Presidents and the Economy

So is the president responsible for the accelerating recovery? No. Can we nonetheless say that we’re doing better than we would be if the other party held the White House? Yes. Do those who were blaming Mr. Obama for all our economic ills now look like knaves and fools? Yes, they do. And that’s because they are.

via Presidents and the Economy – NYTimes.com.

Nice summation of a basic rant re: Obama.  Now that Obama has achieved all of the economic goals of the Republicans in the 2012 election one would think there would be a chastised tone coming from the folks who were so terribly wrong.

However, because our media system does a fantastically horrible job of educating the populace about reality, the GOP has actually gained seats based on the results their constituents *believe* Obama has gotten, which have very little in common with the actual results.

Anyway, it’s a fun dynamic to watch, although a tad bit frustrating from the rational actor viewpoint.

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Post RNC-Mid DNC Desktop Clearing Link Dump

Let’s get this stuff out of here…another backlog of articles that were interesting but didn’t find the time…

First up, we start in conservative media fantasy-land.

THR: Does the media tie mistakes made by Democrats to President Obama as readily as they tie Republican mistakes to Romney?

Wallace: Yes, the mainstream media is terribly unfair to Obama, and they have to stop their bias in favor of Romney.

[Note: the funny part…Wallace was joking…and doesn’t consider the network that got the highest ratings for the RNC to be part of the mainstream media.]

Next up we see what is driving ratings for Fox News.

From : Fear of a Black President

Obama is not simply America’s first black president—he is the first president who could credibly teach a black-studies class. He is fully versed in the works of Richard Wright and James Baldwin, Frederick Douglass and Malcolm X. Obama’s two autobiographies are deeply concerned with race, and in front of black audiences he is apt to cite important but obscure political figures such as George Henry White, who served from 1897 to 1901 and was the last African American congressman to be elected from the South until 1970. But with just a few notable exceptions, the president had, for the first three years of his presidency, strenuously avoided talk of race.

Next we move onto folks in black-face being using as political props…

WASHINGTON, D.C. — When GOP presidential candidate Mitt Romney visited an Ohio coal mine this month to promote jobs in the coal industry, workers who appeared with him at the rally lost pay because their mine was shut down.

The Pepper Pike company that owns the Century Mine told workers that attending the Aug. 14 Romney event would be both mandatory and unpaid, a top company official said Monday morning in a West Virginia radio interview.

We need to develop a “canary in the convention” that falls over dead when the b.s. gets too deep.

Speaking of b.s. at the convention, here’s the Rolling Stone piece that looks a bit deeper into how Mitt Romney’s Bain Capital made its start, and how it was saved in the early years by a taxpayer bailout.

And this is where we get to the hypocrisy at the heart of Mitt Romney. Everyone knows that he is fantastically rich, having scored great success, the legend goes, as a “turnaround specialist,” a shrewd financial operator who revived moribund companies as a high-priced consultant for a storied Wall Street private equity firm. But what most voters don’t know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America’s top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.

Read more: http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz25c4gDbu1

In the background, quietly crying, you’ll find our environment.

Yesterday was August 28th 2012. Remember that date. It marks the day when the world went raving mad.

Three things of note happened. The first is that a record Arctic ice melt had just been announced by the scientists studying the region. The 2012 figure has not only beaten the previous record, established in 2007. It has beaten it three weeks before the sea ice is likely to reach its minimum extent. It reveals that global climate breakdown is proceeding more rapidly than most climate scientists expected. But you could be forgiven for missing it, as it scarcely made the news at all.

It also appears that Paul Ryan is quickly creating lots of jobs in various fact-checking departments…

•Accused President Obama‘s health care law of funneling money away from Medicare “at the expense of the elderly.” In fact, Medicare’s chief actuary says the law “substantially improves” the system’s finances, and Ryan himself has embraced the same savings.

•Accused Obama of doing “exactly nothing” about recommendations of a bipartisan deficit commission — which Ryan himself helped scuttle.

•Claimed the American people were “cut out” of stimulus spending. Actually, more than a quarter of all stimulus dollars went for tax relief for workers.

•Faulted Obama for failing to deliver a 2008 campaign promise to keep a Wisconsin plant open. It closed less than a month before Obama took office.

•Blamed Obama for the loss of a AAA credit rating for the U.S. Actually, Standard & Poor’s blamed the downgrade on the uncompromising stands of both Republicans and Democrats.

And there’s more….

The next statement Ryan made was that in 1980 “330,000 businesses filed for bankruptcy. Last year, under President Obama’s failed leadership, 1.4 million businesses field for bankruptcy.”

This is not true. According to American Bankruptcy Institute, under Carter 331,264 businesses and non-businesses filed for bankruptcy. That number includes not just businesses, but personal bankruptcies as well. In 1980, there were 43,694 business bankruptcies and 287, 570 non-business bankruptcies.

Ryan also got it wrong with regard to the number of business bankruptcies last year. In 2011, there were 1, 410, 653 total bankruptcies. Of that number 47,806 were business bankruptcies and 1,362,847 were non-business bankruptcies.

and just to keep it in perspective, Paul Ryan is being sold as the gold standard in Republican honesty and integrity when it comes to numbers.  Really.

Here’s a bit of the “liberal” media conspiracy…in that we have an actual liberal calling out the media for keeping certain things from the eyes of the public.

When Mitt Romney walked down the aisle toward the stage Thursday night, among the people whose hands he shook was the conservative billionaire and major political donor David Koch. But it was a moment missed by the tens of millions of viewers at home. While Democracy Now! was there on the floor and captured the handshake on video, the networks cut away just before the handshake to show footage of two enthusiastic young women supporters and then an overhead shot of the convention center.

You can even see Mitt’s face light up when he sees the Koch.

Heading back to that Rolling Stone story about how firms like Bain avoid paying taxes on their income…the NY State Attorney General (the one after the whore-monger) is now looking into the practice of treating wealthy and connected people’s labor as if it were capital (and thus getting a 20% tax break, from 35% down to 15%).

The New York attorney general is investigating whether some of the nation’s biggest private equity firms have abused a tax strategy in order to slice hundreds of millions of dollars from their tax bills, according to executives with direct knowledge of the inquiry.

The attorney general, Eric T. Schneiderman, has in recent weeks subpoenaed more than a dozen firms seeking documents that would reveal whether they converted certain management fees collected from their investors into fund investments, which are taxed at a far lower rate than ordinary income.

According to financial statements, Bain partners saved more than $200 million in federal income taxes and more than $20 million in Medicare taxes.

[full story]

Thus goes the “secret to his success”.

And finally we see a Business Insider story that hits the nail on the head.

Lots of things are wrong with the economy, but the main problem can be summed up with two simple facts:

  • Corporate profits as a percent of the economy are at an all-time high
  • Wages as a percent of the economy are at an all-time low

The following charts clearly illustrate that problem.
Read more: http://www.businessinsider.com/henry-ford-salary-increase-2012-8#ixzz25cGRYdou

I repeat…

  • Corporate profits as a percent of the economy are at an all-time high
  • Wages as a percent of the economy are at an all-time low

This is the natural results of 30+ years of supply-side economics.

History of Supply Side Experiment

Here we see the real world effect of “supply side” economics.

And there you have it.  Links dumped.

Oh…one final note…it appears that some of the rich, if eaten, might actually sustain us for a while.  Just a thought…

Just in case you were beginning to think rich people were deeply misunderstood and that they feel the pain of those who are less fortunate, here’s the world’s wealthiest woman, Australian mining tycoon Gina Rinehart, with some helpful advice.

“If you’re jealous of those with more money, don’t just sit there and complain,” she said in a magazine piece. “Do something to make more money yourself — spend less time drinking or smoking and socialising, and more time working.”

Yeah, let them eat cake.

Rinehart made her money the old-fashioned way: She inherited it. Her family iron ore prospecting fortune of $30.1 billion makes her Australia’s wealthiest person and the richest woman on the planet.

 

When does Paul Ryan support multiple stimuli and sending free money to every American? Take a wild guess…

Paul Ryan Defended Stimulus — When George W. Bush Wanted It In 2002 (VIDEO) – The Huffington Post http://www.huffingtonpost.com/mobileweb/2012/08/19/paul-ryan-bush-stimulus_n_1803761.html?icid=hp_politics_art_more

“What we’re trying to accomplish today with the passage of this third stimulus package is to create jobs and help the unemployed,” Ryan said, in comments unearthed by MSNBC’s “Up with Chris Hayes” and provided to HuffPost. “What we’re trying to accomplish is to pass the kinds of legislation that when they’ve passed in the past have grown the economy and gotten people back to work.”

United States Total Employment By President 1977-2012 (Misleading Statistics Lesson)

I was recently going about my daily business when I was confronted on the Facebook with the following chart…

"Reason" Magazine Net Jobs Analysis...From the Mercatus Project of George Mason University*

Taking these raw numbers without any context leaves a bit to be desired on the “providing insight” part of statistical analysis.

During the ensuing discussion, I noted a couple of things…first that 5 months remain in Obama’s first term. At the current roughly 200K-job/mo pace we are gaining, that’s another 1M on his tally.  As we’ll see in a moment, looking at *how* these numbers came about can be quite enlightening.

As noted in the charts, all raw data is provided from here.

We’re going to start with Jimmy Carter.  In the following analysis, we are calling the inaugural month the first one they are responsible for, going through December of their last year.   A quick comparison shows this to be very close to how Veronique de Rugy of the Mercatus Center* did the original chart.

Non Farm Employment under Carter, Seasonally Adjusted

Non Farm Employment under Carter, Seasonally Adjusted, 1977-1980

From here you can see something that will be a consistent theme in the following analysis…a stagnant job market causing issues for a sitting President.  Employment peaked in March, 1980, having moving little since the previous summer.  The long, hot year and rising unemployment was too much for voters, and a change was made.

Enter the Reagan…

Total Employment Reagan, Seasonally Adjusted, 1981-1988

Total Employment Reagan, Seasonally Adjusted, 1981-1988. One can see how Reagan faced initial skepticism, but has gained long-term respect.

Here we see Carter’s “malaise” lasting well into 1983.  The lowpoint in unemployment, to Reagan’s great fortune, came late in 1982.  By the time the election rolled around in 1984, everything appeared to be on track.  Employment continued to expand throughout the rest of his term.  Then we had to pay for it, and the business cycle shifted again.

Total Employment, Bush the Elder, Seasonally Adjusted, 1989-1992

Total Employment, Bush the Elder, Seasonally Adjusted, 1989-1992. Here we see Bush the elder’s problem, employment peaking two and half years prior to the election.

Bush the Elder saw the peak of the Reagan “what’s debt?” economic expansion, and watched as nearly 2M jobs evaporated after peaking in Jun of ’90. Economic recovery in job form came only in the last few months before the 1992 election, not nearly enough to stop the new kid on the block from stealing heart and minds and electoral votes.

Next we get to *see* what the longest and largest and most stable economic expansion in U.S. history like…in bar graph form.

Total Employment, Clinton, Seasonally Adjusted, 1993-2000

Total Employment, Clinton, Seasonally Adjusted, 1993-2000. It really is pretty impressive, standing there all big and growing like that, Mr. President.

Like all the other graphs, I’ve marked the low and high point in employment during Clinton’s term. That’s how it’s done, folks.  Really can’t ask for more.  Well…maybe a bit less disgracing the Office of the President.  He did, however, get impeached for that.  Not sure if it was the peace and prosperity or the blowjob that got him impeached, but something sure made the Republicans mad.  It didn’t stick in the Senate, but did doom his VP.

Regardless, after so much peace and prosperity, we decided it was time for a change.   And oh what a change it was.

Total Employment, Bush the Lesser, Seasonally Adjusted, 2001-2008

Total Employment, Bush the Lesser, Seasonally Adjusted, 2001-2008. Bush was all over the map. First losing 3M jobs, then finding 9M building houses, then losing 4M in a year after the bust.

Oh George.  What can we do about this one.  If you want to see what a bursting real estate bubble looks like?  Click on that one.  First we see the extended era of peace end on 9/11.  Then we see the prosperity depart as we marched to war, hitting the  low employment point just as the mission in Iraq was “accomplished.”    Then we went on an easy-credit mortgage-fueled home-building binge, topping out with the greatest number of working Americans ever reported, 138,023,000 in January 2008.

By the end of 2008, 4M of those jobs had disappeared, and the Great Recession wasn’t nearly done.

Total Employment, Obama, Seasonally Adjusted, 2009-2012

Total Employment, Obama, Seasonally Adjusted, 2009-2012. Here we see the second half the Great Recession, with 4M more jobs going away in Obama’s first year. Since then there’s been a steady grind upwards, as we work to recover lost ground.

And this brings us up to the present data (Jul 2012).  Here we see the graphic and dramatic employment results of the Great Recession.  Four Million Jobs gone in the first year, reaching Obama’s lowpoint in February of 2010.  Since then (as the “failed” Stimulus package was implemented) we’ve seen steady employment gains over the intervening two years, finally within grasping distance of where from we started.

To wrap the whole thing together…here’s the whole thing together…

Total_Employment_1977_2012

Total_Employment_1977_2012. All of it. Together.

Here we see each and every year laid out side by side.  Now longer term business cycles become more apparent, and we see the huge dip created by the crash of 2008.

All in all I wanted to provide this analysis because I found the original chart to be so incredibly lacking in context as to be misleading.

* the Mercatus Project is funded (to a noticeable degree) by the Koch Bros, who have used some of the $100M they pledged to unseat the current President producing graphs like this…which don’t tell the whole story.  Often telling so little of the story, they might as well be lying.

"Reason" Magazine Net Jobs Analysis...From the Mercatus Project of George Mason University*

Taking these raw numbers without any context leaves a bit to be desired on the “providing insight” part of statistical analysis.

Obviously the solution is more Tax Cuts, right Mitt?

Pa. Mayor Cuts City Workers’ Pay to Minimum Wage – ABC News 

Unions representing firefighters, police and public-works employees also filed a pair of federal lawsuits against Mayor Chris Doherty and the city that alleged violations of labor law and due-process rights. Doherty last week ignored a court order and cut the pay of about 400 city workers to the federal minimum wage of $7.25 per hour.

The Democratic mayor said it was all the cash-strapped city of more than 76,000 could afford, promising to restore full pay once finances are stabilized. “It’s incredible,” the unions’ attorney, Thomas Jennings, said Tuesday. “I’ve never had a public official just say, ‘I’m not going to obey a court order. I’m not even going to try. He can’t tell me what to do.'”

Finally putting those unions in their place, it would seem. I’m sure paying police and firemen minimum wage will lead to a thoroughly functioning society.

Republicans in Congress shift from not passing jobs bills to try to extend largest tax cut in history by calling it tax hike

WASHINGTON – Republicans are calling it “Taxmageddon,” the big tax increase awaiting nearly every American family at the end of the year, when a long list of tax cuts are scheduled to expire unless Congress acts. It would be, GOP leaders in Congress say again and again, “the largest tax increase in American history.”

Except it wouldn’t be, not when you take into account population growth, rising wages, and most importantly, the size of the U.S. economy. When those factors are taken into account, the largest tax increases were those imposed to help pay for World War II — back when the U.S. raised additional revenue to pay for wars instead of simply borrowing. Nevertheless, it is an exaggeration that has proved too tempting for top Republicans in Congress:

_ “Any sudden tax hike would hurt our economy, so this fall — before the election — the House of Representatives will vote to stop the largest tax increase in American history,” House Speaker John Boehner, R-Ohio, said in a May 15 speech in Washington.

_ “Before we leave for August, I expect to schedule a vote on legislation preventing the largest tax increase in history,” House Majority Leader Eric Cantor, R-Va., wrote in a recent memo to fellow House Republicans.

_ “Millions are unemployed and millions more are underemployed and the country is facing the largest tax hike in history at the end of the year,” Senate Republican Leader Mitch McConnell said Thursday in a speech on the Senate floor.

Anyone in the Republican party honest enough to recall how these tax cuts, originally, were both temporary and designed as stimulus? No….ok…just checking.

Anyone in the media going to call out these guys on camera about the reality of the extenssion?  No…ok…just checking.

Before the 1940s, the individual income tax applied to only a small percentage of the population. By the end of war, the income tax was levied on most working people, with a top tax rate of 94 percent on income above $200,000.

By comparison, the current top rate is 35 percent, on taxable income above $388,350. If Congress does nothing, the top rate would return to 39.6 percent next year — the same rate that was in place for most of the 1990s.

In dollars, next year’s tax hikes would be the biggest. But the size of the economy is 80 times bigger than it was in the 1940s, which is why economists usually measure taxes and government spending as a share of the U.S. economy.

The 1942 tax increase represented more than 5 percent of the U.S. economy, as measured by the gross domestic product, or GDP. The 1941 tax increase was 2.2 percent of GDP, according to a Treasury Department paper published in 2006.

Next year’s looming tax increase would represent 2.6 percent of GDP — a huge tax hike but not the biggest.

Measured another way, the 1942 tax hike increased federal revenue by a whopping 71 percent, according to the Treasury Department paper. The 1941 tax hike increased federal revenue by 32 percent.

By comparison, next year’s potential tax hike would increase federal revenues by 16 percent, according to CBO.

Funny how when we actually use taxes to pay for wars it leads to “Great” generations.   But when we use tax cuts to pay for wars, it’s obviously domestic spending that is causing the problem.   The mind boggles, but when these guys keep getting away with spouting this b.s., there’s no reason to stop.

FACT CHECK: Republicans exaggerate size of ‘Taxmageddon.’
StarTribune.com
http://www.startribune.com/politics/national/158408015.html

CBO: Congress doing Nothing is the Best Tax Scenario

According to a new report from the non-partisan Congressional Budget Office (CBO), the United States federal government debt is projected to peak in 2015 and then drop substantially over the coming decades, all by itself if Congress can just sit on its hands and stop handing out tax breaks to individuals and corporations. Unfortunately, Republicans are bent on extending all of the Bush tax cuts, which the CBO found earlier this year will add $5.4 trillion to the debt in the next decade alone. And the Democrats proposals aren’t much better. President Obama’s proposal to extend the tax cuts for the first $250,000 a family makes and the first $200,000 a single person makes would actually result in an extension of 78% of the Bush tax cuts and would cost $3.5 trillion in the next decade. (This is still preferable to House Democratic Leader Nancy Pelosi’s proposal to extend the tax cuts for the first $1 million of income a family makes.) Congress should, however, increase the budget deficit temporarily if the result will be greater economic growth. But extending the Bush tax cuts would provide very little boost in economic output (compared to proven measures like increased unemployment insurance, food stamps or other types of spending programs).

I’m all for letting the whole shebang expire, go back to the tax rates we had when the budget was balanced…and move forward from there. In every way, form, and fashion the Bush cuts have not worked…they need to die…soon. — Should Congress Just Go Home? http://ctj.org/taxjusticedigest/archive/2012/06/should_congress_just_go_home.php

Romney campaign takes credit for Auto Bailout Romney opposed

One of Mitt Romney’s top advisers said Saturday that President Obama’s decision to bailout Chrysler and General Motors was actually Romney’s idea.

“[Romney’s] position on the bailout was exactly what President Obama followed. I know it infuriates them to hear that,” Eric Fehrnstrom, senior adviser to the Romney campaign, said.

“The only economic success that President Obama has had is because he followed Mitt Romney’s advice.”

The claim appears to be a shift from Mitt Romney’s November 2008 op-ed in The New York Times, headlined, “Let Detroit go bankrupt.”

Expect a lot of this.  Romney’s core supporters are two groups that will believe anything: people who hate Obama and Mormons.  Hence the Romney campaign is under the impression they can say pretty much anything and expect a good portion of their supporters to believe it wholeheartedly.

As to the general election, the hope is to sling so much mud the cynics stay home and the low-information folks get fooled in sizable numbers.

“Romneality” is what I call the strategy, although I don’t think it will work…blatant b.s. like in this story only fools a small portion the populace.  Combing John Kerry’s charisma with George W. Bush’s policies doesn’t seem like a winning combination in any sense.


Romney campaign aide claims auto bailout was Romney’s idea – The Hill’s Ballot Box
http://thehill.com/blogs/ballot-box/presidential-races/224371-romney-campaign-claims-auto-bailout-was-his-idea?utm_campaign=briefingroom

The Silly Season of Political Paranoia (and a dose of something else)

It seems as if a certain political sentiment has fully metastasized into the form it will take for the next 7 months.  It goes something like this…as Krugman notes on point..

And it’s not just gas prices, of course. In fact, the conspiracy theories are proliferating so fast it’s hard to keep up. Thus, large numbers of Republicans — and we’re talking about important political figures, not random supporters — firmly believe that global warming is a gigantic hoax perpetrated by a global conspiracy involving thousands of scientists, not one of whom has broken the code of omertà. Meanwhile, others are attributing the recent improvement in economic news to a dastardly plot to withhold stimulus funds, releasing them just before the 2012 election. And let’s not even get into health reform.

Why is this happening? At least part of the answer must lie in the way right-wing media create an alternate reality. For example, did you hear about how the cost of Obamacare just doubled? It didn’t, but millions of Fox-viewers and Rush-listeners believe that it did. Naturally, people who constantly hear about the evil that liberals do are ready and willing to believe that everything bad is the result of a dastardly liberal plot. And these are the people who vote in Republican primaries.

But what about the broader electorate?

Now before you think any of this (or the many, many other examples) are hyperbolic statements about what is passing for “policy discussion” among the dedicated Republican primary voters…here’s an update on what they think is going on…

Seriously…that’s an official Santorum ad.  Wild stuff….BTW…DID YOU NOTICE HOW CRAZY THIS IS?

About :40 seconds in…with the Iranian Boogeyman on the screen…they cut in a shot of the President of the United Stated.

Headshot of Obama interspersed into video of Iranian President

That’s how craaaazy these folks are.  Don’t believe me yet?  Here’s another one, of a thousand, of other examples.

And one that more directly affects real people…

On Monday, the Republican dominated Tennessee Senate passed an anti-evolution bill by a vote of 24-8. The bill, known as HB 368, is sponsored by Republican Senator Bo Watson and “provides guidelines for teachers answering students’ questions about evolution, global warming and other scientific subjects,” according to Knox News,  ”The measure also guarantees that teachers will not be subject to discipline for engaging students in discussion of questions they raise, though Watson said the idea is to provide guidelines so that teachers will bring the discussion back to the subjects authorized for teaching in the curriculum approved by the state Board of Education.” The bill basically encourages teachers to present scientific weaknesses of “controversial” topics.

[full story]

It’s come to the point of people just flat out not believing what is happening….which while not completely abnormal in political season…has gotten so bad that basic math has become partisan politics.

Thus making rational cost benefit analysis of said policies (while factually true) completely irrelevant.

Beginning in January 2011, the payroll tax withheld from employee paychecks was temporarily reduced to 4.2 percentage points from 6.2 percentage points. The cut was scheduled to expire at the end of 2011, but Congress has continued it through the end of 2012.

My calculationslast year, based on the proposed cut of 3.1 percentage points, suggested that the payroll tax cut “could raise employment by at least a million, albeit the duration of job creation is related to how long the tax cut lasts.”

On a seasonally adjusted basis, payroll employment was 130.2 million at the end of 2010, just before the payroll tax cuts took effect. As of last month, payroll employment was up 2 percent, or 2.5 million, to 132.7 million.

[full story]

And dealing with a growing and more well understood problem that much more difficult…

One of the main changes is the inclusion of more data from the Arctic region, which has experienced one of the greatest levels of warming.

The amendments do not change the long-term trend, but the data now lists 2010, rather than 1998, as the warmest year on record.

The update is reported in the published in the Journal of Geophysical Research.

[full story]

And leading to some absolutely tragic decision making abilities…

It seems that this old lady believed many of the deliberate lies which were being put forward by the Fox News anchor, lies directed at President Obama and at his health care policy. She appears to have thought that if she had accepted medical care, following her fall, her medical information and her money would have been sent to Islamic extremists. This is of course completely false, but a reasonable deduction from the lies told by Fox News.

[full story]

Which happens while the system keeps chuggin’ along…

National income gained overall in 2010, but all of the gains were among the top 10 percent. Even within those 15.6 million households, the gains were extraordinarily concentrated among the super-rich, the top one percent of the top one percent.

[full story]

And paying the low inegrity-bright smile types to say whatever it takes to keep it coming…

In February, Common Cause wrote to House Majority Leader Eric Cantor, asking for an explanation about an apparently unreported $1,350 gift from the American Legislative Exchange Council (ALEC) in 2009. Cantor’s office immediately responded, claiming our inquiry was without foundation, but last week his office quietly amended his financial disclosures to include the gift from ALEC.

At that time, I wrote about Cantor’s failure to disclose:

‘ALEC, the so-called “free market, small government” lobby group underwritten by some of the nation’s largest corporations, reported in its tax filings for 2008 and 2009, making “cash grants” to the recipients of several annual awards. Common Cause has identified 22 legislators who received ALEC awards in those two years, including Rep. Cantor, who ALEC records indicate received $1,350 in 2009 as part of their Thomas Jefferson Freedom Award.’

Cantor responded within hours, saying no cash changed hands, but that he received a bust of Thomas Jefferson from ALEC, pictured above. But, under House Ethics Rules this type of award can only be received by a Member of Congress if it is disclosed, which Cantor did not do. This appears to be a clear ethics violation, and we have asked the Office of Congressional Ethics to investigate. Prompted by Common Cause, Cantor has now very quietly amended his 2009 Financial Disclosure Report to include the ALEC gift. He also amended his 2010 report to include another bust given to him by the Associated Builders and Contractors trade group. We had no idea about this second award, but now we do.

[full story]

Even as another does the math, and realizes that we simply cannot go on like this…

However, Dodd–Frank does not eradi- cate TBTF. Indeed, it is our view at the Dallas Fed that it may actually perpetuate an already dangerous trend of increasing banking industry concentration. More than half of banking industry assets are on the books of just five institutions. The top 10 banks now account for 61 percent of commercial banking assets, substantially more than the 26 percent of only 20 years ago; their combined assets equate to half of our nation’s GDP. Further, as Rosenblum argues in his essay, there are signs that Dodd– Frank’s complexity and opaqueness may evenbe working against the economic recovery. In addition to remaining a lingering threat to financial stability, these megabanks signifi- cantly hamper the Federal Reserve’s ability to properly conduct monetary policy.

They were a primary culprit in magnifying the financial crisis, and their presence continues to play an impor- tant role in prolonging our economic malaise.There are good reasons why this recovery has remained frustratingly slow compared with periods following previous recessions, and I believe it has very little to do with the Federal Reserve. Since the onset of the Great Recession, we have undertaken a number of initiatives— some orthodox, some not—to revive and kick-start the economy. As I like to say, we’ve filled the tank with plenty of cheap, high-octane gasoline. But as any mechanic can tell you, it takes more than just gas to propel a car.

It is imperative that we end TBTF. In my view, downsizing the behemoths over time into institutions that can be prudently managed and regulated across borders is the appropriate policy response. Only thencantheprocessof “creativedestruction”— which America has perfected and practiced with such effectiveness that it led our country to unprecedented economic achievement— work its wonders in the financial sector, just as it does elsewhere in our economy. Only then will we have a financial system fit and proper for serving as the lubricant for an economy as dynamic as that of the United States.

Read more: http://www.businessinsider.com/dallas-fed-calls-for-breakup-of-big-banks-2012-3#ixzz1qF2hXi7T

And so the desktop is clear…to watch the world for another couple weeks.

Iran, Oil, Israel, the NDAA, and the 2012 Election : A Primer

Let’s start this off with a curious conjunction of news articles as presented by the Google News algorithm.

That's why they do it

That's why they do it

And I also ran across this article over on Juan Cole’s site.

Will his New Sanctions on Iran Cost Obama the Presidency?

Posted on 01/03/2012 by Juan

A sharp drop in the value of the Iranian currency as a result of new American sanctions may sound like good news to hawks in the US. But actually this development may signal ways in which Americans will also be harmed, and Obama may have put a second term in jeopardy, cutting off his nose to spite his face.

An amendment to the National Defense Authorization Act signed by President Obama this past weekend will seek to slap third party sanctions on countries and enterprises that deal with Iran’s central bank. It will go into effect this summer. In effect, the law says that if you buy Iranian petroleum, you cannot do business with American financial institutions. Since the United States is still over a fifth of the world economy, and most institutions with capital need to deal with it, the hope of Congress is that Iran will be left without customers.

The measure, pushed by the American Israel Public Affairs Committee on behalf of the government of Israeli Prime Minister Binyamin Netanyahu, might well be a trap for Obama. In an election year, he could not refuse to endorse new sanctions against Iran (the Republican candidates in Iowa are practically running on promising that if elected they will launch a war on Iran; and they are lambasting the president as weak on this issue).

[full story]

There’s a couple of interesting things about this line of thinking and Cole explores the direct results on this in his post.

Those two factors, the likelihood of rising Asian demand for petroleum in 2012, and investor nervousness about how tensions with Iran will play out, will probably keep petroleum prices at historically high levels in 2012, and some analysts believe that there could be a return to the overheated pricing of 2008 before the crash.

It would be much better for the American economy if prices sank back down to the levels of only a few years ago, of $50 a barrel or less.

If the Congressional sanctions actually worked, and took Iran’s roughly 2.5 million barrels a day in exports off the world market, that would take out 80% of Iran’s export income and deeply hurt the regime. But it would also send world petroleum prices through the stratosphere, deeply harming Western economies already teetering on the edge.

The NDAA (National Defense Authorization Act for Fiscal Year 2012) which has people all a-twitter about the AUMF made real, also includes the language that essentially declares economic warfare with Iran.  You know how all those little dollars say “Federal Reserve Note”…well…when it comes to being the one that redeems property, one tends to have some control over who gets to officially use it for business.   The NDAA (of FY 2012) essentially says that anyone who uses our money, can’t use it to buy their oil (or anything else they sell).

This was added to the NDAA by a flake.  Literally, Jeff Flake (R-AZ).

Washington, D.C., Dec 9, 2011 – Republican Congressman Jeff Flake, who represents Arizona’s Sixth District, today along with 22 House Members sent a letter to House Armed Services Committee Chairman Buck McKeon (R, CA) and Ranking Member Adam Smith (D, WA) urging them to retain during conference negotiations with the Senate provisions in the National Defense Authorization Act (NDAA) that would levy sanctions on the Iranian financial sector, including the Central Bank of Iran, in an effort to severely limit the funding sources available to the Iranian regime for use in developing nuclear weapons.

You will be unsurprised to find out that Flake was one of the 81 Congressmen (only 21%) who did, in fact, take an all expense paid weeklong [edit 9 day] vacation to calm and relaxing Israel during the summer break.

Don’t worry though, no taxpayer money was (directly) used to pay for this.  Lobbyists covered the whole thing.

Sponsor(s) – American Israel Education Foundation
Dates – August 18, 2001 – August 26, 2001 (9 days)
Location(s) – Israel 

Purpose – Educational mission
Notes – Spouse Cheryl Flake accompanied. Other costs not specified.

Travel Cost – $7,183.20
Lodging Cost – $2,023.70
Meal Cost – $1,391.30
Other Cost – $986.00
Total Cost – $11,584.20

Additional family members – Yes

[full data on the Flake]

And just so you get an idea of how much of a flake this Flake guy is…

Flake was first elected to what was then Arizona’s 1st congressional district in 2000, after Republican incumbent Matt Salmon stepped down in honor of a self-imposed term limit. The district was then renumbered to the 6th district as Arizona gained two Congressional seats due to the results of the 2000 census.

In his campaign in 2000, Flake had pledged to serve no more than three terms in Congress, leaving no later than January 2007, but in early 2005, shortly after being elected for a third time, Flake announced that he had changed his mind and would in fact run for re-election in 2006. “It was a mistake to limit my own terms,” Flake said.

[from the wiki]

So…long story short…get ready for much higher gas prices this summer and the Republicans constantly blaming Obama for it.   There’s a decent chance that the actual reason for the rise in prices will not be a constraint in supply, but instead an increase in middleman costs caused by the sanctions leading to a run-up in the price of oil…if not a full-on closing of the Straight of Hormuz by Iran (if the sanctions work too well  and they realize they are fucked either way.)

Whatever the reason, higher oil prices (even if only caused by the threat of increased hostilities…raising risks raises prices) will slow the already crawling economic recovery in the U.S., leaving it, most likely, continuing to sputter along like an old car running low on…well…gas.

What I find really funny here (funny in an ironic way), is that while Obama will be in actuality taking a political hit from the slowing economy from increased oil prices, he’s also going to continue to be hit for “throwing Israel under the bus” even while taking the economic hit that comes with directly targeting the money supply of Iran.

Pretty funny, if you think about it.

I still don’t think it’s going to be enough to convince more Americans to vote for Romney than Obama, however.

The election is going to be literally a Wall Street Tycoon vs a Community Organizer.

Ask your average Tea Party member which one of those they support (using those labels), and do it while they are community organizing for even greater lulz.

House GOP Walks Out Rather Than Vote on Payroll Tax Cut

Take a look….make the pledge…then walk off…ignoring the people’s business.

The Republicans then turned around and immediately started lying about what they did.

All in a fight to give more breaks to Big Oil.

UPDATE: Even the WSJ is calling b.s. on this…even while doing so in a b.s. way.

GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter

Had to cut that off mid-derp, as the WSJ editorial board tends to include utter b.s. even when pointing out the obvious.   Obama is not really an “election-year tax cutter”, as this tax cut went into effect last year as part of the successful stimulus.  It is, in face, because of this success, Republicans are now working to undercut it.

It should also be noted that, unlike the original Bush Tax Cuts, Republican are now insisting this tax cut (which goes to workers) will reduce government revenue and therefore needs to be paid for.  This is a complete 180 from their stance about tax cuts for the wealthy (aka “job creators”), as Republicans claim those pay for themselves.   This is probably the most base and obvious lie in the Republican quiver, and they whip different versions of it out every time the subject comes up.