Saturday, January 31, 2015

The Rise and Fall of the Middle-Class

Yesterday Paul Krugman wrote that there are people (who he calls "Very Serious People") that dismisses the austerity/stimulus debate as “simplistic” and that Keynesian concerns are “crude”. He said, "There were people like that during the Great Depression too — dismissing as naive any notion that you could put the unemployed back to work just by spending more."

World War II required massive government spending by the U.S. (aka "stimulus") which not only won the war, but took America out of the Abyss of the Great Depression. It also created the greatest middle-class that the World had ever known at the time.

The "Aging Work Force" Myth Debunked

Finally!

The Baby Boomers are Vindicated!

Koch: The Real Thing

A national political operation, organized by the multi-billionaire Koch brothers, is committing nearly a billion dollars ($889 million) to the looming 2016 presidential race in an unprecedented effort to help boost conservative/libertarian/Tea Party candidates. What You Want is a Koch.

Avoiding Taxes for Dummies

(* Editor's Note: This post doesn't cover tax avoidance by moving funds to offshore banks because I've already written on this subject many times before.)

James Kwak hit the nail(s) on the head about our corrupt tax system that mostly benefits the very rich. Here are three tax avoidance strategies that he brings to light --- and says these three tax schemes top his list for the ones most in need of tax reform.

Can Unemployment Benefits Cause Joblessness?

This is an old story that won't go away — even though federal extended unemployment benefits are no longer available for the long-term unemployed, and most likely, won't ever be again (unless the country faces another serious economic crisis like we did during the last Great Recession ... and only if Democrats hold Congress).

Tuesday, January 27, 2015

Will 2015 be the Year of the Beast?

In an article at the New York Times titled Budget Forecast Sees End to Sharp Deficit Declines, they referenced a new CBO report titled The Budget and Economic Outlook: 2015 to 2025.

In their article the New York Times writes: "The forecast might not change President Obama’s policy proposals, but it will fortify a Republican Congress’s resolve to pass budgets this spring that would fundamentally reorder health care spending, preserve tough spending caps and force Washington to at least look at Social Security. Democrats will say those spending plans are contradicted by efforts to overhaul the tax code without producing any more tax revenue."

Then they quote Senator Michael B. Enzi (R-Wyoming), the new chairman of the Senate Budget Committee: “The past will catch up to us no matter how fast we run from it."

Monday, January 26, 2015

Republicans Fighting for the Middle-Class

According to the Social Security Administration (as of 2013), 50% of all wage earners had annual net incomes of $28,031 or less (the median wage). Two people working and earning this "median wage" (and living together) would have a net household income of $56,062 a year. The annual "median household income" is currently about $53,880 a year — because most households have more than one income.

Sunday, January 25, 2015

Report: Video Games Caused Decline in Labor Force

Video games cause unemployment?

In an earlier post I argued that the decline in the labor force was mostly due to young adults not being able to find work, and that's why so many people are "not in the labor force" — and that it wasn't mostly because of retirees or disabled people leaving the work force, or because more people are going to school.

In recent testimony before the U.S. Senate Committee on Finance, Professor Robert E. Hall (Hoover Institution, Department of Economics, Stanford University) concluded that "the U.S. labor market is back to normal in terms of unemployment, job-finding and recruiting." I'm sure if Herbert Hoover were alive today, he'd be happy to hear that. And now that the Republicans control Congress, maybe they'll take full credit for all this wonderful news.

But then Professor Hall goes on to say in his testimony:

Saturday, January 24, 2015

Economic Insanity

"There is a fifth dimension beyond that which is known to man. It is a dimension as vast as space and timeless as infinity. It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man's fears and the summit of his knowledge. This is the dimension of imagination. It is an area we call the Twilight Zone."

This is where I believe many economists, politicians and policymakers exist — in a fifth dimension — because here's what I could never understand...

Outrage of Week (Tea Party News)

Via the L.A. Times: Senator Joni Ernst, the Tea Party darling, who hates all government and hates lazy people on food stamps...Senator Joni Ernst, the Koch brothers puppet, who gave that silly response to President Obama's State of the Union address...It was she who was on the government dole from 1995 through 2009. Despite her campaign pitch that her parents "taught us to live within our means", her family members collected $463,000 in federal farm subsidies. (They hate “government” except when they are the government. They hate government, but will always take from the government. These people should all be flogged 1,000 times for their evil hypocrisy.)
http://www.latimes.com/business/hiltzik/la-fi-mh-sen-joni-ernst-learned-20150123-column.html 

* The other links below, we might call information overload (just a few things I've recently read and found interesting...

Friday, January 23, 2015

15 Years of Bad Trade Deals

This was from yesterday, on three major cable TV news networks:

"Breaking News! New England Patriots quarterback Tom Brady --- the prime suspect in Deflate-Gate --- is about to hold a press conference! --- Tune in after the commercial break!"

I like football season as much as anybody else — especially when it gets closer to Superbowl Sunday. But is it possible to get the mainstream media to spend more time covering more newsworthy subjects ... such as the offshoring of American jobs? (Rather than wasting our unemployed and idle time reporting on deflated footballs?)

(* This is a tale of two charts. You can read the tale now, or just skip to the bottom for the two charts.)

Worshipping the Rich's Luck

Chris Dillow at The Angry Bear: Those of us who are in the global 1% are apt to under-estimate our good fortune. There is, in fact, quite robust evidence from other contexts that we tend to under-rate luck and over-rate skill and causality...If we over-rate causality and under-rate luck, we will exaggerate the extent to which the wealthy deserve their fortune. As a result:

Thursday, January 22, 2015

David Cay Johnston: Social Security Works

Talking Points Memo posted that “The 80-Year Conservative War on Social Security Is Back for More,” noting that conservatives have virulently opposed Social Security since its inception. President Reagan had signed a bill that slowly increased the retirement age, while also boosting payroll tax rates, and opening the door for failed privatization efforts by President George W. Bush.

Now, with a Republican majority in Congress, Social Security is facing further attacks.

Wednesday, January 21, 2015

Obama in SOTU Speech on Trade

21st century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world's fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That's why I'm asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren't just free, but fair.

(Obama was talking about the pending TPP and TAFTA trade agreements.)

The Huffington Post writes:

Obama Ignores Third Rail in SOTU Speech

"The Third Rail" is a metaphor for any issue so controversial that any politician who dares to broach the subject will invariably suffer politically. The metaphor was first used by Speaker of the House Tip O'Neill during the Reagan presidency in reference to cutting Social Security.

In Obama's 2015 State Of The Union Address, despite the GOP's plan to defund disability, raise the retirement age again, and possibly privatize Social Security, here's all Obama had to say on the subject:

Tuesday, January 20, 2015

Study: Tax Cuts for did Nada for Economy

One of the biggest capital taxation changes in history happened in 2003, when George W. Bush reduced the top dividend tax rate from 38.6 percent to 15 percent.

In a new study by a UC Berkeley economist (pdf and slides), he found

Stuff Republican Voters Should Know

Robert Reich (January 18, 2015) on Compassionate Conservatism and Trickle-Down Economics:

Monday, January 19, 2015

Does GOP Support "Small" Business?

In 2012 and 2013, Kansas Governor Sam Brownback championed (and the Legislature passed) the largest tax cuts in state history, eliminating taxes on non-wage earnings for nearly 200,000 small businesses. Just like all Republicans these days, Brownback had made cutting taxes and shrinking government the centerpieces of his government. Now the great State of Kansas has a huge projected budget shortfall.

Sunday, January 18, 2015

Obama is Full of Sh*t on Tax Reform

Democrat's Tax Bait

From an article at the New York Times:

Trolling Democrats and Tax Reform

* Editor's note: First, below are some excerpts from an article at VOX written by Robert H. Frank and posted on January 16, 2015 (which is edited for length). It's about a new concept for taxation. If you have the time, read the entire article.

Inequality is very Wasteful

Rep. Louise Slaughter — The No Spin Zone

Congresswoman Louise Slaughter on the House floor

Congresswoman Louise Slaughter (the ranking Member of the Rules Committee) is a Democrat from Rochester (serving New York's 25th District). Here she is, speaking on the House floor of the 114th Congress on their very first day in session:

Saturday, January 17, 2015

Republicans Going ALL OUT Against Social Security

Rep. Tom Price (R-GA), the new House Budget Committee chairman, hinted to the Heritage Foundation on Monday that he has big plans for Social Security “reform” in the next two years, according to the Atlanta Journal-Constitution and the Talking Points Memo blog. Price mentioned means-testing and increasing the eligibility age as possibilities. He also suggested that privatizing Social Security is a possibility.

Friday, January 16, 2015

The Theory of Everything on Wages

From VOX by Dylan Matthews (posted on January 8, 2015)

You can divide up the economy into two parts: money that goes to workers in the form of wages and benefits, and money that goes to owners of capital in the form of corporate dividends, bond payments, rent to landlords, etc. And according to a number of different data sources, the share going to workers is on the downswing, and has been for decades.

Report: The Rich Pay Less Tax than Poor

According to a new report from the Institute on Taxation and Economic Policy, in nearly every state, low- and middle-income families pay a bigger share of their income in state and local taxes than wealthy families. Patricia Cohen wrote in her very detailed and comprehensive article at the New York Times: "When it comes to the taxes closest to home, the less you earn, the harder you’re hit."

Thursday, January 15, 2015

Disability Fraud: Facts and GOP Fiction

Senator Rand Paul, while on a two-day tour through New Hampshire, engaged in a conversation about the viability of our safety net programs:

Wednesday, January 14, 2015

Rising Wages Predicted (In an Imaginary World)

Per Gad Levanon (January 12, 2015): In November 2013 Larry Summers proposed that the inability to reach full employment in the U.S. stems from chronically weak aggregate demand [and] aggregate demand will continue to fall short of supply, which effectively prevents the economy from reaching full employment or exhibiting significant demand...

Monday, January 12, 2015

History of the GOP's War on Social Security

The excerpts below are from a very lengthy article (that could have been a eBook) about the history of Social Security, written by G. William Domhoff, a research professor in psychology and sociology at the University of California, Santa Cruz. It's a very detailed and interesting account, leaving out nothing except for what all the players ate for breakfast.

Sunday, January 11, 2015

The Republican's Attempted Murder of Social Security

During the 1932 presidential campaign, Franklin D. Roosevelt predicted privately, "I’ll be in the White House for eight years. When those years are over, there’ll be a Progressive party. It may not be Democratic, but it will be Progressive." As a progressive, FDR ended up being elected to 4 terms, including with major support from Southern States.

Thursday, January 8, 2015

A Democrat Defends the White Working-Class

Not just the "working-class", but the "white" working-class. This is an important distinction, because in our politically and racially divided environment (with code words, dog whistles and euphemisms), one former Senator is specifying what many people have neglected to point out. While we usually think of the poor as being minorities living in impoverished inner city neighborhoods (or residing in rural areas), many once-middle class "white" Americans have also fallen into poverty.

Wednesday, January 7, 2015

New GOP Congress Launches First Strike

HuffPo Hill: Democrats and Social Security advocates are accusing House Republicans of trying to kneecap Social Security on the very first day of the new Congress, and in sneaky fashion.

Monday, January 5, 2015

Joseph Stiglitz and his "Radical" Ideas

(Editor's Note: Below are excerpts from Stiglitz: Theories of just Deserts and of Exploitation (by Branko Milanovic regarding Joseph Stiglitz at Global Inequality, followed by my comments.)

Economic theories, says Stiglitz, dealing with inequality fall into two groups:

Saturday, January 3, 2015

Dividing and Conquering the Left & Right

Editor's Note: Many times I have questioned why people always vote against their own best economic interests — and how our politicians have always divided and conquered us (here, and here, and here, and here and here). Now we have a new study. Below is from the New York Times: The Paradox of the Free-Market Liberal.

Friday, January 2, 2015

The Valley of Despond

Paul Krugman (January 1, 2015) from his post Twin Peaks Planet:

Look at a remarkable chart produced by Branko Milanovic (below) which shows that income growth since the fall of the Berlin Wall has been a “Twin Peaks” story. Incomes have soared at the top, as the world’s elite becomes ever richer. But there have also been huge gains for what we might call the global middle — largely consisting of the rising middle classes of China and India. Now for the bad news: Between these twin peaks lies what we might call the "Valley of Despond". Incomes have grown slowly, if at all, for the advanced-country working classes.

(* Editor's note: For those who are unaware, China has recently passed the U.S. to be the world's largest economy — and that's because of Corporate America's offshoring jobs to China.)

Valley of Despond

From Krugman’s readers: