Calm Down, Wingnuts--No One Is Going to Confiscate Your Hardly Won Gains

Leave it to the people who write about how difficult it is for the mega-rich in this country to get through each day to find fault with a mega-rich Senator who realizes that the economic health of this country is actually tied to how fair our system is for everyone:

"Why Democrats Scare Me to Death"

Drama queen hysterics are hardly necessary. If those of us who proudly call ourselves Democrats scare you to death, you should put on a fedora and go live in Switzerland.

VARNEY: If this kind of help goes through, then a poor and moderate income people will indeed get help with their home heating. They'll get help with rent. They'll get help with their healthcare. They'll get help with their food through food stamps. I mean, if you put it altogether, are you comfortable with the kind of redistribution and the level of income transfer that will represent? are you comfortable with that?

SEN. KERRY: No, and I'm equally uncomfortable with the income transfer that's taken place in the last 15 years in America to the wealthiest people in the country, myself among them. It's simply not fair. It's not the way that it's traditionally worked in America and we've seen, you know in the 1980's top 1% of income earn earns in America took home 8 or 9% of America's income. in the '90s the top 1% went up to about 16% of America's income and now the top 1% takes home about 22% of America's income. so, there's been an enormous redistribution of wealth from average Americans to the wealthiest people in the country. And they just can't make it. They can't pay their tuitions, they can't pay their healthcare costs, they can't pay for gasoline tank. You've got people who can't even pay to fill up a full gasoline tank today because their credit cards get cut off. So, what we need to do is obviously, make our economy work more effectively for everybody and that means you're going to get back to a system where when you work hard your wages can go up and you can actually live off the wage you earn.

Sounds to me like Kerry is just making it clear that a system that redistributes wealth upwards is just as unhealthy as a system that would redistribute wealth downward. What we have right now is a form of the robber baron economy of the late 1800s--and if we made more crap in this country it might actually be worse because they would be able to control prices on manufactured goods. The wags say that the Republicans are leading us all back to serfdom; I think they're trying to turn this country into Mexico.

Karl Rove wanted one dominant political party; the policies he enacted created an enormous income gap that squeezed the middle class and allowed the mega-rich to increase their holdings. Bankruptcy reform made it harder for the people on the bottom to reorganize their debt and stay afloat, driving more and more people into what was intended to be a large single underclass. In Mexico, you're either mega-rich or just like everyone else, and you either have your gated compound and segregated area from the poor or you don't. Political and economic reform is long overdue in Mexico, and if it happens, look for a drastic reduction in so-called illegal immigration.

All John Kerry is saying is that the current trend destroys our middle class and all the wingnuts want to do is apologize for Karl Rove's insane economic theories. Now that the American people have had a healthy dose of being soaked, they're going to reject, en masse, the insanity of Republican economic theory. The people at the top were moving their wealth overseas anyway--witness the UBS bank scandal that is going to engulf quite a few patriotic mega-rich people who likely broke the law and avoided US taxes. Arguing that raising taxes will cause them to take their money overseas is a joke--they already have. We must cut entitlements and spending and live within our means. And, we have to stop the handouts to the mega-rich.

--WS

Frank Rich Takes John McCain to the Woodshed

You have to celebrate the moment when a prominent columnist actually does his or her job and points out just how ridiculous this campaign has become. We are enthralled with images and slights, attacks and smears when we should be focused on who has the best strategy to reduce the threat of terrorism and manage our economy. The two are intertwined, and Frank Rich nails it:

“In a time of war,” Mr. McCain said last week, “the commander in chief doesn’t get a learning curve.” Fair enough, but he imparted this wisdom in a speech that was almost a year behind Mr. Obama in recognizing Afghanistan as the central front in the war against Al Qaeda. Given that it took the deadliest Taliban suicide bombing in Kabul since 9/11 to get Mr. McCain’s attention, you have to wonder if even General Custer’s learning curve was faster than his.

Mr. McCain still doesn’t understand that we can’t send troops to Afghanistan unless they’re shifted from Iraq. But simple math, to put it charitably, has never been his forte. When it comes to the central front of American anxiety — the economy — his learning curve has flat-lined.

In 2000, he told an interviewer that he would make up for his lack of attention to “those issues.” As he entered the 2008 campaign, Mr. McCain was still saying the same, vowing to read “Greenspan’s book” as a tutorial. Last weekend, the resolutely analog candidate told The New York Times he is at last starting to learn how “to get online myself.” Perhaps he’ll retire his abacus by Election Day.

Mr. McCain’s fiscal ineptitude has received so little scrutiny in some press quarters that his chief economic adviser, the former Senator Phil Gramm of Texas, got a free pass until the moment he self-immolated on video by whining about “a nation of whiners.” The McCain-Gramm bond, dating back 15 years, is more scandalous than Mr. Obama’s connection with his pastor, the Rev. Jeremiah Wright. Mr. McCain has been so dependent on Mr. Gramm for economic policy that he sent him to newspaper editorial board meetings, no doubt to correct the candidate’s numbers much as Joe Lieberman cleans up after his confusions of Sunni and Shia.

A vote for McCain is a vote for Gramm. And Gramm was so soundly rejected the last time he ran for President, you have to question the judgement of someone who would hire him to give advice on running for President. It's a wonder that it took this long for McCain to get rid of Gramm. Again, you come back to judgement.

--WS

Debunking Another Ridiculous Smear

Here's how you come up with a ridiculous premise--put out a misleading, screaming headline about paying "over 50% tax rates," then fudge the numbers and get a shill from the American Enterprise Institute to clutch his pearls and faint at the thought of paying taxes.

New York tax filers reporting more than $375,000 a year in earned income may end up paying nearly 60% of their wages in taxes to the government under a Barack Obama presidency, economists who have analyzed his plan said.

The Democratic presidential candidate is proposing not only raising the federal income tax, but also adding a Social Security tax for those Americans earning more than $250,000 a year. For New Yorkers, that could mean that if the current Social Security rate is applied, the marginal tax rate, or rate on every extra dollar earned, could rise to 58%.

"This is a very eye-popping number," a resident scholar at the American Enterprise Institute, Alan Viard, said.

Under current law, there is a 12.4% Social Security tax on salaries up to $102,000 a year. While the Social Security tax is split equally between employers and employees, economists widely hold that employees shoulder the entire tax burden because employers simply pass along the cost of the tax in the form of lower wages.

Did you catch that--IF the current rate is applied. Not "when" the current rate is applied in a specific plan. "If" the rate is applied. The Obama campaign has no such plan, of course--

The Obama campaign said it is too early to know the exact marginal tax rate because no plan has been finalized. "There is not a specific plan, it is something that Obama would want to work together with Congress to figure out," the economic policy director for the Obama campaign, Jason Furman, said. In respect of the payroll tax rate on income above the doughnut hole, he said, "some of the plans we are looking at, and we are looking at a range of plans, think Congress might like to have rates that are in the neighborhood of 2% to 4%." He added that the plan could also be phased in over a period of years.

Goodness, the poor, poor rich people. Years of living in fat city with ridiculous low tax rates are their entitlement, you see, and those nasty Democrats are going to confiscate all the wealth in the land and give it to welfare queens, of course.

--WS

The Department of Labor Does Nothing For Minimum Wage Workers

I can't think of anything worse than a person who works for low wages not getting their last paycheck from an employer. Yes I can--being told by the US Department of Labor that "this is not a case" is worse.

The Government Accountability Office released a report yesterday that excoriates the Department of Labor for doing nothing to help people who complained about not getting paid for their work.

GAO identified case studies that show WHD inadequately investigated complaints from low-wage and minimum wage workers alleging that employers failed to pay the federal minimum wage, required overtime, and failed to pay employees their last paychecks. Examples of inadequate WHD responses to complaints included instances where WHD inappropriately rejected complaints, failed to adequately investigate complaints, or neglected to investigate until it was too late. The investigations for these cases were inadequate for a variety of reasons.

For example, investigators stated that some delays in investigating cases were caused by a backlog of complaints. In these cases by the time a complaint was assigned to an investigator, the statute of limitations for assessing back wages was close to expiring. In another instance an investigator stated that a thorough investigation was not performed because the complaint was filed anonymously. In addition, several investigators stated that because complaints were related to isolated issues, WHD did not normally perform a full investigation.

Finally, for one last paycheck complaint, when asked about why a thorough investigation was not performed, the investigator simply stated it "was not a case."

I'll give them the benefit of the doubt--you're not going to be able to solve every problem, every issue and every dispute. We're not talking about a lot of money here--we're talking about something more important.

We're talking about trying to do something on behalf of people for whom that small amount of money is a lot of money and for people who at least tried to complain, at least tried to seek redress, and who used the system to reconcile their differences with an employer.

Somebody forgot what they're supposed to be doing for working Americans:

The Department of Labor fosters and promotes the welfare of the job seekers, wage earners, and retirees of the United States by improving their working conditions, advancing their opportunities for profitable employment, protecting their retirement and health care benefits, helping employers find workers, strengthening free collective bargaining, and tracking changes in employment, prices, and other national economic measurements. In carrying out this mission, the Department administers a variety of Federal labor laws including those that guarantee workers’ rights to safe and healthful working conditions; a minimum hourly wage and overtime pay; freedom from employment discrimination; unemployment insurance; and other income support.

The Department of Labor isn't there because employers need to be protected--it's there because employees have been ripped off, taken advantage of, and abused. And if they can't at least try to stand up for the little guy, then those investigators, their supervisors--everyone--needs to quit and go work somewhere else. And, maybe, just maybe, when their employer rips them off, they'll figure out what this is supposed to be about.

You can be damned certain of one thing--those bureaucrats would scream to high heaven and file grievance after grievance if the Department of Labor didn't pay them for a week's worth of work.

Well, duh...

Shockingly, when people have less money and when things cost more, and when wages have failed to keep up, they steal...

One morning last month, the manager of a Stop & Shop in Methuen, Mass., noticed a man, along with his young daughter, leave the store without paying for several bags of shrimp. When police arrived, they found something else on him, too: 20 cans of baby formula.

Call it a sign of the times. Steadily and alarmingly, shoplifting seems to be rising at many retail chains, and experts are pointing at a prime cause: the sputtering economy.

"Wages aren't keeping up with inflation, especially the price of food and energy," says Diane Swonk, chief economist at Mesirow Financial. "It just leaves less money for everything else, and that breeds a lot of temptation."

Retail and law enforcement experts agree that they've seen an increase in store theft during the current slowdown — and not only from customers.

"It's clear that both employee theft and shoplifting are up," says Richard Hollinger, professor of criminology at the University of Florida who compiles the annual National Retail Security Survey. "The most recent rise is being driven by the economy. A lot of people are on the financial edge."

I wouldn't say "a lot of people" because that makes it an idea no one can comprehend. I would say that "there's a good chance the people you see every day are suffering in ways you probably couldn't have imagined two or three years ago."

Of course, the solution is pretty simple: summary executions or life sentences for offenders, right? The only candidate who spoke about class and poverty on a regular basis was John Edwards, and he might as well have been talking about the price of tea in China for all the good it did for him to make this an issue.

--WS

Hold on to your butt...

If Bernancke could, he'd make it -1.5%...and it still wouldn't help...

WASHINGTON - The Federal Reserve, continuing an aggressive series of actions to try and right the struggling economy, cut a key short-term interest rate three-quarters of a point Tuesday to its lowest level in three years.

The central bank cut the federal funds rate, which is used as a benchmark for a wide variety of business and consumer loans, to 2.25 percent from 3 percent. It was the third time the Fed had cut the rate this year, and marked the sixth time the Fed has cut the rate since the economy began to sputter late last summer, when the fed funds rate was at 5.25 percent.

Here, this will distract you from the pain:

While grappling with MSNBC and CNN for viewers, Fox News has also been battling a smaller, more insidious enemy closer to home: bed bugs in its Midtown Manhattan newsroom. In an interview on Monday, Warren Vandeveer, senior vice president for operations and engineering at Fox News, said the cable channel had realized it had a problem a few weeks ago, when an employee “caught a bug and showed it to us.” An exterminator determined that the incursion was limited to a “very small area in the newsroom.” But the source of the bugs was not determined until the exterminator inspected the homes of about 20 employees. Mr. Vandeveer said the exterminator later described one employee’s home as having “the worst infestation he had seen in 25 years in the business.” After making large bags available for employees to stash their belongings, and replacing a number of fabric-covered desk chairs, Mr. Vandeveer said that the treatments had ended about a week ago, and that the problem had been contained. “It’s totally eradicated,” he said. [ h/t to Think Progress]

Heckuva Job, Bernancke--Time to Distract Everyone!

When he has to say this:

BREAKING NEWS: Bush says administration is 'on top of the situation' in dealing with the economy

It really means this:

BREAKING NEWS: Sales of medieval weapons and texts on casting out evil spirits soar; barter system approved by temporary Congress; millions of rioting people smited with powerful laser weapons whose existence not previously disclosed.

Soon--very soon--either a whole lot of people will lose their jobs or there will be pronouncements of "I serve at the pleasure of the President" crowding out the bad news.

And isn't it time for someone blonde and beautiful to come along and distract us from all of this icky bad news? Isn't it time for people to start distracting us from the bad news?


You know, whoever advised Heather Mills in her divorce from Paul McCartney could probably do a better job--she asked for a hundred million, was offered fifty million, and now only gets 48.6 million. If we had that kind of crackerjack leadership in this country, we'd only be moderately screwed blue and left by the side of the road.

Nah, I think we're gonna need more distraction than that. For example, instead of paying attention to current events, your typical conservative blogger goes for the cheap stuff to fill up space. Case in point--Ace of Spades gets his love on:

Coffee, Tea, or Me?
—Ace
Ace of Spades Lifestyle (TM), aerial division.

A 21-year-old Harris County woman filed a $200,000 lawsuit against American Airlines alleging employees on a flight to Los Angeles from Dallas/Fort Worth Airport failed to protect her while she slept from another passenger who masturbated to her and ejaculated in her hair, according to a lawsuit she filed last week in Tarrant County.

Destined for a Spring Break visit with family and friends March 19, the woman flew from Houston to DFW Airport and had settled into her seat for the last leg of flight 2074 to Los Angeles about 11 p.m., the suit states. The woman slept most of the flight, but awoke about 20 minutes before landing when the pilot announced the plane was on decent into Los Angeles. When the woman opened her eyes, she saw that an unknown man had moved into the seat next to her and was staring at her as he masturbated, the suit states.

The woman turned toward the window in embarrassment and in an act of nervousness began to run her fingers through her hair where she noticed “a substantial amount of an extremely sticky substance in her hair,” the suit states.

The man was arrested.

Squares. In Europe they don't have these childish American hang-ups about assaulting someone with flying genetic material. When I was in France, for example, I sat next to a pleasant grandmother sleeping on a train. Cute as a button; must have been ninety five years young.

Anyhoo, I left more DNA on her than OJ left at Rockingham, and she just stirred a little and said "Touche."

Hey, if you're gonna go classy and try to distract yourself from these matters, you gotta stick with Ace. Any man who can make a joke about sexually assaulting old women has to be the cream of the crop when it comes to conservative thought. And by cream, I do mean, cream.

Get Ready for the Meltdown

An economy is like a mating ritual. The parties dance around each other and perform rituals. Instead of confidence, we have fear right now. Fear and Desperation are setting in because we have so many issues that aren't being addressed--and a tax rebate is exactly the wrong thing to do when we're watching everything start to come undone. Desperation is so sexy--ask any college girl and she'll tell you that a nervous, shaking, visibly horny young man who can't make up his mind and can't stop fidgeting with his keys always looks better than the guy who doesn't wear a watch and listens intently whenever someone speaks.

This is desperation, in an economy:

Federal Reserve makes emergency rate cut
Key U.S. interest rate slashed by three-quarters of percentage point

WASHINGTON - The Federal Reserve, confronted with increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday in an emergency move.

U.S. stock futures seesawed Tuesday after the Federal Reserve, responding to a growing financial market crisis, slashed interest rates 0.75 percentage point.

Dow Jones industrial futures, down more than 500 points before the Fed move, were fluctuating violently an hour before the start of trading.

The Interest rate cut comes as a panicked, desperate reaction to this bit of reality:

In Asia, Japan's Nikkei stock average closed down 5.65 percent — its biggest percentage drop in nearly a decade. Hong Kong's Hang Seng index lost 8.65 percent a day after showing its biggest losses since the Sept. 11, 2001, terrorist attacks.

In afternoon trading, Britain's FTSE 100 fell 0.69 percent, Germany's DAX index lost 2.55 percent and, France's CAC-40 fell 1.39 percent.

But don't worry, kids--Sean Hannity has it all squared away:

[Alan] COLMES: That doesn’t seem to be helping the economy very much…because things aren’t going so well.

[Sean] HANNITY: It is, Alan. The economy is phenomenal. Where have you been living?

Do you think a good many of our fellow Americans don't have the slightest clue as to what's going on because they've been going to Hannity and Fox News for their information? Think there's any kind of "cause and effect" here?

UPDATE I - KRUGMAN:

I still keep reading articles asserting that the last two recessions were brief and shallow. Formally, that’s true. But both were followed by prolonged “jobless recoveries” that felt like continuing recessions. Below is the employment-population ratio since 1989, with shading showing the official recessions. In both cases the employment slump went on for a long time after the recession was supposedly over.
There’s every reason to think that the same thing will happen this time. There’s a huge overhang of excess housing inventory; it will probably take several years before housing prices fall to realistic levels; and it’s not at all clear what will fill the gap left by weak housing and consumer spending.
There’s still the question of how deep the slump will be. I can see the case for arguing that it will be nasty. The 1990-91 recession was brought on by a credit crunch, the 2001 recession by overinvestment; this time we’ve got both. I guess we’ll see. In any case, whatever happens will probably last quite a while.

UPDATE II - JIM KUNSTLER:

The United States is so broke, its people at every level from the Federal Reserve on down don't know whether to shit or go blind. The homeowners cringing in the media rooms of their 5000-square-foot personal family resorts don't know how long they can stay put microwaving pepperoni hot pockets with the default clock ticking. The mortgage "servicers" don't know how they will persuade interested parties like, say, the Illinois State Cafeteria Workers' Pension Fund (holder of X-amount of mortgage-backed securities underwritten by, say, Merrill Lynch or Deutsche Bank) to foreclose on properties scattered everywhere from from Key West to Bainbridge Island -- or if there is actually any mechanism known to man that would make it possible to "work out" the sliced-and-diced collateral. The millions of maxed-out credit card holders and the issuers of their plastic are stuck together paddling a leaky tub in a sea of troubles every bit as wide, deep, and polluted as the one the mortgage junkies and their enablers are sinking in. The developers of malls, office parks, and power centers are weeping into their filing cabinets as the harsh daylight of insolvency stops the orgy of "consumption" and the retail tenants pack up their unsellable goodies for the liquidators, and the rent checks stop arriving in the mail, and the notes on this mall and that mall enter the eerie realm of "non-performance." And, of course, there are the genius wonder boyz and Wall Street playerz whose algorithms and turpitudes underwrote the script of this horror show -- for all I know they'll end up laughing into sugary skull drinks on a beach in the Cayman Islands, or doing Chinese fire drills in federal prison (or simply ass-fucked on the granite countertops of their Tribecca aeries by mobs of angry, repossessed, swindled former American dreamers pouring into Manhattan from the tract house dormitories of New Jersey and Long Island).

Yes, It Is the Economy, Stupid

While the campaign season unravels into ugliness--everyone seeming to bring up Martin Luther King Jr. whenever it suits them--there is widespread ignorance about what the subprime meltdown, the devaluation of the dollar, the cost of the war in Iraq, and the rise in energy prices means for this country.

[Here's my take on the whole MLK issue--shut up. There is no one worthy of claiming his mantle or holding themselves up to that level. No one. He paved the way for people to have a calmer and more reasonable discussion about race. He paid the price, not the Clintons, not the Obamas, and certainly not the Romneys. He died so that people could have a discussion, not a slap fight.]

Back to the economy. Yawn. Snooze. Whatever. Yes, I know. But wait, here's why this matters--from MSNBC today:

Wholesale prices rose by 6.3 percent in 2007
Year-over-year gain was largest in 26 years

WASHINGTON - Wholesale inflation last year shot up by the largest amount in 26 years while retailers suffered their worst December shopping season in five years as mounting economic woes caused consumers to put away their wallets.

The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

Meanwhile, retail sales fell by 0.4 percent in December, the worst showing in six months, the Commerce Department reported. Consumer confidence has plunged, reflecting the worsening housing slump and a lingering credit crisis.

For inflation, the year ended on a more positive note, with wholesale prices falling by 0.1 percent in December. That reflected decreasing costs last month for gasoline and other energy products. It was a significant slowdown after prices had soared by 3.2 percent in November, which had been the biggest one-month increase in 34 years.

The combination of rising inflation pressures and a weak economy represent a dilemma for the Federal Reserve over whether to cut rates to boost economic growth even at the risk of making inflation worse.

Federal Reserve Chairman Ben Bernanke last week sent a strong signal that the Fed is more worried at the moment about weak growth than inflation — given a series of weaker-than-expected data in recent weeks.

The economy skidded to a virtual standstill in the final three months of last year, raising fears the country could fall into a recession, unable to withstand the multiple blows from the prolonged downturn in housing, a severe credit crisis and soaring energy costs.

What we have is a weakened and ineffective Fed chairman who simply can't keep cutting interest rates to stave off problems. Rates are already bottoming out and further cuts are going to do what? Take us to zero? What then? What will the shock of having to raise those rates do to the economy?

Then we have multiple issues that derive from failed leadership--poor energy policy, poor monetary policy, a constant need to let everyone else bail us out, and no end in sight for the billions being spent in Iraq. Do we have a Department of Labor that is looking out for the American worker? Don't make me laugh!

Everything is going to get more expensive, faster and with more impact on lower income Americans than has previously been felt. That's why they are going back to the early 1980s and the 1970s to find precedents for these rises and developments. Are you hearing stories about people having to leave their jobs because gas is too expensive? Are you hearing stories about people getting to the end of that rope and finally having no where to go? Because it's getting harder and harder to make money with a vehicle, or at a job more than 20 miles away from where you live and there's no letup in sight. We're at the beginning of this, not the end.

More and more people are going to start losing their homes. As more and more debt increases in this country, more and more people are going to fall further and further behind. We are spending ourselves into oblivion, and the day of reckoning gets closer and closer without any kind of coherent strategy in place to deal with it.

Here's where energy policy and where people live intersect--those long commutes that I alluded to? They're caused by people living far from where they work and were enabled by a system where you once could live twenty or thirty miles from where you worked and where gas was cheap and roads weren't crowded. We have to roll back the development of these massive, sprawling communities that are too far from places where people work. Is there money to build more roads? Of course not--that money was pissed away years ago. Is there any sense to living this way? Well, you've got to explain why there isn't and you've got to be straight with Americans about it.

Are they talking about it on the campaign trail? Are they talking about sacrifice and changing the formula for delivering entitlements to Americans? Because it is all tied together. Find a sane way to end the war, you stop the flow of money into that rat hole. Find a way to redirect that effort into getting us off foreign oil, you jumpstart the alternative energy industries that are in their embryonic stage in this country. Get us into a shared sacrifice and alternative energy frame of mind, you change the habits of Americans. Change their habits by getting them to save their money and quit buying shit at Wal-Mart. And you can't do anything until you deal with entitlements. If you think you can "cut foreign aid" and "cut defense spending" and balance the budgets of the future, I'm sorry. It's not enough. The biggest piece of the pie chart is the entitlement part, and the part where we pay interest on the debt gets bigger all the time.

I know, I know. Wishful thinking. Well, it's thinking I wish was being articulated out there.

[And this is where you go to find pictures of fighting bears. Grrr! Tell your friends.]

Quote of the Day

"He's kind of waking up to the necessity of having a certain policy that ought to be consistently followed, even if it's irrational." Sen. Charles E. Grassley (Iowa), the conservative ranking Republican on the Senate Finance Committee, talking about pResident Bush's relationship to congress re: economic policy.