Friday, February 18, 2011

The universal Right Winger

The rebellion against tyranny is in its fifth day at the epicenter in Madison Wisconsin but it is spreading to other states where democracy is under assault. Solidarity rallies are under way in Minnesota, Indiana, Ohio and Missouri and other places. In a show of bluster reminiscent of Egypt’s former President for life the right wing thug Governor Scott Walker emerged today to proclaim that he will not back down despite today’s crowd swelling to 40,000 plus. This is up from 30,000 on Thursday and 15,000 the day before.

Walker attempted to minimize the turnout by saying that hundreds of thousands of public workers weren’t there, ignoring the other rallies taking place in cities across the state. Indeed he has little incentive to back down as this is the all or nothing push from the far right to take power permanently. If he can crush public unions in the birth place of public unions then the union movement can be killed once and for all. Their goal is that there be no organized resistance to the GOP in the 2012 elections and the Citizens United ruling from the US Supreme Court will allow them to simply buy the election.

Once the far right controls the Federal government they can manufacture a crisis allowing them to consolidate power and crush any opposition.  In the manufactured crisis in Wisconsin the Senate Democrats have fled the state to prevent a quorum so that no vote can be taken and the power grab buried deep in the legislation can be revealed.

And make no mistake the budget crisis is completely manufactured because prior to the Republicans giving away 135 million to crony corporations in January, Wisconsin had a projected 140 million dollar surplus. The multi-billion dollar deficits Republicans project for the future are entirely arbitrary numbers based on the failure of the state to do anything responsible for the next 100 years or so.

No, this is a naked power grab intended to eliminate political opposition that might stand in the way of a permanent Republican majority before the average American wakes up to what is happening to him. The Republicans may have over played their hand by not counting on any meaningful push back.

But, like Mubarak they don’t intend to give in and are going to deploy their own thugs in the form of a three hour Tea Bag rally Saturday afternoon at the Capitol in Madison. An unknown number tea bag protestors are being bussed to face off with the tens of thousands a people who showed up spontaneously to oppose Governor Hosni Walker’s dictatorial rule.
The rightwing noise machine at Fox is predicting that Obama’s henchmen will become violent if they don’t get their way. The parallels to Egypt are striking but the Right really only has one script no matter what language they speak. Lust for power and unbridled greed are universal concepts.

Thursday, February 17, 2011

Beautiful, beautiful pigs

Initial unemployment claims jumped back up over 400,000 for last week. This is getting to be a tired old song, the number will need to be under 275,000 to indicate new jobs are being created. The continued high number doesn’t indicate we are losing jobs but it reflects the continued decline in wages as workers are replaced with people working at ever lower wages.

The Federal Reserve is upping its prediction of growth for 2012 to somewhere between 3.4 to 3.9%. I’m predicting that pigs will fly. The Fed is buying out the rich who were invested heavily in 30 year Treasury Bonds to the tune of a trillion dollars. The rich are in turn buying into hedge funds that put money into anything and everything but creating jobs and the interest rates that were supposed to come down are going up on inflation fears. The Fed is predicting unemployment to remain high but to start coming down slowly. I predict supersonic flying pigs.

Not only is nothing meaningful being done to “create jobs” but this extra trillion the hedge funds now have to play with is driving up consumer prices which hobbles what little economy we have left. Besides no trade policy and no manufacturing policy, Obama has no problem with pay freezes despite the Consumer Price Index rising sharply which makes them into to pay cuts. This is of course exactly the wrong thing to do to head off a Depression, Herbert Hoover proved that.

With no Trade Policy (or rather with a pro trans-national corporate trade policy) any growth in the economy is reflected in a burgeoning trade deficit. Even no growth or a decline in economic activity there will still be an ever bigger trade deficit as factories continue to close, the latest count is 50,000 just since 2000. The bad economy encourages factory closings with tight credit, weak demand and increasing commodity costs as the hedge funds and Wall Street banks drive up the prices of raw materials.

Obama says everything will be okay if we just become more competitive and have more free trade deals. The Republicans say everything will be okay if we just cut taxes and stop regulating business and do away any government spending that doesn’t benefit the rich.

I say everything will be okay in the spring when the pigs come back north, They are beautiful flying in a graceful V formation their oink calls echoing across the prairie.

Myth busters

You can't tax corporations because they will just pass it along to their victims customers. First they are taxed on their profits not on their sales like we consumers are with regressive taxes (sales and excise taxes for example). If they "pass it along" by raising prices that would only increase their profits and they would pay more income tax. This sort of round robin maxes out at about double the amount of tax if you play it out by continuing to "pass along" the tax each time.

Taxing the Rich kills jobs. Jobs are created by the companies that the Rich own and it makes no difference to the corporation how much tax the Rich pay as the money is gone once it's paid out to the Rich owners and no longer  can create even one job. Sure the Rich might hire an extra servant (undocumented worker) or take an extra trip on the G-6 (burning tons of fossil fuel to get to Caymans), but most of that untaxed money will go to the Caymans ahead of them, where it won't ever be taxed again and will be invested in China creating jobs there.

Tuesday, February 15, 2011

Are you smarter than a fifth grader with a time machine?

Until somebody invents a time machine it will continue to be impossible to borrow from the future. You can only borrow money that exists here and now. What the right wingers really mean is that we are indenturing our children as serfs to the rich people that we owe our current debt to. Of course they really have no problem with that since they fervently believe in an iron fisted oligarchy.

The reason they are screaming now to put the brakes on the debt is to insure they are in power so that the servitude actually happens. You see if they allow liberals to be in charge somebody might point out that we really don’t need to pay back this debt to the rich oligarchy. We could simply make them pay their taxes for a change and the debt would evaporate.

Rolling back the Reagan tax cuts would probably recover the money the rich should have paid in taxes instead of loaning it to the government at interest. This would also take the parasites off the back of business as a 72% tax rate on incomes over the first few million would take away the incentive to tear apart businesses and sell them to China. This should produce a growth rate like we had before Reagan or better if properly implemented.

If this is inadequate to relieve the debt burden from our children we could impose a wealth tax to recover those ill gotten gains from the past 30 years and use the money to rebuild America. It’s probably more likely that somebody will invent a time machine before enough brain dead Americans learn to do this 5th grade math problem and take back their country from a future of debt based slavery.

Time to rotate your stock of canned goods

The UN announced today that chronic hunger now affects over a billion people in the world, this is thanks largely to the spike in wheat, corn and soybean prices on the speculative futures market. Brazil has come out solidly against price controls at the ongoing G-20 meeting in Paris. Not surprising as they are now a one of the world’s biggest exporters of grain.

France who now chairs the G-20 is taking the position that controls need to be tightened on speculators and wants to put restrictions on nations who have imposed export bans. Not much of anything is likely to be done of course. It’s not any big deal for your average finance minister if a few million more people starve to death than in a normal year. You see the level of “normal” chronic hunger runs about 850 million people every year and there is money to be made from grain speculation.

If you are a third world dictator and need to buy large amounts of grain to keep your population from revolting you might be more concerned. But when has that ever happened?     Ironically Egypt learned from deadly food riots in 2008 and was heavily subsidizing food prices but it wasn’t enough to save Mubarak as rumors of dwindling supplies spread.

Unlike during the 2008 crisis, this time so far the price of rice has remained stable. That’s why in Asia where 3 billion people depend on rice to live, they haven’t seen the upheavals becoming commonplace in the Middle East. This could change with the next global warming driven crop failure. Surprisingly many countries in Africa have been enjoying good harvests and this has kept local prices down and the scope of the crisis is much smaller than you might expect.

So despite the equivalent of the US population being added to the number in danger of malnutrition if not starvation, it could be much worse. Russia who has become a major wheat exporter will not be selling next year even if they have a good crop and the weather is not likely be cooperative everywhere in the world so the chances of building up food stocks is not good.

Contrary to the simplistic explanation of supply and demand that the free market devotees chant whenever one these totally predictable “unforeseen” crisis occur the market will not serve the public. Oh sure, a few million dead will reduce demand but in third world countries this upheaval will decrease production and not increase it.

In first world countries the farmers pretty much produce every kernel that they can already and the futures market has locked most of them into a set price so they have no financial reward from the shortage. Wall Street bankers, hedge funds and multinational corporations will make out like fat bandits however.

Americans will see food prices go up sharply despite the relatively small share that farmers see of the retail food dollar. In fact their share is half what it was 30 years ago and they weren’t doing well then. On the other hand most Americans have more than enough to eat although millions don’t. You don’t need to go the third world to find starving people. Time to rotate your stock of canned goods and take a case to the food bank.

Monday, February 14, 2011

Throw your cheese heads at the tanks

With the departure of  the “president for life” Mubarak of Egypt, labor unions across that country are out in the street now demanding improvements to their lot in life. Even the police who were a week before clubbing pro-democracy protestors are themselves protesting in the street. They are probably kidding themselves about how much better off they will be now. It wasn’t the protestors that really drove out the Mubarak family but the army in what you could call a soft coup.

At best the new order imposed by the army will spread the wealth around to a broader oligarchy and the bulk of the population will get a few crumbs, and if they are lucky some trappings of democracy with less corruption overall. Egypt’s real problems didn’t come from Mubarak but from the people that kept him in power.

Trans-national corporations and mega-banking concerns ruled Egypt through Mubarak and they aren’t going to tolerate any real reform. Not that they are likely to take action right away. They rarely do anything at the point of a gun but that is always an option (ask anybody we‘ve invaded in the last hundred years). They will of course send in the economic hit-men to inform whoever replaces Mubarak about the realities of life, just like they do with American Presidents.

Ironically the Egyptians rebelled because of the inequality between the rich and the poor while in the US that inequality is much worse. While at the same time most Americans seem to accept the notion that the middle-class is making too much money and must accept onerous cuts in pay. The horde of new Republican governors and state legislatures are gearing up impose dramatic pay cuts on state workers, destroy unions and slash government programs in the name of austerity and the preservation of tax cuts for the rich.

In Ohio the Republican Governor pledges to eliminate a staggering deficit without raising taxes but 2/3 of the state’s budget merely passes through to local governments. This means if you live in a county or city that can’t raise its own taxes to cover the Governors cuts that‘s too bad. After all, police and firefighters are luxury items you can learn to live with out. Buy yourself a gun and organize a bucket brigade, you know, pull yourself up by your bootstraps.

President Obama is on the austerity bandwagon with some mean spirited cuts in his new. Slashing heating assistance to the poor, cut aid to cities to provide clean drinking water, cut Pell grants for college, cut aid to hire teachers and for cops on the beat. A shrewd political move on Obama’s part, by cutting things the Republicans were eager to take the axe to, they must now out scrooge him. Of course if you’re shivering in your unheated apartment, afraid to drink the water while somebody is breaking down your door and the cops won’t come, oh well, you won’t need to finish that college application anyway.

In Wisconsin where the Progressive movement started over a hundred years ago, the new Republican Governor is about to effectively end all public employee unions in the state and impose drastic pay cuts. Public worker strikes will become illegal and the rightwing thug has put the National Guard on notice that any public protests are to be met with force. The army would not fire on civilians in Egypt but this isn’t Egypt.