Relevant and even prescient commentary on news, politics and the economy.

Earned Income Tax Credit

Greg Mankiw, Robert Stein, and others have been pushing the EITC lately. What is that all about? Efficiency? Best income redistribution mechanism? Leading edge to some other goal?

This is in addition to the steady beat of Walker and others to conflate entitlements such Medicare,Medicade,and Social Security into a single problem.
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The Downside of Increased Trade

Save the Rustbelt sends this note working the end user as a reference, which is useful sometimes.

The Downside of Increased Trade

My wife, aka the world’s greatest nurse, worked this weekend. She spent a great deal of her time trying to track down enough Heparin to keep a patient alive this week. This is ridiculous. She had twenty-three frail elderly people to care for, and shouldn’t be tracking down routine medications.

There have been multiple recalls of Heparin since January, when it became clear that Heparin imported from China by Baxter was causing strange and often deadly reactions.

Initially, the Chinese said that if Baxter was having problems, it was Baxter’s problem. After the stuff hit the fan the Chinese have relented somewhat.

It is reported that Chinese pharma manufacturers are registering aa chemical manufacturers to avoid inspections, although it appears the embarrassed Chinese government and the FDA are tracking them down.

China is quickly becoming THE major source for generic drugs, patent drugs, and raw materials for other drug makers.

How much risk will you take to get $4 generic prescriptions?

This post by save_the_rustbelt
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Update from rdan: past Angry Bear posts on pharmaceuticals

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G W Bush’s successful Presidency

William Pitt reminds us to keep the following in mind during this election:

It has been more than ten years now since PNAC first introduced itself by way of its letter to Clinton. Over this decade, PNAC’s ideology and foreign policy mandates became the center of gravity for America’s military and diplomatic practices and priorities. Those same PNAC members listed above were instrumental in the formulation of false arguments for an attack and invasion of Iraq, and for the execution of same.
To many, the current situation in Iraq represents a prime example of the folly and failures of George W. Bush and his administration. In fact, nothing could be further from the truth. From the PNAC perspective, their presence within US government and control over US policy has been a great success. They achieved the massive increase in military spending they sought in 2000, much of which became and continues to be a multi-billion dollar payout to friends and political allies. They have their permanent bases in Iraq. And if the tea leaves are being read correctly, they might just get an attack on Iran, which represents one more step towards their goal of region-wide regime change in the Middle East.

Ten years on, the Project is doing quite nicely, thank you. Failure is only in the eye of the beholder, and if the beholder is getting everything he wants with a tidy payday to boot, “failure” is not what they are going to see. As far as PNAC is concerned, this has been a decade filled with astonishing achievements. In other words, it’s all about priorities and perspective…

PNAC alumni.
Among these were:

Bush’s current vice president, Dick Cheney;

Cheney’s former chief of staff, I. Lewis “Scooter” Libby;

Bush’s former defense secretary, Donald Rumsfeld;

Bush’s former deputy defense secretary, Paul Wolfowitz;

Bush’s former special assistant and senior national security adviser, Elliot Abrams;

Bush’s former ambassador to Iraq and Afghanistan, Zalmay Khalilzad;

Bush’s former deputy secretary of state, Richard Armitage;

Bush’s former UN ambassador, John Bolton;

Bush’s former assistant defense secretary and member of the Defense Policy Board, Richard Perle;

Bush’s former deputy secretary of state, Robert Zoellick; and,

Bush’s former defense policy adviser, Eliot Cohen.

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Shop til you drop due diligence

This article describes the recent history of corn flour for tortillas in Mexico. I looked it up after Stormy’s recent post on Wages and prices.

By 1996, Maseca had drawn the attention of Archer Daniels Midland, the world’s largest corn broker. Itself no stranger to government largesse, ADM spotted a good business model from across the border, and bought a 22 percent stake in GRUMA, Maseca’s parent company. Today, ADM’s formidable board chair G. Allen Andreas sits on GRUMA’s board of directors, as does the company’s CFO, Douglas J. Schmalz.

GRUMA now controls 70 percent of Mexico’s corn-flour market. As NAFTA opened the Mexican market to cheap, highly subsidized U.S. corn and dismantled Mexico’s support for its farmers, the price of corn in Mexico plunged, providing a windfall for GRUMA and despair for Mexican corn growers. Maseca now imports 30 percent of its corn for tortilla production from the United States, according to an Oxfam report [PDF].

And as the price of corn fell, the Mexican government — citing free-market dogma — withdrew its ceiling on the tortilla price. According to Oxfam, between 1994 and 2001, the corn price in Mexico fell by 70 percent; meanwhile, between 1994 and 1999, the price consumers paid for their staple, tortillas, rose threefold — further burnishing GRUMA’s bottom line. And when rising tortilla prices pushed many consumers to switch to white bread, GRUMA cashed in as well. Another of its subsidiaries — a joint venture with Archer Daniels Midland called Molinera de Mexico — is the nation’s largest wheat-flour producer, and GRUMA owns a fast-growing bread business as well.

GRUMA has also moved aggressively north into the U.S. tortilla market, and south into Central America. It is by far the world’s largest corn-flour and tortilla producer.

Thanks to his patrons in the Mexican political elite, GRUMA’s chief executive, Roberto González Barrera, now stands atop a global tortilla empire with annual sales of $2.4 billion. (Amazingly, he also controls a major Mexican bank, Banorte, which Carlos Salinas delivered to him amid perhaps the most disastrous bank-privatization scheme in history.)

Good links are in the original. Was this good or bad for the teachers mentioned in the Wages and Price demonstration?
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Your wish is my command….

I have added the ‘read more’ option to open in a separate page format rather than same page because I also added in line commenting for the second page, which in my mind made it easier. The pop-up window is maintained for convenience with out going to the full page for your convenience as a frequent guest or poster.

The Bear Talk box is at the lower left corner and appears to function correctly, and is for off topic and 24/7 communication for AB readers and posters. It is customizable for banning, swearing filter, and civility. I personally will not monitor the box, but have hired a 7th grader to do so. Actually, just e-mail me if someone is beserko, and I can put in controls.

Let me know as well if loading time is a lot slower because of these additions in your preferred browser. Blogger itself seems very sluggish, so I cannot be sure. I can re-arrange script and front load posts sooner rather than later. That is my next project.

BTW, the title is not really true, but I am a do-gooder leftie, so am a little soft.
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Must see video

There is a must see video at Economists View by Elizabeth Warren of Harvard University at U. Berkley lecture series on the The Coming Collapse of the Midddle Class.

Noni Mausa says…

Take the time. Watch this, I just did. It explains exactly why the middle class is in trouble and where the money has gone.

Over on Angry Bear we were discussing who can afford children, in this post: Who Should Have Children? Or, If You Have To Ask, You Can’t Afford Them

I presented this question because many contributors to this and other blogs have said the poor shouldn’t have children if they can’t afford them. My question was, how much is enough? and offered these possible criteria:

1. A household income greater than the poverty line for that size of family.
2. In addition, income above that level sufficient to buy health insurance for that size of family.

3. Income dedicated to a life insurance policy for the family breadwinners.

4. Savings sufficient to pay all ordinary expenses for at least a year, including maintenance of the health insurance, in case of illness or job loss.

5. In addition, factor in a savings account strictly for the post secondary education of each child in the family.

It emerged that these modest requirements amounted to something over the median US income, plus all that dedicated savings. At this level childrearing was tricky, but probably doable.

I had privately thought that our conclusion — that half of American families couldn’t afford to raise children — was a bit extreme. Turns out from Dr. Warren’s numbers, I may have been correct. I would far rather have been disproved.

Noni

Rdan here. I posted the link to pass the ideas along, but expect more posts to result from the presentation and statistics.

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I could own 1/100th of a house…or less

This article in the Private Equity Law Review indicates that unravelling the 45 Trillion could be interesting.

Judge Christopher A. Boyko’s order dismissing a number of foreclosure actions brought by a CDO trustee throws a hard light on a common practice in real estate loan syndication. Due to the cost of properly assigning the notes and mortgages that get tossed into the CDO trust, the assignments are not actually completed. Instead, documents are signed expressing an “intent” to assign. A spokesman for Deutsche Bank, the CDO trustee, said that skipping the assignment process :

“[Is] typically done as a matter of cost efficiency, since for some extremely high percentage of mortgages there will never be any foreclosure activity, there’s no legal need for the assignments to be recorded until they need to be used.”

Because the assignments were not completed at the time the foreclosure actions were filed, Judge Boyko ruled that the CDO trustee lacked standing to bring the action. A dismissal on these grounds is not based on the merits, and the trustee is free to refile the action once it completes the assignment paperwork.

Assuming, of course, that paperwork exists and can be found. The paperwork underlying a large CDO is massive. The notes and mortgages on which the CDO is based are originated in broker’s and lawyer’s offices around the country, and a book entry is made somewhere reflecting the loan. That book entry is what is placed in the CDO trust, not the note and mortgage itself.

Deutsche Bank tried the compelling argument that “‘Judge, you just don’t understand how things work.’” That didn’t go down well with Judge Boyko, who wrote that this attitude “reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process.”

The balance of power in the foreclosure process may tip toward plaintiff’s attorneys if other courts begin demanding proper documentation of syndicated loans.

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Complicated politics in the ME

Iraqi politics certainly is complicated. Try this article.

So, I was at a great Center for American Progress panel yesterday with journalists Nir Rosen and Michael Ware. They have been in Iraq for most of the last five years and get the perspective on the ground the we don’t usually hear about here. Ware said something that just totally blew my mind.

The Badr Organization is the military arm of the Islamic Supreme Council of Iraq (ISCI previously known as SCIRI). Now ISCI is closely aligned with Maliki government and is arguably the most significant player in the current central government. In fact significant elements of the Badr Organization have been incorporated into the Iraqi Security Forces.

Now, here is where things start to break down. The Badr Organization (Originally called the Badr Brigades) was originally formed by Iran. But according to Ware many of its members were considered to be part of the Iranian Revolutionary Guard Corps. And many of them are now considered to be retirees of the IRGC. Which means…wait for it… wait for it…

They still get pensions from the IRGC!! But it gets better. The Bush Administration has classified the IRGC as a terrorist organization!!

So, just so that we’re clear on this. We are building an army full of people who are still getting pension payments from an organization that the U.S. has designated a terrorist organization. And we are basing our entire future in Iraq on that army. Not only that, but when this army decides it’s going to take out its major opponent for power as it did last week, and doesn’t even tell us about it, we still back it up with air power and American troops as it stumbles…

No special knowledge, but part of the general knowledge. The game begins.

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Threaded conversation by topic in blogger on haloscan

For those who want to have an extended conversation on Angry Bear on a topic that becomes increasingly private over time, we can try this:

Create a post page for an ongoing project. So…on my Continuing conversation page page I include any notes I want my ‘team’ to
see. When there are new information or questions or such, then let
me know by adding a comment to the ccp topic. Similarly, comments
are added when other tasks are completed.
By selecting the “notify me when changes are made” option in halsocan, you get
an email when someone leaves a comment.

Update: Never post right after reading lines of code for awhile.

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