Saturday, October 19, 2019
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Sorry (Not Sorry), Virginia Politicians: You Can’t Support New Fracked-Gas Pipelines...

Among the many other "joys" (most definitely in air quotes) of covering Virginia politics is listening to hypocritical elected officials and candidates talk about...

Superb Videos: “Whites & Blacks Face Same Struggles in ‘Fight for...

These videos by my friend Eric Byler are really great, I strongly recommend that you check them out! Also, this Nic Smith guy is...

Debunking Lie After Lie, Idiocy After Idiocy, in Trump’s “Economic” Speech

See below for Donald Trump's economic speech earlier today in Detroit, with a few comments by me in red with my initials (LF). In...

More Hidden Truths About Modern “Capitalism”

This is the promised follow-up to the earlier article Hidden Truths About Modern Capitalism, based on Cambridge economist Ha-Joon Chang's easy-read book 23 Things They Don't Tell You About Capitalism.

To refresh your memory, these two hidden truths, or "things," were explained previously:

Thing 1:  There is no such thing as a free market. The truth is, so-called free markets, the foundation of Freidman economics, simply do not and cannot exist in the real world. They are a fantasy, and pretending you can create such markets by formal de-regulation only screws it up for everybody.

Thing 5: Assume the worst about people and you get the worst.The truth is, no society, much less any economic activity, can survive and work efficiently if everyone really operates on the rational basis of grabbing their own short-term personal profit by any means possible, because the system would completely collapse under the weight of cheating, catching cheaters, and punishing them. No trust, no market.

Obama Campaign Appeals for Intellectual Indulgence

These past three years, the anti-Obama contingent has cheered at every shred of bad economic news and bureaucratic misstep. The wild-eyed charges of an ideological war carried on by an administration bent on Marxist objectives are all aimed at obscuring the sad results of three decades of "supply-side" economic mischief.

"Larry Summers and I were both on the side of 'we need a more definitive clean-up of the financial system.' And the question was if somebody, you know, really wasn't solvent, do you need the government to put in capital, realize the losses, clean it up, and then put it back into private hands?" - Christina Romer, White House Economic Advisor 2009 - 2010

Any serious study of this administration's policies reveals a most pragmatic response by Obama at almost every turn. From the selection of Treasury Secretary Tim Geithner and many other establishment appointees, to the decision not to seize or take the banks to the woodshed, Obama has erred on the side of caution and market reassurance rather than a confrontation with forces that would flirt with a stalemate leading to economic stagnation or catastrophe. It is essential that the story be told clearly and that we rely on the accomplishments. That looks to be the approach the Obama campaign will employ based upon the message from the campaign thus far. The facts are more than embarrassing for the right's apologists.

Krugman calls Romney “The Amnesia Candidate”

Just how stupid does Mitt Romney think we are? If you've been following his campaign from the beginning, that's a question you have probably asked many times.
That's how the Nobel Economic Laureate begins this column this morning, immediately reminding us that Romney appeared at a drywall factory (owned by a Republican, btw) which was closed during the Bush administration yet blaming Obama for the closure, attempting to make it a symbol.  As Krugman notes, "It was a symbol, all right - but not in the way he intended," especially as the press quickly picked up on when the factory closed.  And although the Romney campaign attempted to cover itself by saying the factory was still closed because Obama's policies had failed to get the economy going again, Krugman counters saying, "Actually, that factory would probably still be closed even if the economy had done better - drywall is mainly used in new houses, and while the economy may be coming back, the Bush-era housing bubble isn't."

There is more - deliciously so.

Pity the Billionaire

or, if you prefer the complete title of the new book by Thomas Frank, Pity the Billionaire:  The Hard-Times Swindle and the Unlikely Comeback of the Right.

If you have been a regular reader of Daily Kos over the past few years, you will have few earthshaking moments while reading this book - almost all of the points Frank makes have appeared here, in front-page stories and in posts by reader.  Nevertheless this book may qualify as essential reading for how much it brings together, and in the fashion it provides a coherent explanation of what has happened, from the strategy and tactics of those who have already destroyed trillions of the wealth of others in America and abroad, in the failure of Obama and Cogressional Democrats to have prevented it from happening and in allowing it - at least until recently - to continue pretty much unabated. Or, as Frank puts it near the end of his Introduction,  

This is the story of a swindle that will have terrible consequences down the road.  And although it sounds curious to say so, the newest Right has met its goals not by deception alone - although there has benn a great deal of this - but by offering and idealism so powerful that it clouds its partisans' perceptions of reality.   (p. 12)

And if there is a key, brief takeaway that can be learned from how they operated, it is found on p. 33:

To play by the rules was a chump's game.

99.9 versus .1 – Krugman explains the top 1/1000th

His column is titled We are the 99.9% and it is very much worth your time.  As he writes, according to a CBO report which only examines data up to 2005 (and it has gotten worse)
between 1979 and 2005 the inflation-adjusted, after-tax income of Americans in the middle of the income distribution rose 21 percent. The equivalent number for the richest 0.1 percent rose 400 percent.

And if we look at Capital Gains taxes, currently at only 15%,

taxes on capital gains are much lower than they were in 1979 - and the richest one-thousandth of Americans account for half of all income from capital gains.

Given this history, Krugman asks a very basic question, why do Republicans advocate further tax cuts for the very rich even as they warn about deficits and demand drastic cuts in social insurance programs?

Please keep reading.

New Bloomberg Story Shows Far-Flung Predatory “Capitalism” of Koch Industries

At its best, capitalism is the best of the historic economic systems.  At its best, the capitalist system renders the American Dream attainable for most Americans, even as the wealthy are well-heeled.  For some of the well-heeled, though, that isn't enough.  For some, it's anything goes.  At its worst, the capitalist system becomes entirely predatory, wrapping itself inside out as it ultimately devours itself.  That process is under way as I write this.  And at its worst, it is something right out of today's news (specifically, an expose by Bloomberg News). The story about which I write is one detailing alleged exploitation, and alleged corruption by Koch Industries. There are several allegations of wrongdoing.  These are pretty amazing allegations in this article, not from a liberal blog, but from Bloomberg News! The expose is a must read here. According to Bloomberg's Asjylyn Loder and David Evans, the Koch Brothers, are not just political meddlers and libertarian extremists, but corporate ones (extremists) as well.  They appear to be the poster children for why regulation is necessary and should be maintained, improved and re-enforced.

Like it or not, it is almost certain you indirectly support capitalism run amok with your purchases. If you have Stainmaster carpet, you feed Koch Industries. If you buy Angel Soft or Quilted Northern TP, you feed the Koch machine to the tune of about $7 a week. If you are a woman with Lycra in your clothing (It's not just for shape-wear and swimsuits any more. Even slacks, jeans and shirts now tend to have it) you are feeding the Koch Brothers. (I plead guilty.) Would that our donations to the Tea Party were put to more productive use!!!!!  But our purchases ought to be directed more productively and profitably for our own interests and those of most Americans. (Note to self...)

But, aside from being one of the largest privately held companies in the US, Kochs' biggest product is the "Astroturf" organizations they've built to launch the so-called Tea Party movement and capture the politics of America. You owe it to yourself to read up and remember the details of the Bloomberg article.  It will come in handy (over and over) as we in Virginia try to stave off a complete Tea Party takeover of the Virginia Senate. Go ahead.  Read it!  Then, ask yourselves how patriotic these so-called Tea party "patriots" really are.

The danger of Herman Cain’s 9-9-9 plan

...is the economic illiteracy of most Americans.  This became clear when we discussed the Republican debate in my classes, especially with my Advanced Placement students, after the Republican debate on Wednesday.   A number of students thought Cain was persuasive, and thought his plan made sense.  Some of their parents also seemed to like the idea.

Why?  Because when the parents do their taxes they are often middle class people whose incremental tax rate is either 15% or 25% or 28%  (I have only a few students from families whose incremental rate would be 33% and none that I know of in the top bracket of 35%).  Thus a 9% personal income tax rate seems appealing.

What too many fail to realize is that it would be achieved by eliminating most deductions, thus raising the effective tax rate they would pay.  We are in the 28% bracket, but the effective income tax rate on our adjusted gross income was only 17% this past year because of the deductions we are allowed.

And that says NOTHING about the impact of a national sales tax of 9%, which would clobber lower and middle class families, while largely exempting the upper classes.  Hell, 9% is even lower than the current 15% Capital Gains rate that enables many wealthy to pay lower effective tax rates than their employees, eg:  Warren Buffett paying at a lower rate on his income than his secretary -  who also has to pay payroll taxes on most of her income.

A few more thoughts: