Saturday, January 5, 2013

It makes me nuts

There are 'liberal' economists and otherwise smart people going around saying that the Fiscal Cliff victory was really a failure because it made the Bush tax cuts permanent. Some of these people must be Koch brothers plants and the rest who fall for this 'logic' are not as smart as their media image would suggest.

To begin with you're only talking about the sliver between the 250,000 Obama campaigned on and the 400,000 number that passed. Sure these people get to keep as much as an extra $4500 a year that they should pay in taxes. Most people in that bracket are at the lower end and don't see much advantage at all. It cuts $20 billion a year from revenue, that's not really going to matter. We have bigger fish to fry.

It made the Bush tax cut permanent? They didn't amend the Constitution.

Republicans got nothing they wanted. Zip, zero, nada. Sure they had to give out some pork that amounts to a few ham sandwiches at the church picnic compared to the budget. Yes they went to some really bad people, but we got our sausage.

The really big win is that Obama looks good, the Democrats look good and the economy isn't harmed one bit. The Republicans look stupider every day in the eyes of people who were inclined to think they were the smart guys in the room.

We won this, it gives us huge momentum for the next battle. We will need that advantage to get the real reform we need and to get more Progressives elected. The 2014 campaign is only a year away.

Friday, January 4, 2013

Seri, I don't like bananas

What to say when your smart phone begins to dominate your life. "Take your paws off me, you damn dirty app"!

Organized peasants with simple wooden pikes always defeated knights

There were 155,000 new jobs created in December, slightly more than the monthly average for the year. October's number was moved up slightly, and November's number was revised upward to 165,000. The right was chanting before the election that the government numbers were being faked, and would be revised downward to negatives after Obama stole the election.

There were 30,000 new construction jobs and 25,000 new manufacturing jobs, both indicating real growth. None of the new jobs came from retailing with Christmas season sales being rather flat. Healthcare created 45,000 new jobs, the aging population and the fact that tens of millions of people now get healthcare for the first time would be factors in that number. That would include people who have insurance that they are no longer afraid to use, since they can't lose it under Obamacare reforms.

This isn't fantastic job creation, but is more than twice what we need to keep up with current population growth given that we have 'negative' immigration. The average wage in the private sector crept up by six cents an hour to $19.92. The problem is that the average is being driven by the huge number of people who don't get paid very well, but are seeing modest increases, while those jobs that actually pay a good wage are being eliminated entirely. Ten states enacted modest increases in the minimum wage with most still under $8. Canada's minimum wage is around $10/hour, or slightly more in some Provinces with serious talk of increasing that to $16/hour.

Republicans haven't lost their nerve when it comes to baldfaced lying in front of the cameras. Senator Mitch McConnell got prominent face time this morning by saying that the debt ceiling is all that stops Obama from spending money that we don't have. The fact is that the Constitution stops Obama from spending money. All spending bills must originate in the House, as any Senator well knows. Obama can't spend one dime that Congress does not appropriate, and in fact most of the spending is mandatory, he can't refuse to meet the requirements of the legislation even if he want's to. Sure he can trim here and there. Obama has saved hundreds of billions by eliminating Bush crony contractors, and other deliberate waste.

Still the Republicans dominate the news cycle where they are shown fighting the deficit dragon with their mighty swords sallying forth in their shiny armor. A fairy tale of course. Republicans can't spend money fast enough, they just try to make sure it doesn't benefit anybody who isn't in the oligarchy that they've pledged their fealty to.

The simple fact is that if rich people got no special rates on dividends, interest, capital gains, and no other tax breaks us peasants never see, there would be no deficit even in this depressed economy. If corporations weren't able to offshore profits that would be another $500 billion. Besides that, we don't know how much the wealthy have in their money bins by simply evading taxes entirely, but tax haven countries have between 20 and 30 trillion dollars in their banking systems, and it's not there legally.

If the economy were up to speed we'd have little or no deficit even with the rich doing so very, very well. Another fact is that the economy would come roaring back if these parasites weren't dragging it down by hoarding money. People simply don't grasp the basic concept that money only exists to make the economy operate. Rich people don't like a booming economy. A booming economy creates competition, and the common man starts thinking he can own things. All bad for the truly rich, and they won't stand for it.

Oh, and the solution for defeating pike men? Get the peasants to fight one another, then swoop in and run down the stragglers for sport.


Tuesday, January 1, 2013

the 77%

The right is making a big deal out of the tax 'increase' on the 77% that will go into effect once Obama signs the Republican approved tax bill. This claim is based on the expiration of the 2 point cut in the Fica tax. Keep in mind that this was a Reagan tax on the working poor and middle class while the rich are exempt from paying Fica on nearly all of their income. All of it, if they can avoid wages.

Obama got a temporary cut in Fica taxes that was made up for out of general revenue for the Social Security Trust Fund in order to stimulate the economy. Fica should be reformed so that the first $20,000 is exempt while there is no upper limit. Republicans like 'flat' taxes, right? Of course they do, if they don't have to pay it. Ha ha ha ha ha (my best 'The Shadow knows' voice) 

A victory is a victory

The White House has declared victory with the Senate bill on taxes. Given that most of the Bush tax cuts end with this version they have every right to crow. It's not the FDR era reform ending the predation of the 'economic royalists' that gave us the boom times that we had until Reagan unleashed them again, but it's all good anyway. 

It's true that the threshold for higher taxes was raised to $400,000 but it also limits deductions for individuals starting at $250,000. More importantly is raises the capital gains tax rate back up to 20%, which increases the rate Mitt Romney and his ilk pay by a third. It should be four times that, but what can you do? The Senate bill will also reinstate the 'death tax' for estates over $5 million indexed to inflation, and sets the top rate at 40%, a major blow to the billionaires. Not enough, but better than the zero rate Romney promised.

For the first time in 50 years the Republicans won't be able to use the annual expiration of the Alternative Minimum Tax 'fix' that protects the middle class from a huge tax bite originally aimed at millionaires as wedge to bargain with, as it will  finally be linked to inflation. 

The so-called 'Doc' fix to Medicare that keeps compensation to doctors from being slashed by a third will be included for only one year however, allowing Republicans to mess with that again. And again, and again, no doubt.

The bill reinstates tax breaks for lower income people that were expiring, unemployment benefits and such, as well as tax breaks for small business. It even renews tax breaks for teachers who buy their own supplies.  Most importantly it includes the renewal of expired wind energy tax credits that will get us off of coal generated electricity.

To listen to the Far Right's 'strum und drang' about the betrayal of the Republicans in the Senate who voted overwhelmingly for this bill you would think their world had ended. Let's be clear, it's nothing that should be considered 'reform'. It's just way better than what were expecting. 

It still has to pass the House, and Eric Cantor is not interested in letting that happen, he really wants to be Speaker and lead the Tea Baggers back to the 'gilded age' of the 1880s. The question is what will John Boner do? The new Congress will have significantly fewer Tea Bag members. Does he have the votes to get re-elected? That is all he cares about, not being Speaker means far fewer invites to billionaire funded golf junkets. By some estimates he spends more time playing golf than on the House floor, you don't get an orange tan like his writing legislation. If Boner can get as few as 15 Republican votes and the votes of Democrats, it will pass. That would be Democracy, but that's a dirty word to Republicans.

If you actually understand economics and the history of Progressive reform should you call this a major victory? Hell no. Given the reality of American politics and the level of ignorance that holds sway in our time, is this a fantastic achievement by the Obama Administration? Hell yes. That is if it passes the House. 

At best this only rolls back the onslaught of the billionaires to the Clinton era, when they did very well in wiping out the middle class. We can't think that we have won the war for America, we just kept a bit of high ground. The real battle still rages on, and we haven't even won this skirmish yet. Keep your powder dry.  

Sunday, December 30, 2012

No surprises

It appears that the Republicans simply won't pass anything. Boner wants to keep his Speaker's gavel, so a deal is out of the question. If you thought the Dems were going to go for chained CPI that has been ruled out as Republicans offered that as a 'compromise' they could live with. Grandma can't, but they don't care.