You Are All Suspects Now

I don't usually just give a link to another page without putting in my own two cents' worth, but John Pilger's very timely essay for Truthout does not require any further comment.  Read it here:

You Are All Suspects Now.  What Are You Going to Do About It?

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Is Europe wising up?

In the wake of the first round of French elections, people are beginning to pay more attention to the growing number of voices in Europe suggesting that German led "austerity for all" is not working. Europe as a whole has a 10.8% unemployment rate, and unemployment in countries like Greece and Spain are depression level. Italy and now France have joined the rolls of countries which must pay more interest on their sovereign debt.

Mario Monti, Christine LeGarde, and a great many European economists have been calling for pro-growth policies to offset the negative spiral created by austerity. Countries cannot balance their budgets when tax revenues are falling, and tax revenues won't increase until individuals and businesses are earning more. Businesses cannot grow without markets for their products, so even export driven Germany is in a slowdown.

Here in the United States, Republicans want us to do just what didn't work for Europe, but with one important difference: while European austerity programs include tax increases, Republicans want to cut taxes even more than they already have, with special emphasis on taxes for wealthy individuals and corporations. They maintain that such cuts will encourage the richest of the rich to invest more, thereby creating jobs, and expanding the economy. Yes, it's good old "trickle down" again.

American corporations are sitting on mountains of cash but not using it for job creation or business expansion — primarily because there is no demand for their products. The super-rich, who also have mountains of cash at their disposal, are back to gambling on derivatives, not entrepreneurship (unless you count financing superPACs as entrepreneurial activity.)

So how do the Republicans mean to balance the budget? By taking the food out of the mouths of hungry children, reducing senior health care benefits, and generally screwing everybody who depends in any way on government safety nets. There's a word for that.

Evil.

The Cartagena "Scandal"

I don't understand why soldiers patronizing prostitutes is so scandalous. Haven't soldiers always patronized prostitutes? Back in what many Republicans seem to regard as the "good old days" of the 19th century, prostitutes ("camp followers") followed armies around, presumably with the tacit or not so tacit approval of those armies' officers. I think the whole affair is even less scandalous because prostitution is both legal and acceptable in Cartagena. What's the big deal?

As for the Secret Service agents, let's face it — really they're nothing but paramilitaries in pinstripes, no matter how nobly they've been portrayed in the movies. Unless their escapades were being financed by the GAO, I don't see a real problem — assuming they got the job of preparing for the President's visit to the Summit of the Americas done before they began exploring the local culture.

As for the likes of Congressional "investigators" like Peter King and Darryl Issa, it's totally clear that their main goal is to make the "scandal" somehow rub off on the president. The real scandal at the Summit was the unsuccessful attempt by the United States to formally exclude Cuba from future meetings. We're ready to talk to the Taliban, but not to the Castros? (insert Bronx cheer)

The Buffett Rule

To nobody's surprise, the Buffett Rule — which would have imposed a 30% marginal tax rate on income over $1 million — failed to gain 60 votes in the Senate yesterday, and so did not come to the floor for debate. Given that the bill was nothing but political theater, and never could have cleared the House had it by some miracle passed the Senate, nobody much gives a damn.

Anyway, a 30% marginal tax rate on income over $1 million is entirely too low. Even during the first Reagan term, the rate was 50%, and in terms of garnering revenue, it was a step back from ending the Bush tax cuts for those earning over $250 thousand. If the Obama administration really wanted the very rich to pay their fair share, it would push for a return to taxing dividends and capital gains at the same rate as earned income. (Capping those rates at 15% was one of the contributions of the "liberal" Clinton administration.)

Recently, Simon Johnson and James Kwak suggested that all the Bush tax cuts be allowed to expire at the end of this year. I agree. Stopping new legislation, as the Republicans have demonstrated over and over, is a lot easier than getting anything positive done, and the tax cuts Bush provided to the middle class really are small enough to be negligible.

Nevertheless, absent some grand bargain, I think we can count on Congress to extend them all — perhaps even make them permanent. If Obama is serious about deficit reduction, and a bill like that reaches his desk, he'll veto it.

Short Subjects

The North Korean "threat"

So what if they have "the bomb?" The Great Leader Centennial Satellite Launch wound up, almost immediately, in a great many pieces. California is safe, and probably will remain safe until some Pakistani sells them a workable missile. Now that we've sort of been forced to agree to stop fucking over the Pakistanis, that's unlikely to happen. Come on — give North Korea the nutritional aid. Starving children are not building nuclear weapons.

Another Centennial

Well, the coincidence of the centennial of the birth of Kim Il Sung and the sinking of the Titanic is unlikely to have any cosmic significance. In my opinion, the James Cameron movie had the most poorly written dialogue of any movie (with the possible exception of "Godzilla vs. Mothra") ever produced. 3D will not improve that. Try to find the 1953 version, which (unwittingly) is a much better illustration of the class struggle.

"Never Worked a Day in Her Life"

Some mothers work hard at being full-time mothers. Other mothers do the whole mother thing and also hold down full-time jobs — usually because their families couldn't survive unless they did. Ann Romney had it easy, and Obama should have had the balls to point that out. The whole fucking "controversy" makes me feel ill.

Spain and Ireland

Austerity kills struggling economies. The Irish, at the moment, seem, at last, to be figuring that out — after being the "good children" of the Eurozone for too many years. It is to be hoped that the Spanish — trapped in a depression only exacerbated by forced austerity — figure that out sooner than the Irish did. Iceland, I believe, got it right: fuck the banks.

The Minimum Wage

According to yesterday's Times, there is some pressure building for an increase in the federal minimum wage. Yes, it makes for a nice election year issue; and yes, it stands no chance at all of passing in the House. As you would predict, the United States Chamber of Commerce says it would be a "job killer" in this time of economic weakness.

The Chamber, as usual, is lying. American productivity, at the moment, is the highest it's ever been — which is another way of saying that employers are squeezing as much work out of their employees as those employees conceivably can produce. If the employers want more work done, their only option is to hire more workers. It does not matter if they have to pay an extra two dollars an hour. If they need the work done, they'll hire workers to do it.

When the minimum wage is increased, all lower paid workers tend to earn higher salaries. Their buying power is increased, which creates more demand for goods and services. Business meets that demand by expanding, not by pulling back. Higher demand means more jobs, not fewer.

Might there be price increases due to higher labor costs? Possibly; or, profit margins might get smaller — and it's that second outcome that has the Chamber's knickers in a twist. What the business community (always) fails to see, though, is that smaller profit margins don't mean smaller profits if more product is being sold.

Also, as usual, the hue and cry is about the damage that would be done to "small businesses." Well, thanks to the new JOBS act, we finally know what a "small business" is — a business with revenues up to one billion dollars a year. I think they can survive; and if the local convenience store has to charge two-fifty for a can of Coke instead of two bucks, I think we all can survive that as well — especially if everybody is earning something closer to a living wage.

Sayonara Santrorum

It's possible that Rick Santorum gave up his presidential campaign because of the health crisis of his baby daughter. Whatever. I really can't believe in prayer, Rick, but I understand how a father feels when his little girl is in dire peril. I pray with you, Rick — despite the uselessness of my heathen prayers, and despite the fact that I think you're a total asshole — I hope your little girl will survive and thrive. It's not her fault that you're her father.

It's also possible that Rick Santorum left the Republican presidential campaign because the Party came down on him hard. Maybe he was offered a cabinet position — Secretary of Morality, perhaps — but I don't think so. I think he just ran out of money.

Whatever.

Romney still has to tack towards the center. Who the fuck cares? Obama has tacked so far to the so-called "center" that those of us on the "old" (New Deal) left have no real candidate. All we can do is pick the least offensive of the various piles of shit.

Still "Too Big to Fail"

The TBTF [Too Big To Fail] institutions that amplified and prolonged the recent financial crisis remain a hindrance to full economic recovery and to the very ideal of American capitalism. It is imperative that we end TBTF. In my view, downsizing the behemoths over time into institutions that can be prudently managed and regulated across borders is the appropriate policy response. Only then can the process of “creative destruction”— which America has perfected and practiced with such effectiveness that it led our country to unprecedented economic achievement— work its wonders in the financial sector, just as it does elsewhere in our economy. Only then will we have a financial system fit and proper for serving as the lubricant for an economy as dynamic as that of the United States.

Now that post-dot.com and post-Enron financial regulations have been rendered largely useless by passage of the so-called JOBS act, we really should see what we can do about salvaging what we can of Dodd-Frank before the Wall Street lobbyists decimate what little good it can do. As you may recall, its original intent was to end the threat of "too big to fail," but somehow the biggest banks remain TBTF and only continue to get larger.

Hence, it is interesting to note that the quotation above is from Richard W. Fischer, president of the Federal Reserve Bank of Dallas — considered among the most conservative of the Fed branches. It comes from his introduction to the Dallas Fed's 2011 annual report, most of which consists of an essay by Harvey Rosenblum entitled Choosing the Road to Prosperity: Why We Must End Too Big To Fail— Now.

Download it here. It's neither too long, nor too technical. It's definitely worth fifteen or twenty minutes of your time.

He signed it, of course.

Amazing how far an attractive acronym can get you.

Today, Our President signed into law the duplicitously named JOBS (Jump-start Our Business Start-ups) act, which has absolutely nothing to do with creating jobs, and everything to do with deregulating the financial sector. If it had been called the SOBS (Stimulate Our Business Start-ups) act, at least it would have presented an accurate portrayal of the political weasels of both parties who pushed it through.

So now, IPOs for "small" businesses (up to one billion dollars of revenues per year) are no longer required to even tell investors what the hell the business is for five years. We're back to where we were during the internet bubble, when investors poured money into duds like pets.com. Hmmm... maybe somebody could bring back pets.com. "PETS" could stand for "Pickpocket Every Thick-brained Sucker."

Last month, I offered instructions for how you could use the provisions of the JOBS act to rip off random strangers on the internet. Wall Street firms don't need instructions from me. Now, in the case of "small" businesses, they can go back to having their analysts puff up a stock offering their finance arm is selling.

CRAP (Capitalists Rape the American People)!