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Call for a televised debate with Alan Simpson before elections

Op-ed by Rdan

The problem with Simpson’s statement about 300 million tits was not that it was sexist.
The problem with Simpson’s statement was that it was wrong as to the facts and arrogant as to the needs of most people.

The call for his ouster is another example of liberals shooting themselves in the foot by getting all emotional about hurting people’s feelings… even when they leave those feelings on the doorstep where they can be tripped over. So instead of challenging Simpson on the facts, and watching him self destruct in public, they go for the vapors and call for the nasty man to shut up or resign, so the real criminals can go back to pretending they are respectable.

Let’s call for a televised debate with the man before elections, or even after.

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REAL GDP


With the downward revision of second quarter real GDP growth from a 2.4% growth rate reported in the advance report to 1.6% reported in the first revision, real GDP in the first year of recovery now appears to be 3%. As was originally reported this is still stronger than the first year of recovery in the two jobless recoveries of 1991 and 2001. But compared to previous recoveries and the depth of the recession this still looks like an extremely weak recovery.

The major revision was in the trade sector that was reported here when the June trade data was released. Real imports rose at a 32.4% annual rate while real exports jumped at a 9.1% annual rate. As a consequence while real gross domestic purchases grew at a 4.9% rate, an improvement from the 3.9% rate in the first quarter, real final sales of domestic product only grew at a 1.0% rate versus a 1.1% in the first quarter.

Probably the main reason real GDP growth was stronger than most expected was the strength of government which grew at a 9.1% rate versus a 1.8% rate in the first quarter.
This surge was driven by defense spending that rose at a 7.3% rate. Defense procurement is always higly volatile and does not imply anything for future growth.

While those forecasting a double dip will see this report to be supporting their forecast,
it looks to me like an argument against a double dip. The main area of weakness was trade, not domestic demand and there is little reason to expect domestic final demand to swing from a 4.9% growth rate to an actual decline, even if it does slow. But import growth is almost certain to slow from the explosive growth in the second quarter so trade is unlikely to be such a significant negative in the second half. While a swing to negative real GDP growth in the second half is unlikely, continued sub-par growth remains the most likely scenario.
But in an environment of sub-par growth, the economy does not have the momentum to absorb a negative shock.

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"Everything is on the Table" at the Catfood Commission

by Bruce Webb

I am not going to harp on the sexism or ageism in Simpson’s ‘310 million tits’ comment generally, if you happen to have just gotten back on the Inter-Spatial Shuttle from Alpha Centauri this evening and don’t catch the reference a Google search on that turns up 125,000 hits, and I daresay the first 25,000 of them relevant. I want to examine what it, and some other developments inside and outside the Obama Deficit Commission reveal about a new openness in class warfare.

What Simpson’s comments revealed more broadly was a profound contempt for the lower 98%, those who might end up reliant in whole or even in part on Social Security. Because ‘310 million’ takes in everybody, in Simpson’s world anyone who ever did, is, or will ever rely on Social Security is just a Randite ‘parasite’ or at best ‘dependent farm animal’ and you can bet it is a long time since Simpson read Timothy 1:18: “For the scripture saith, Thou shalt not muzzle the ox that treadeth out the corn. And, The labourer is worthy of his reward.” and clearly he glossed over the even more famous admonition “Honor thy Father and they Mother”. For Simpson workers are suckling pigs and seniors are ‘Greedy Geezers’.

Naturally the Simpson remarks sparked large and heated discussions in the blogosphere including my old, old stomping grounds at dKos including one by commenter bink Time for Obama to Shut Down the SS Commission which sparked a long and ongoing comment thread with some vigorous participation by me. In the course of that conversation some people pushed back in defending Obama by noting that it wasn’t formally just a Social Security Commission, instead it was focused on deficit reduction generally and was formally known as the Fiscal Responsibility and Reform Commission, and that moreover both current commissioners and people around Peter G Peterson, who clearly was the inspiration for applying the BRAC Commission model to deficit reduction, were on record supporting defense cuts and tax increases, meaning that nobody was really in the tank, and that everything was on the table. But how does the Commission seem to be defining ‘defense cuts’ and ‘tax increases’ and how does that relate to Simpson’s open contempt for the ‘lesser people’ sucking away at those ‘310 million tits’. Well some discussion under the fold.

First as to defense cuts. Given the requirement for a 14-4 minimum vote for any recommendation to come out of the Commission major cuts in defense acquisition were never likely to make the cut, the six Republican Congressional members should have been enough to prevent anymore than tinkering on that front. But seemingly to make sure Obama named Republican David Cote, CEO of major defense contractor Honeywell, and he, understanding that nothing could be seen to be a total sacred cow, came up with an ingenious idea to have defense cuts while avoiding cancellation of current and future weapons program cuts: you just stick it to the troops. I’ll let TPM take it up from here: Source: Debt Commission Fights Over Freezing Military Pay, Slashing Benefits

A source familiar with the proceedings of the working group on discretionary spending tells TPM that some commissioners, including one military contractor, would prefer to save money by freezing military pay and scaling back benefits, rather than by eliminating waste in defense contracting.
The source said that different members of the commission come down on different sides of the issue. The discussion group is led by Sen. Tom Coburn (R-OK), whose primary aim is trimming fat on the contractor side, but, according to the source, David Cote, the Honeywell CEO who was appointed to the panel by President Obama, is pushing to find savings elsewhere.

“Coburn raised concerns about all of the cost overruns and redundant weapons system,” the source told TPM. “Cote made excuses for it all.”

According to the source, Cote and other members, including the commission’s co-chair Alan Simpson, are focusing instead on “freezing military pay, making military people pay for their health care.”

So Simpson’s ‘310 million’ was not just a misquote, it not only includes all those working civilians whose retirement will be based on Social Security, it also includes all those military people relying on military retirement. And since retirement pay is formulaically based on final military pay, the Commission can save $100s of billion off the back end, to say nothing of requiring service persons and retirees to kick in more for their health care. And all without taking a penny from the bottom line of Honeywell or Raytheon. But plenty of ‘shared sacrifice’ for the lower 98%.

Now as to tax cuts, also alleged to be on the table. Do you think Commission sponsor Peterson is generously offering to have the exemption for ‘carried interest’ for Hedge fund billionaires to be on the table? I don’t think so, his cofounder at Blackstone suggested that any attempt to address that would be the equivalent of Hitler invading Poland. Schwarzman: A ‘Fat Cat’ Speaks Back and I think it is safe to think it is still speaking for his old partner (and obviously still huge investor) Peterson. And Peterson has been on record for a few decades for eliminating the corporate income tax and doesn’t seem to have changed his stripes. In an op-ed last month in the WSJ (where else) Tax Aversion Syndrome and Our Deficit Future: We’ve run out of painless options. Higher taxes and reduced entitlement benefits for the well-off are the only solutions. he spells that out. (And note the clever word play-the ‘higher taxes’ on the left side of the conjunction don’t actually apply to the ‘higher off’ on the right side, only the benefit reduction)

Some have tax aversion syndrome—they have never met a tax increase they didn’t do everything in their power to block. While I believe that spending cuts must play a lead role in any solution to our long-term structural deficits, the sheer magnitude of the imbalances requires revenue increases.

Ideally, the country should raise as much government revenue as possible from a progressive consumption tax. Such a tax can be designed so that it won’t overly burden lower-income families but will raise significant revenues and increase our savings rate.

However, given political realities, it is not likely that we could enact a progressive consumption tax that would raise sufficient revenues to meet our needs. Therefore, I would initiate such a tax in conjunction with a simplified income tax (that would have far fewer corporate and individual credits and deductions)—thereby allowing for lower individual and corporate income tax rates.

Meaning that for Peterson ‘shared sacrifice’ means retaining current reduced rates on capital gains, means testing the middle class for Social Security, slapping on a broad ‘progressive’ consumption tax on everyone. And you can bet ‘progressive’ doesn’t mean a huge luxury tax on yachts.

So the translation of “Everything is on the Table” seems to be: across the board benefit cuts to Social Security, additional means testing on the middle class, cutting military pay and shifting more of the cost of medical care to soldiers and retirees, and ‘progressive’ consumption tax. Meanwhile I guess the top 2% and even more the top 0.001% just keep producing along supporting us 310 million sucking parasites. (0.001% of the population is roughly 3100 individuals and maybe 1000 households and should handily include all those with 9 digit (multi-multi millionaire) and 10 digit (billionaire) net worth and 310 million – 0.001% still equals 310 million, Simpson was not indicting everyone, just you me and everyone we know).

We can couple this with troubling statements out of the Obama Administration touting the success of TARP, the stimulus bill, and HAMP even though TARP hasn’t led to a loosening in credit to small business, the stimulus is turning around profits while not actaully reducing unemployment, and HAMP only seems to have allowed some extra months of mortgage payment extraction from homeowners who are now in large numbers re-entering default. But it is all good for the banks and the bonuses of the top 2%.

Somebody is playing a dangerous game here, surely they can’t be so far in the bubble that they want to add active unrest among the left to the ongoing tea party anger emanating from the right. If the Obama Administration allows the Catfood Commission to define ‘shared sacrifice’ in he way this post suggests they are preparing to, that nice smooth road to re-election in 2012 may shape up to be a lot rockier than they intended. Even Reagan didn’t run explicitly on a platform of “Screw the Middle Class” and nobody back then dared openly come out and admit that in practice ‘Trickle Down’ meant ‘Golden Shower’. Why the Democratic Party is attempting a merger with the Plutocratic Party is beyond me.

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Saul Alinsky vol II Rules for Republicans

Robert Waldmann

Saul Alinsky sure has a lot of followers. Obama is a fan. Hillary Clinton wrote her senior thesis about Alinsky. However the people who follow him to the letter are Republican’s who want to privatize social security.

Rule 13 (slightly edited)

13. Pick the target … personalize it,…

The latest follower of Alinsky is Club of Growth radical Pat Toomey who claims he never advocated privatizing social security. Laura Vecsey notes the clear Alinsky influence

The key to understanding this semantic subterfuge is, well, semantics. The word Toomey uses is “personalized” Social Security

So far rule 13 hasn’t worked, so I guess they will have to back uo to rule 13

12. “The price of a successful attack is a constructive alternative.”

Nah not gonna happen.

Full rule 13

13. Pick the target, freeze it, personalize it, and polarize it.

I am kidding on the square. Check the rules. Republicans have been following them since 1992 at the latest.

It has been hard for them to stick to their followers areas of expertise, since there aren’t any.

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Housing Bubble ?

Robert Waldmann

Andrew Harless argues that there was no housing bubble ?!?

Apparently it is now generally accepted that the rise in house prices was an aberrant bubble, justified only in the minds of irrational buyers who ignored the fundamentals and expected house prices to keep rising simply because they were already rising.

But what were the fundamentals? Certainly, if one had foreseen today’s circumstances, it would have been clear that housing was not a good investment. If one had been able to say, “In a few years, the unemployment rate will rise to 10%

Go read the whole post. I can’t choose the key quote but basically he argues that high asset prices were required to achieve a normal unemployment rate and therefore they weren’t aberrant. He argues that it must be possible to achieve normal unemployment without a bubble. He then sure seems to argue that since some asset price could have been sustainably high, clearly US houses were those assets.

More after the jump

This time I’m not convinced. You don’t define bubble and don’t respond to the alleged evidence that there was a housing bubble. Why was the relative price of housing in the 21st century so much higher than in the 20th (during which it was quite stable) ? Why was the ratio of price to rent so high ? Neither is easy to explain assuming 4% unemployment.

In effect you claim that, if policy makers agressively countered the recession and we were at full employment now then housing would have been a fine investment. So why did everyone with a brain and an open mind assert back in 2006 that there was a housing bubble (that is housing was a very bad long term investment) ?

I think an important issue is that you note a worldwide problem and assume that the US economy can solve it.

If you were writing about the alleged housing bubble in Ireland (I am sure there was such a bubble I only use “alleged” in an attempt to be polite) such a claim would sound silly. I think it is also silly for the USA. The US can’t keep running huge current account deficits forever. The global savings glut requires increased final demand in other countries

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Credit card delinquencies and balances fall 2Q

Transunion reports:

TransUnion’s quarterly analysis of trends in the credit card industry revealed that the national credit card delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) decreased to 0.92 percent in the second quarter of 2010, down 17.1 percent over the previous quarter. Year over year, credit card delinquencies fell by 21.3 percent.

Average credit card borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) again drifted downward for the fifth consecutive quarter nationally by 4.1 percent to $4,951 from the previous quarter’s $5,165, and down 13.4 percent compared to the second quarter of 2009 ($5,719). This represented the first period credit card debt was below $5,000 since the first quarter of 2002.

On a year-over-year basis, national credit card originations dropped almost 6.5 percent.

There was no mention of how writedowns of bad debt may have affected the numbers as part of savings. State by state and city and not city areas varied widely in numbers, as well as regions of the US.

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Dealing with the Sunset of the Bush Tax Cuts (Part IV in a series)–the Tax Relief Coalition

by Linda Beale
crossposted with Ataxingmatter

Dealing with the Sunset of the Bush Tax Cuts (Part IV in a series)–the Tax Relief Coalition

The Tax Relief Coalition–another of the myriad anti-tax groups comprised of Grover Norquist’s group and those of similar ideology–is at it again with a letter to Congress (available on BNA) urging the passage of new legislation to pass tax cuts to extend the temporary cuts enacted under the Bush administration. The group is spending millions lobby for its interests with the dubious claim that discontinuing tax cuts for the wealthiest Americans will hit small businesses the hardest. See, e.g., Jensen & Salant, Leader on Bush Tax Cuts Wins Allies to Keep Provisions in Place, Bloomberg.com (Aug. 20, 2010) (noting that the coalition groups have spent $3.8 million since Jan. 1, 2009 on candidates and advertising, and that the Chamber of Commerce plans to spend $75 million influencing elections in its favor).

Note that the coalition–formed of “trade associations, advocacy groups, and corporations”–calls itself favoring “pro-growth tax policies”. But what it means is favoring tax cuts. It is arguable that tax cuts support economic growth–at best they are a second-rate stimulus compared to direct government spending on public and human infrastructure that provides long-term support for economic stability– such as public transportation, public communication networks, development of alternative energy sources, education (K1-university), and basic research.

These claims that the tax cuts help small businesses are at best dubious. (See, e.g., yesterday’s post outlining various reasons why the capital gains preference has very little to do with stimulating entreprenuership or helping small businesses.) The coalition tries to cast the Bush tax cuts in terms of job creation. But the fact is, the Bush regime had a lousy record for job creation, and the tax cuts that were especially favorable to corporations probably did almost nothing to contribute to job creation. The “American Job Creation Act of 2004” for example, mainly acted as a tax cut for multinational corporations that used the very low taxation of repatriated money to pay big dividends to shareholders even while they were laying off thousands of workers. Similarly, expensing provisions and other tax cut provisions (especially for oil and gas industry and other targeted industrial provisions) mainly gave more money to managers and owners, not workers. Real wages of workers have fallen, while corporations sit on big kitties of cash–keeping the productivity gains for managers and owners and not sharing them with workers and certainly not creating new jobs for new workers.

What about the small company owners that the National Federal of Independent Business brings in to calim that any tax increase is a job killer? See Bloomberg article, above. That’s a superficially self-serving claim that is probably in truth a case of blind greed keeping business owners from admitting that federal dollars spent for unemployment, infrastructure, education and other important programs will actually create a more sustainable economy that will be better for their businesses. A little bit more in taxes now will have positive impact, not negative, on the economy. And those arguments also leave out a few of the details–like the fact that the proposed tax increase on joint returns with $250,000 or more impacts very, very few small businesses.

The hypocrisy is also evident, as coalition members refuse to limit extension of the tax breaks to the lower income group, even while they complain about deficits. The deficit argument is essentially brought out to create fear in average voters and to provide a salient objection to any additional spending that does not directly go to the benefit of business managers and owners, but it isn’t a real concern since it doesn’t enter into the discussion of whether or not to extend tax breaks to the wealthy who don’t need them.

Regretably, the Democrats don’t have much backbone on this issue. Senators Conrad and Bayh, for example, have accepted the idea that it is problematic to raise taxes on anybody during an economic slowdown. That their position doesn’t make sense–a little bit more in taxes on the wealthiest Americans won’t really affect either consumption or investment in new businesses–doesn’t seem to matter.

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Alan Simpson on Social Security

I have no words for this e-mail to OWL by Alan Simpson on Social Security:

I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ‘em too. It’s the same with any system in America. We’ve reached a point now where it’s like a milk cow with 310 million tits! Call when you get honest work!
Al

There are plenty who have weighed in, some of them major organized voting groups such as AARP. Alan Simpson also has other views regarding “the federal deficit” not worth exploring except he still is co-chair on the Deficit Commission.

Update: Mr. Simpson’s apology is here… http://library.constantcontact.com/doc209/1102372204926/doc/nP49Pz07tDokfhHd.pdf

“I can see that my remarks have caused you anguish, and that was not my intention.”

Update 2: Ms. Carson’s response is here…www.owl-national.org

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Licensing fees and taxes for bloggers

Hat tip r.j.sigmund for finding this leading to the Philadelphia City Paper:

Philadelphia Demands License Fee and Taxes from Bloggers

Philadelphia bloggers were dispatched letters informing them that they owe $300 for a [lifetime] privilege license [or $50 per year for an annual license], plus taxes on any profits they made. Even if, as with Sean Barry, that profit is $11 over two years.[…] Even though small-time bloggers aren’t exactly raking in the dough, the city requires privilege licenses for any business engaged in any “activity for profit,” says tax attorney Michael Mandale of Center City law firm Mandale Kaufmann. This applies “whether or not they earned a profit during the preceding year,” he adds.

Now a blog has to have an ‘owner’, and I assume the ‘owner’ is designated a location based on office (or residence), and that some level (state of federal) of tax collection is providing the information about profits.

Now we know that in 2003 many econoblogs were simply hobbies and the best were love affairs but hardly businesses, and that now in 2010 a whole bunch have been to the Whitehouse several times, and some of our own Bears to Treasury offices or other national organizations, universities, and some work in private companies mesaured in billions of dollars. Then again some of us don’t.

But on bad days I feel more like this young lady. One reader innocently accused us of having staff/interns that waylaid comments…how could he know there were plans for a part time staff in 2017? A backhanded compliment I believe, in that we are all volunteer researchers and authors.

I want to take this opportunity to let front page authors know I will shoulder this burden of filing forms, even if we make a profit from the ads (revenue minus expenses and no payroll, but my need for a new laptop battery and the present for Mike’s baby may shatter that dream this year).

Anyway, this is my goofy way to say thanks for value freely given and making this bunch of amateur writers well worth any efforts I add to keep the writing published. Thanks..it is an honor.

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