Anatomy of a Big Lie About Taxes

If you want to see Republican supply-siders squirm, ask them this simple question about the "Laffer curve": at what marginal tax rate does the “backward bend” (higher tax rates produce less revenue) begin? Even Laffer himself has not ventured an answer. Nor has anyone else.

Examine the depictions of the Laffer curve drawn by Laffer and you find the graph shows only two tax-rate numbers 0% and 100% at which the government collects no revenues — at 0% because their is no tax levied and 100% because there is no incentive to produce.

Paul Krugman: Free to Die

Back in 1980, just as America was making its political turn to the right, Milton Friedman lent his voice to the change with the famous TV series “Free to Choose.” In episode after episode, the genial economist identified laissez-faire economics with personal choice and empowerment, an upbeat vision that would be echoed and amplified by Ronald Reagan.

But that was then. Today, “free to choose” has become “free to die.”

I’m referring, as you might guess, to what happened during Monday’s G.O.P. presidential debate. CNN’s Wolf Blitzer asked Representative Ron Paul what we should do if a 30-year-old man who chose not to purchase health insurance suddenly found himself in need of six months of intensive care. Mr. Paul replied, “That’s what freedom is all about — taking your own risks.” Mr. Blitzer pressed him again, asking whether “society should just let him die.”

And the crowd erupted with cheers and shouts of “Yeah!”

The Decline and Fall of the American Middle Class

The heart of our political malaise is that the middle class, so long a powerhouse of US prosperity, is being crushed as never before

by Paul Harris

No one can accuse the candidates on stage at Monday's Republican debate of not discussing a broad range of topics. They talked about big issues like social security, the wars in Iraq and Afghanistan, energy independence, repealing healthcare reform and the need for job creation. And they talked about small issues for political point-scoring: like HPV vaccines for girls.

But missing from the debate – and, in fact, much current discussion of America's politics – is the single biggest issue facing the country: the destruction of the American middle class. For stories on how America is bifurcating into haves and have-nots, with precious little in between, you have to dive behind the headlines of the latest Washington political bun-fight and find the devil in the details.

Targeting Dissent

Thursday 15 September 2011

by: Nancy Murray and Kade Crockford, Truthout and ACLU Massachusetts | Special Feature

Ten Years Later: Surveillance in the "Homeland" [4]is a collaborative project with Truthout and ACLU Massachusetts.

How little - yet how much - has changed in the last 40 years. The COINTELPRO papers sound distinctly 21st century as they detail the monitoring of perceived threats to "national security" by the FBI, CIA, National Security Agency (NSA), Secret Service, and the military, as well as the intelligence bureaucracy's war on First Amendment protest activity.

The Church Committee investigation concluded [5] in 1976 that the "unexpressed major premise of the programs was that a law enforcement agency has the duty to do whatever is necessary to combat perceived threats to the existing social and political order."

Three Things to Love (and a Few More to Hate) About Obama’s Jobs Plan

• Dean Baker
• September 15, 2011 | 12:00 am

President Obama created big expectations last week for the speech where he announced his new jobs plan. Remarkably, his rhetoric came close to fulfilling them. But what about the actual plan he sent to Congress on Monday? If it were to be enacted in its current form (which it won’t), would it have a shot at turning around the economy? As it turns out, there are definitely some things to like in Obama’s roadmap, even while there are some very big warning signs as well.

On the plus side, President Obama asked for a sizable package. The cost would be $450 billion, with most of the expense in the 2012 fiscal year. By contrast, after removing the fix to the alternative minimum tax, the 2009 stimulus package came to about $300 billion a year in both 2009 and 2010. After seeming determined to think small, Obama is asking for something resembling real money. Of course, this is still well short of what is needed to get the economy back to full employment. The collapse of the housing bubble led to a falloff in housing and consumption demand that together is close to $1.2 trillion annually.

News Corp shareholders lodge complaint against Rupert Murdoch

Major US banks accuse Murdoch and News Corporation of corporate misconduct extending far beyond UK

Full text of shareholders' complaint

Ed Pilkington in New York
guardian.co.uk, Tuesday 13 September 2011 11.37 EDT

A prominent group of US banks and investment funds with substantial investments in News Corporation has issued a fresh legal complaint accusing the company of widespread corporate misconduct extending far beyond the phone-hacking excesses of News of the World.

The legal action, lodged in the Delaware courts, is led by Amalgamated Bank, a New York-based chartered bank that manages some $12bn on behalf of institutional investors and holds about 1 million shares of News Corporation common stock. Its lawsuit is aimed against the members of News Corp's board, including Rupert Murdoch himself, his sons James and Lachlan, and the media empire's chief operating officer, Chase Carey.

More Details Emerge in Republican Assault on Post Office and Postal Unions

By Kenneth Quinnell

The Republican plans to weaken the United States Postal Service are starting to get more and more attention, including Sam Seder's Majority Report, Thom Hartmann, Nicole Sandler's radio show and Allison Kilkenny's brilliant Truthout article:

It was only a few years ago that the USPS was considered not only stable, but thriving. The biggest volume in pieces of mail handled by the Postal Service in its 236-year history was in 2006. The second and third busiest years were in 2005 and 2007, respectively. But it was two events: one crafted during the Bush years and another supervised by House Oversight Committee Chairman Darrell Issa, that would cripple this once great institution.

Perhaps it was its booming history that first drew Congress' attention to the Postal Service in 2006 when it passed the Postal Accountability Enhancement Act (PAEA), which mandated that the Postal Service would have to fully fund retiree health benefits for future retirees. That's right. Congress was demanding universal health care coverage.

Return of the Big GOP Medicare Lie

—By Rick Ungar | Tue Sep. 13, 2011 10:53 AM PDT

The participant's in last night's GOP presidential debate once again took the opportunity to pretend that the Affordable Care Act ("Obamacare") put a massive dent in Medicare by cutting $500 billion from the program.

Michele Bachmann told us that "We know that President Obama stole over $500 billion out of Medicare to switch it over to Obamacare." Mitt Romney intoned "He cut Medicare by $500 billion. This is a Democratic president the liberal, so to speak, cut Medicare."

Yeah…except that nobody stole anything and Medicare was not cut by $500 billion.

Top Air Force Official Issues Religious Neutrality Policy in Wake of Truthout's "Jesus Loves Nukes" Exposé

Wednesday 14 September 2011
by: Jason Leopold, Truthout | Report

A top US Air Force official, in an attempt to ensure the Air Force adheres to the Constitution as well as its own regulations and policies, issued guidelines that calls on "leaders at all levels" to take immediate steps to maintain "government neutrality regarding religion."

In his policy memorandum dated September 1, but sent Tuesday to all major commands, Air Force Chief of Staff Gen. Norton A. Schwartz said, "Leaders ... must balance Constitutional protections for an individual's free exercise of religion or other personal beliefs and its prohibition against governmental establishment of religion."

The First Amendment establishes a wall of separation between church and state and Clause 3, Article 6 of the Constitution specifically prohibits a "religious test."

Noam Chomsky on How the Military Is Bankrupting Us and Why Corporate Interests Want to Destroy Public Programs

By Noam Chomsky and Aaron Mate and Amy Goodman, Democracy Now!
Posted on September 13, 2011, Printed on September 16, 2011
http://www.alternet.org/story/152398/noam_chomsky_on_how_the_military_is_bankrupting_us_and_why_corporate_interests_want_to_destroy_public_programs

Editor's note: The following is a transcript of a Noam Chomsky interview on Democracy Now! Chomsky covers a wide range of subjects, including the true cost of America's empire, the significance of Obama's recent jobs proposal, and the real reasons why corporate interests and conservatives are intent on demolishing wildly successful public programs like Social Security.

President Obama sent his new jobs proposal to Congress on Monday with a plan to pay for the $447 billion package by raising taxes on the wealthy. Noam Chomsky says, "The healthcare system...the huge military spending, the very low taxes for the rich [and corporations]...those are fundamental problems that have to be dealt with if there’s going to be anything like successful economic and social development in the United States." As Republican presidential candidate, Texas Gov. Rick Perry, calls Social Security a "Ponzi scheme," and Democrats buy into the narrative that the program is in crisis, Chomsky notes that "to worry about a possible problem 30 years from now, which can incidentally be fixed with a little bit of tampering here and there, as was done in 1983, to worry about that just makes absolutely no sense, unless you’re trying to destroy the program."

AMY GOODMAN: Our guest for the hour is MIT professor Noam Chomsky. His latest book is called 9-11: Was There an Alternative? That last question, "Was there an alternative?," referring to the assassination of Osama bin Laden. Aaron?

AARON MATÉ: Well, Noam, you mentioned the changes in discourse between 10 years ago and today. And actually, this issue of the reasons behind 9/11 came up Monday night at the Republican presidential debate. Congress Member Ron Paul of Texas drew boos from the crowd and a rebuke from other candidates on the podium when he criticized U.S. foreign policy in discussing the roots of 9/11.

Happy Lehman Brothers Bankruptcy Day

Thursday, 09/15/2011 - 7:05 pm by Matt Stoller

Three years later we still haven’t dealt with the problems in the financial crisis.

Lehman’s bankruptcy happened three years ago today. It should be quite clear at this point that another Lehman is going to happen again. Policymakers didn’t deal with the crisis of 2008-2009; they turned it into a much longer crisis with far greater lasting damage.

There are two intertwined issues with any major financial panic. One issue is liquidity — can an asset be sold or traded without significant movement in the price? Can an institution exchange its assets for assets of similar value? In a bank run, the answer is no. People are too afraid to accept that their bank deposit is worth what is in the account because they don’t trust the bank that tells them what they have in the account. The second issue is solvency — is there enough value to pay off all creditor claims? Are assets greater than liabilities, even in a liquid market?

Texas poverty figures challenge Rick Perry jobs record

Report published by non-partisan CPPP says poverty in Texas is higher than the rest of America – and growing faster

• Paul Harris in New York
• guardian.co.uk, Thursday 15 September 2011 10.45 EDT

Republican frontrunner Rick Perry has put his economic record as Texas governor at the heart of his presidential nomination campaign, but a report has painted a stark picture of rising unemployment and spiralling poverty in the state.

The policy paper, published by the Austin-based non-partisan Center for Public Policy Priorities, said poverty in Texas was currently higher than the rest of the US and was growing faster.

The $2 Billion UBS Incident: 'Rogue Trader' My Ass

by Matt Taibbi

The news that a "rogue trader" (I hate that term – more on that in a moment) has soaked the Swiss banking giant UBS for $2 billion has rocked the international financial community and threatened to drive a stake through any chance Europe had of averting economic disaster. There is much hand-wringing in the financial press today as the UBS incident has reminded the whole world that all of the banks were almost certainly lying their asses off over the last three years, when they all pledged to pull back from risky prop trading. Here’s how the WSJ put it:

The Swiss banking giant has been struggling to rebuild trust after running up vast losses in the original financial crisis. Under Chief Executive Oswald Grubel, the bank claimed to have put in place new risk management practices, pulled back from proprietary trading and focused on a low-risk client-driven model.

How the rich blew up the banks

By: Charles R. Morris
September 12, 2011 04:45 AM EDT

Gold is a traditional inflation hedge. Yet it has been hovering near record real levels, even as the economy careens toward an inflation-killing double-dip recession. Treasury rates are resolutely stuck at near-zero as the U.S. financial position goes to hell in a hand-basket. Watch for the skies to start raining frogs.

An intriguing paper by Zoltan Pozsar, a senior International Monetary Fund researcher, sheds a new light on these phenomena. A massive buildup of free cash in the hands of companies, hedge funds and rich individuals may be turning many of the canons of conventional banking on their heads.

The cash balloon is hardly a surprise. The top 1 percent of American households has been collecting a 20 percent to 25 percent of taxable income for some years now. At some point, you run out of pockets to stuff it in.

Lehman Brothers: three years of denial

Lehmans crashed for a simple reason: an ignored $8tn housing bubble. But don't expect the Greenspan sycophants to admit it

Dean Baker, guardian.co.uk,
Monday 12 September 2011 14.30 BST

As we prepare to celebrate the third anniversary of the Lehman Brothers bankruptcy and the ensuing financial crisis, it's a good time to assess the situation and ask what has changed. The answer is not encouraging.

Very little has changed about either the realities on the ground or the intellectual debate on economic issues in the last three years. The "too-big-to-fail" banks are bigger than ever as a result of crisis induced mergers. Financial industry profits now exceed their pre-crisis share of corporate profits, and executive pay and bonuses are again at their bubble peaks.

A Dream? A Lie? Or Something Worse?

By Terrance Heath
September 12, 2011 - 3:43pm ET

Given what I've been writing for the past few years about upward mobility and the state of "the American Dream," it doesn't come as a surprise to me that downward mobility is the trend that seems likely to dominate the next decade — especially if Washington continues its current trend.

Nearly one in three Americans who grew up middle-class has slipped down the income ladder as an adult, according to a new report by the Pew Charitable Trusts.

Downward mobility is most common among middle-class people who are divorced or separated from their spouses, did not attend college, scored poorly on standardized tests, or used hard drugs, the report says.

The GOP War on Voting

In a campaign supported by the Koch brothers, Republicans are working to prevent millions of Democrats from voting next year

By Ari Berman

August 30, 2011 7:40 PM ET

As the nation gears up for the 2012 presidential election, Republican officials have launched an unprecedented, centrally coordinated campaign to suppress the elements of the Democratic vote that elected Barack Obama in 2008. Just as Dixiecrats once used poll taxes and literacy tests to bar black Southerners from voting, a new crop of GOP governors and state legislators has passed a series of seemingly disconnected measures that could prevent millions of students, minorities, immigrants, ex-convicts and the elderly from casting ballots. "What has happened this year is the most significant setback to voting rights in this country in a century," says Judith Browne-Dianis, who monitors barriers to voting as co-director of the Advancement Project, a civil rights organization based in Washington, D.C.

Did the euro just enter its death throes?

http://www.americablog.com/2011/09/krugman-did-euro-just-enter-its-death.html

by Gaius Publius on 9/11/2011 07:15:00 PM 


Friday we wrote about the striking down-move in the euro. (You can read that short piece here. Here's a short-term chart; here's a longer-term one.

The up-move that started in mid-2010, from $1.20 to $1.45(ish) is the eurozone trying to fix its problems by making sure troubled economies are able to make debt repayments to bankers.

Paul Krugman: It's an Economy, Not a Corporate Venture

http://www.truth-out.org/its-economy-not-corporate-venture/1315489637

Thursday 8 September 2011

Matt Yglesias, the political commentator, is mildly upset over a report that President Barack Obama is turning to the investor Warren E. Buffett and Alan Mulally, the chief executive of the Ford Motor Company, for economic advice.

“My hope is that this is more about a search for ‘validators’ than a search for policy advice,” Mr. Yglesias wrote Aug. 23 on the blog ThinkProgress. “Yet it seems to me that both inside the administration and outside of it there’s a shortage of turning to economists with specific expertise in recessions for advice on coping with the recession.”

It’s not clear how much to make of the report. But it’s always good to remember that businessmen — even great businessmen — don’t necessarily know much about how to make the macroeconomy work.
 

The End of Loser Liberalism

The End of Loser Liberalism

Saturday 10 September 2011
by: Dean Baker, Center for Economic and Policy Research | News Analysis
Progressives need a fundamentally new approach to politics. They have been losing not just because conservatives have so much more money and power, but also because they have accepted the conservatives’ framing of political debates. They have accepted a framing where conservatives want market outcomes whereas liberals want the government to intervene to bring about outcomes that they consider fair.

A simple income tax

A simple income tax 

By David Cay Johnston

Tue Sep 6, 2011 9:29 am EDT


Since at least July 1, 1943, the day income tax withholding from paychecks began to finance war and tamp down demand for consumer goods, American politicians have promised a simpler tax system.

But while politicians talked on for seven decades, the code grew ever more complex with favors for this group or that, favors that mostly benefited the rich.


One country actually has created a very simple income tax. That would be China, its income tax filing rules modeled on those of the U.S. Congress circa 1913-1942.
 

America is GE's tax haven

http://www.reuters.com/article/2011/08/23/column-dcjohnston-ge-idUSN1E77L1GU20110823

By David Cay Johnston

Tue Aug 23, 2011 8:03am EDT

Aug 23 (Reuters) - Washington politicians say high corporate tax rates are driving U.S. companies to invest offshore where tax rates are lower. But that is not General Electric's experience.

GE's disclosures show that over the last decade it paid much lower tax rates in America than offshore, just the opposite of the Washington political mantra. Even more puzzling, the U.S. corporate giant chooses to take more of its profits in other lands despite the higher tax rates there.

Given that GE (GE.N) has a roughly 1,000-person tax department dedicated to paying as little as possible in taxes, what the disclosures show is that something other than tax policy is driving GE's business decisions.

New Docs Detail How Feds Downplayed Ground Zero Health Risks

by Anthony DePalma, Special to ProPublica
Sep. 8, 2011, 4:30 p.m.

In the dark and uncertain days after Sept. 11, 2001, the sight of thousands of shaken New Yorkers returning to their apartments, offices and schools in Lower Manhattan seemed to signal a larger return to normalcy.

Now new documents have emerged showing that federal officials in Washington and New York went further than was previously known to downplay concerns about health risks, misrepresenting or concealing information that ultimately might have protected thousands of people from the contaminated air at ground zero.

Employers Diss Obama Job Plan

Wow, this is just embarrassing. A raspberry from businesses, the object of Obama’s tender ministrations. And the reason? Basically, too little demand, something that tax cuts won’t remedy.

From the New York Times:

The dismal state of the economy is the main reason many companies are reluctant to hire workers, and few executives are saying that President Obama’s jobs plan — while welcome — will change their minds any time soon.

[...]

“You still need to have the business need to hire,” said Jeffery Braverman, owner of Nutsonline, an e-commerce company in Cranford, N.J., that sells nuts and dried fruit. While a $4,000 credit could offset the cost of the company’s lowest-cost health insurance plan, he said, it would not spur him to hire someone. “Business demand is what drives hiring,” he said.