfare state,” a term which said voters will instantly associate with black welfare moms and Mexicans sneaking over the border to visit American emergency rooms.

The problem, of course, is that to actually make significant cuts in what is left of the “welfare state,” one has to cut Medicare and Medicaid, programs overwhelmingly patronized by white people, and particularly white seniors. So when the time comes to actually pull the trigger on the proposed reductions, the whippersnappers are quietly removed from the stage and life goes on as usual, i.e. with massive deficit spending on defense, upper-class tax cuts, bailouts, corporate subsidies, and big handouts to Pharma and the insurance industries.

This is a political game that gets played out in the media over and over again, and everyone in Washington knows how it works. Which is why it’s nauseating (but not surprising) to see so many commentators falling over themselves with praise for Ryan’s “bold” budget proposal, which is supposedly a ballsy piece of politics because it proposes backdoor cuts in Medicare and Medicaid by redounding their appropriations to the states and to block grants. Ryan is being praised for thusly taking on seniors, a traditionally untouchable political demographic . Here is how old friend David Brooks, taking a break from his authorship of breathless master-race treatises, put it in a recent column called “Moment of Truth”:

Over the past few weeks, a number of groups, including the ex-chairmen of the Council of Economic Advisers and 64 prominent budget experts, have issued letters arguing that the debt situation is so dire that doing nothing is not a survivable option. What they lacked was courageous political leadership — a powerful elected official willing to issue a proposal, willing to take a stand, willing to face the political perils.

The country lacked that leadership until today. Today, Paul Ryan, the Republican chairman of the House Budget Committee, is scheduled to release the most comprehensive and most courageous budget reform proposal any of us have seen in our lifetimes…

Brooks sums up the Ryan proposals this way:

The Ryan budget will put all future arguments in the proper context: The current welfare state is simply unsustainable and anybody who is serious, on left or right, has to have a new vision of the social contract. The initial coverage will talk about Ryan’s top number — the cuts of more than $4 trillion over the next decade. But the important thing is the way Ryan would reform programs…

Brooks then goes on to slobber over all of Ryan’s ostensibly daring proposals, from the Medicare block grants to the more obnoxious Medicare voucher program (replacing Medicare benefits with vouchers to buy overpriced private insurance, which Brooks calls the government “giving you a sum of money” to choose from “a regulated menu of insurance options”).

What he doesn’t mention is that Ryan’s proposal also includes dropping the top tax rate for rich people from 35 percent to 25 percent. All by itself, that one change means that the government would be collecting over $4 trillion less over the next ten years.

Since Brooks himself is talking about Ryan’s plan cutting $4 trillion over the next ten years (some say that number is higher), what we’re really talking about here is an ambitious program to cut taxes for people like… well, people like me and David Brooks, and paying for it by “consolidating job-training programs” and forcing old people to accept reduced Medicare benefits.

We are in the middle of a major national disagreement over budget priorities, and that debate is going to turn into a full-scale cultural shooting war once the 2012 presidential election season comes around. It is obvious that we have a debt problem in this country and that something needs to be done about it. But a huge part of the blame for the confusion and the national angst over our budget issues has to be laid at the feet of media assholes like Brooks, who continually misrepresent what is actually happening with national spending.

The last ten years or so have seen the government send massive amounts of money to people in the top tax brackets, mainly through two methods: huge tax cuts, and financial bailouts. The government has spent trillions of our national treasure bailing out Wall Street, which has resulted directly in enormous, record profit numbers – nearly $100 billion in the last three years (and that doesn’t even count the tens of billions more in inflated compensation and bonuses that came more or less directly from government aid). Add to that the $700 billion or so the Obama tax cuts added to the national debt over the next two years, and we’re looking at a trillion dollars of lost revenue in just a few years.

You push a policy like that in the middle of a shaky economy, of course we’re going to have debt problems. But the issue is being presented as if the debt comes entirely from growth in entitlement spending. It’s bad enough that middle-class taxpayers have been forced in the last few years to subsidize the vacations and beach houses of the idiots who caused the financial crisis, and it’s doubly insulting that they’re now being blamed for the budget mess.

But the icing on the cake comes when a guy like David Brooks – like me a coddled, overcompensated media yuppie whose idea of sacrifice is raking one’s own leaves – comes out and calls Paul Ryan courageous for having the guts to ask seniors to cut back on their health care in order to pay for our tax breaks.

The absurd thing is that Ryan’s act isn’t even politically courageous. It’s canny calculation, but courage it is not. It would be courageous if Ryan were, say, the president of the United States, and leaning on that budget with his full might. But Ryan is proposing a budget he knows would have no chance of passing in the Senate. He is simply playing out a part, a non-candidate for the presidency pushing a rhetorical flank for an out-of-power party leading into a presidential campaign year. If the budget is a hit with the public, the 2012 Republican candidate can run on it. If it isn’t, the Republican candidate can triangulate Ryan’s ass back into the obscurity from whence it came, and be done with him.

No matter what, Ryan’s gambit, ultimately, is all about trying to get middle-class voters to swallow paying for tax cuts for rich people. It takes chutzpah to try such a thing, but having a lot of balls is not the same as having courage.

Thursday, April 21, 2011

It Seems Most of the Country Agrees With Me!

Nation’s Mood at Lowest Level in Two Years, Poll Shows

Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession, according to the latest New York Times/CBS News poll.

Amid rising gas prices, stubborn unemployment and a cacophonous debate in Washington over the federal government’s ability to meet its future obligations, the poll presents stark evidence that the slow, if unsteady, gains in public confidence earlier this year that a recovery was under way are now all but gone.

Capturing what appears to be an abrupt change in attitude, the survey shows that the number of Americans who think the economy is getting worse has jumped 13 percentage points in just one month. Though there have been encouraging signs of renewed growth since last fall, many economists are having second thoughts, warning that the pace of expansion might not be fast enough to create significant numbers of new jobs.

The dour public mood is dragging down ratings for both parties in Congress and for President Obama, the poll found.

After the first 100 days of divided government, and a new Republican leadership controlling the House of Representatives, 75 percent of respondents disapproved of the way Congress is handling its job.

Disapproval of Mr. Obama’s handling of the economy has never been broader — at 57 percent of Americans — a warning sign as he begins to set his sights on re-election in 2012. And a similar percentage disapprove of how Mr. Obama is handling the federal budget deficit, though more disapprove of the way Republicans in Congress are.

Still, for all the talk from Congressional Republicans and Mr. Obama of cutting the deficit as a way to improve the economy, only 29 percent of respondents said it would create more jobs. Twenty-seven percent said it would have no effect on the employment outlook, and 29 percent said it would cost jobs.

When it comes to cutting the deficit and the costs of the nation’s costliest entitlement programs, the poll found conflicting and sometimes contradictory views, with hints of encouragement and peril for both parties.

Mr. Obama has considerable support for his proposal to end tax cuts for those households earning $250,000 a year and more: 72 percent of respondents approved of doing so as a way to address the deficit.

And, in what he can take as a positive sign for his argument the nation has a duty to protect its most vulnerable citizens, about three-quarters of Americans polled think the federal government has a responsibility to provide health care for the elderly, and 56 percent believe it has a similar duty to the poor.

“Keep people’s taxes and give them medical benefits,” Richard Sterling, an independent voter of Naugatuck, Conn., said in a follow-up interview.

In what Republicans can take as a positive sign as they seek a more limited government, 55 percent of poll respondents said they would rather have fewer services from a smaller government than more services from a bigger one, as opposed to 33 percent who said the opposite, a continuation of a trend in Times/CBS polls.

And slightly more Americans approve than disapprove of a proposal by Representative Paul D. Ryan of Wisconsin to change Medicare from a program that pays doctors and hospitals directly for treating older people to one in which the government helps such patients pay for private plans, though that support derived more from Republicans and independents. A recent Washington Post/ABC News poll that found 65 percent opposed Mr. Ryan’s plan, suggesting results can vary based on how the question is asked.

Twice as many respondents said they would prefer cuts in spending on federal programs that benefit people like them as said they would favor a rise in taxes to pay for such programs.

Yet more than 6 in 10 of those surveyed said they believed Medicare was worth the costs. And when asked specifically about Medicare, respondents said they would rather see higher taxes than see a reduction in its available medical services if they had to choose between the two.

Given the choice of cutting military, Social Security or Medicare spending as a way to reduce the overall budget, 45 percent chose military cuts, compared with those to Social Security (17 percent) or Medicare (21 percent.)

The opposition by Tea Party supporters to raising the level of debt the nation can legally carry was shared by nearly two-thirds of poll respondents, including nearly half of Democrats; administration officials say blocking the government from raising that limit could force it to default on its debt payments.

For the most part, Americans split sharply along party lines when it comes to whom they trust most on the deficit, Medicare and Social Security.

But with 70 percent of poll respondents saying that the country was heading in the wrong direction, the public was not exhibiting warm feelings toward officeholders of either party.

Most Americans think neither Mr. Obama nor the Congressional Republicans share their priorities for the country. Mr. Obama’s job approval remains below a majority, with 46 percent saying they approve of his performance in office, while 45 percent do not. And support for his handling of the military campaign in Libya has fallen since last month: 39 percent approve and 45 percent disapprove. In a CBS poll in March, 50 percent approved and 29 percent disapproved.

Republicans have their own challenges. More than half of poll respondents, 56 percent, said they did not have a favorable view of the party, as opposed to 37 percent who said they did. (The Democratic Party fared somewhat better: 49 percent did not have favorable views of it and 44 percent did).

As the House speaker, Representative John A. Boehner of Ohio, becomes the face of his party in Congress, more disapprove of his job performance (41 percent), than approve of it (32 percent); 27 percent said they did not have an opinion of him.

The displeasure with officeholders of both parties is reminiscent of the mood that prevailed in November, when anti-incumbent sentiment swept Democrats out of power in the House and diminished their edge in the Senate.

Frustration with the pace of economic growth has grown since, with 28 percent of respondents in a New York Times/CBS poll in late October saying the economy was getting worse, and 39 percent saying so in the latest poll. “They’re saying it will get better, but it’s not,” Frank Tufenkdjian, a Republican of Bayville, N.Y., said in a follow-up interview. “I know so many people who are unemployed and can’t find a job.”

The nationwide telephone survey was conducted Friday through Wednesday with 1,224 adults and has a margin of sampling error of plus or minus three percentage points.

Check out the rest of the story at The New York

A Serious Problem With The Two Tier Economic System

If you have been reading this rant, you know that our increasingly two tier economy is a fact and is supported by a wide variety of actual measurements. This "problem" is getting increasing attention. Joe Stiglitz, the Nobel prize winner who thinks if you are unemployed it is because you are incompetent, has written a long piece about it.

I say "problem" because there are those who do not think it is a problem. It is simply the system working the way it is supposed to work and that those who are getting rich deserve their rewards.

So there are a whole lot arguments about the effects of the the two tier system that hinge on fairness, morality, etc.

However, there is one very real argument that hinges on hard edged economics. So let me explain.

We now have had unemployment that is setting records for its length and severity.

Small businesses are the largest source of jobs in our economy, by far. (67%)

Small businesses are not hiring because they do not have the sales to support new employees.

Small businesses do not have the necessary sales because there is not enough "earned" income flowing through the economy because 15 million are unemployed and another 15 million are under employed.

Now you can use whatever cutting points you like, but let's just take 10% and 45% to make the point. So if 10% of Americans take in 45% of the income (wealth) of the country, that leaves 55% for the rest of us.

There is no question that the rest of us spend all of the income we get, less a modest amount for savings. So our 55% is available to small businesses, and to large ones as well. All of our portion of the wealth goes back into the economic system to support it.

But the problem is that the 10% who get 45% of the income do not put their share back into the economy. There is lots of research to support that fact. Paul Allen may actually have two 727 jets, but not many people need two jets, or two yachts, etc.

What seems to happen is that they take the part of the 45% they cannot spend and invest it. Now that wouldn't be bad in they invested it in the U.S. However, the evidence strongly suggests they invest it overseas. Better opportunities? Easier to evade income taxes? Who knows?

But if you want numbers, look at the number of U.S. citizens with bank accounts in the Cayman Islands. And sooner or later, we will get to see the list of our citizens who had secret bank accounts in Switzerland.

So the point here is that our growing two tier economic system is taking money out of our economic system, which could be used to create sales for small businesses, and moving it out of the country.

And the faster the two tier system grows, the weaker our economy gets. The weaker the economy gets, the fewer new jobs that are created. The less tax revenue is generated is then another byproduct of the two tier system.

So you can argue about the morality of the two tier system all you want. But the hard facts are that the two tier system is weakening (destroying?) our economy. And that ain't a good thing.

Another Worrisome Trend

The rapidly growing two tier U.S. economy where the rich get an increasing share of the wealth of the country has a real and worrisome trend. It is eroding support for our basic economic system.

In 2002, 80% of all Americans thought capitalism was the best form of government.
In 2010, 59% of all Americans thought capitalism was the best form of government.

And this trend was particularly pronounced among Americans earning less than $20,000. It as 76% in 2002 and now it is only 44%.

The message is that more and more Americans no longer believe the economic system offers them anything of value. That should worry everyone.

P.S. To put all of this in perspective (sort of), 68% of all Chinese think capitalism is the best form of government.

Wednesday, April 20, 2011

Support Builds For A Business Tax Cut

That is the headline from today's Los Angeles Times. Here are the next three paragraphs.

"U.S. corporations have enjoyed a two-year bull run on Wall Street. They are sitting on a record amount of cash and are back to paying bonuses that are the envy of executives around the world.

And the icing on the cake for many of them might be just around the corner: a tax cut that has bipartisan support in Congress.

As part of their budget plan passed last week, House Republicans want to cut the corporate tax rate to 25% from 35%. The Obama administration and many Democrats also are looking to slice the current rate, but not as much."

If you needed any more evidence that Congress is insane, here it is.

First, 67% of all U.S. corporations pay NO income taxes. 35%X$0=$0 and 25%X$0=$0

In 1952, corporations paid 33% of all federal taxes. Last year, they paid 8.9%!!!!

Last year;

Hewlett Packard paid 20.2%

Apple paid 24%.

Google paid 21%.

And, of course, General Electric paid ZERO ($0)

So how did we get into this absurd situation? The Answer is simple: Special Interests!!

Special interests have created almost endless deductions and exceptions, all designed to reduce the tax bill.

Who but an INSANE congress could consider cutting business taxes even further just as we are approaching a debt ceiling?

Oh, I forgot. That would be the same Congress that continued the Bush tax cuts on the Richest Americans.