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

Make a better election choice

Just want to let everyone here know of this web site I heard about. It is My Election Choices.com. Their opening statement:

Isn’t your vote for President worth more time than a game of Sudoku?

This site helps you learn which candidates most agree with you. The creators of the site have taken statements made by all the presidential candidates and classified them into 18 categories. You then check off the statements you agree with. You are blinded as to which candidate made the statement.

I have done 2 categories that each had 3 pages of statements. When you click Finish, you are taken to a page that has a bar chart showing you the relationship of agreement you have with each candidate. As you complete a category, it adjust your chart to reflect the summation of agreement with each candidate.

I have completed On Taxes, Spending and Fiscal Policy and On Trade and Globalization. Interestingly, so far I have agreement on 8 Clinton statements, 7 Ron Paul, 5 each for Dodd, Hunter, Richardson and Tancredo. It goes down from there with the other candidates to where I have only 1 statement of agreement with Biden and Brownback. I have to say, some of the statements I agreed with I did not expect to have been made by the particular candidate. You are shown in the results who made each statement and the percent of agreement to date of all those who have completed said category.

You can also see what the cumulative is for all those who have completed all the categories based on topic, gender or most popular category. Currently the leading candidate at 27% based on topic is Dodd. At 23% is Kucinich, Hunter, and Huckabee. Clinton is at 11% as is Gravel!

I think this site is just what has been missing in our modern elections. It give one an opportunity to work through all the candidates’ positions while minimizing the prejudice you might have already assigned to a candidate. It is a way of cutting out the coloring that our media adds to our learning about a candidate.

I encourage you to give it a run. But, as they suggest, only pick one or 2 categories to start. You can go back anytime and pick up where you left off. I think you’ll be pleasantly surprised. Enjoy.

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Guess we don’t want all that Globalizing has to offer?

By way of Crooks and Liars comes an article about our declining international tourism industry. This article is a personal account of stopping in the US as the author travels from London to New Zealand.
The first paragraph is the econ specifics:

The travel and tourist industry is one of the United State’s biggest money-makers, generating $103 billion in tax revenue every year. Without this tax revenue, every American household would pay nearly $1,000 more in taxes every a year. But while the travel business is flourishing internationally, tourism to America has been on a steep decline, dropping 36 percent between 1992 and 2005, with a loss of $43 billion in 2005 alone. The nation’s international tourism balance of trade declined more than 70 percent over the past 10 years – from $26.3 billion in 1996 to $7.4 billion in 2005.

Don’t stop there. Read about how the author’s fellow passengers were cataloged via photo and finger prints even though they were not visiting the USA. They were just stopping over for fuel. Is it any wonder we are seeing such a decline in tourism? One passenger summed it up:

‘You bloody Yanks seem to think terrorism is something new and only ever happens to Americans,’ he groused to me… ‘We’ve had the IRA and the French have the Algerians and the Spanish have ETA. Now you know what the rest of Europe’s been living with for the last few hundred years. Why don’t you lot just grow up?’

I know our reputation in the world has become suspect via what is reported, but people with first hand accounts such as what these passengers experienced I would assume are more probative when judging us. What these passengers experienced is the results of setting policy as driven by paranoia. I personally do not want to be associated with such a mind set. At the same time, what the heck happened to all that we learned from the focus on paranoia and it’s harm in the 60’s? I can recall many bands having songs about it as we became aware of how it was driving policy then. This is one of my favorites:
Grand Funk Paranoid:

Did you ever have that feeling in your life That someone was watching you? You don’t have no reason that’s right But still he’s there watching you Someone is waiting just outside the door To take you away

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Social Security, the new method of income redistribution

Get this. The problem is that globalization is being threatened, all that good could be lost. The solution; Social Security.

In the July/August issue of Foreign Affairs (published by the Council of Foreign Relations) is an article: A New Deal for Globalization by Kenneth F. Scheve is Professor of Political Science at Yale University. Matthew J. Slaughter is Professor of Economics at the Tuck School of Business at Dartmouth.
Seems some people somewhere are getting concerned that their pet project might be getting derailed.

Advocates of engagement with the world economy are now warning of a protectionist drift in public policy. This drift is commonly blamed on narrow industry concerns or a failure to explain globalization’s benefits or the war on terrorism. These explanations miss a more basic point: U.S. policy is becoming more protectionist because the American public is becoming more protectionist, and this shift in attitudes is a result of stagnant or falling incomes.”

The authors say they don’t know why the incomes are falling, that there are no clear answers:

“Over the last several years, a striking new feature of the U.S. economy has emerged: real income growth has been extremely skewed, with relatively few high earners doing well while incomes for most workers have stagnated or, in many cases, fallen. Just what mix of forces is behind this trend is not yet clear, but regardless, the numbers are stark.”

First — “new feature”? Did they not read about the early years of the rise of the industrialists and the division in income way back when? Or is it that they as others took for granted that those making the money via globalizing their operations were going to be nice to those who worked for them at home and share the spoils via wages. Now that would have been a “new feature”. Being nice that is. I know, maybe they just thought everyone could and would outsource their own labor.

Actually, they do know about the old days:

“By some measures, inequality in the United States is greater today than at any time since the 1920s.”

What’s the solution to rising protectionism talk? Well, first what is not going to work (read carefully all you who think it’s just a matter of the populace getting off their intellectually lazy butts):

“They must also recognize that the two most commonly proposed responses — more investment in education and more trade adjustment assistance for dislocated workers — are nowhere near adequate. Significant payoffs from educational investment will take decades to be realized, and trade adjustment assistance is too small and too narrowly targeted on specific industries to have much effect.”

So, go to school, get a job is not it. Darn! The solution envelop please, (I’m so nervous):

“The best way to avert the rise in protectionism is by instituting a New Deal for globalization — one that links engagement with the world economy to a substantial redistribution of income. In the United States, that would mean adopting a fundamentally more progressive federal tax system.”

WHAT!!!!!!!!!!!! REDISTRIBUTION?

“The notion of more aggressively redistributing income may sound radical, but ensuring that most American workers are benefiting is the best way of saving globalization from a protectionist backlash.”

And they said they didn’t know why “income growth had been extremely skewed.” Well, if they didn’t know, then how is it they are channeling what was proposed before? They are even referring to it in it’s historically correct name: New Deal.

The article is very basic thinking and made me wonder why does it take 2 professors writing for 6 pages to state what I was taught under the lesson of morals: that is to share and share alike,
And then under the lesson of civics: that is social commons,
Then what I learned in history: Ford paying the help and Roosevelt’s New Deal. Why?

I think the answer is because then they could not write as if skewed income distribution is “a striking new feature” and thus suggest as an example of effecting redistribution by targeting the last remaining New Deal concept expressed in the program commonly called Social Security. They specifically rule out that other monster of a New Deal brain storm:

This does not, however, mean making the personal income tax more progressive, as is often suggested. U.S. taxation of personal income is already quite progressive. Instead, policymakers should remember that workers do not pay only income taxes; they also pay the FICA (Federal Insurance Contributions Act) payroll tax for social insurance. This tax offers the best way to redistribute income.”

Well if that is not the ultimate bastardization of the purpose of Social Security. It’s now proposed to use it as an income redistribution machine.

Think I’m being to distrusting?

“In many ways, today’s protectionist drift is similar to the challenges faced by the architect of the original New Deal. In August 1934, President Franklin Roosevelt declared:
“Those who would measure confidence in this country in the future must look first to the average citizen. . . .”

See, they know the answer. They know exactly what they are doing here. By the way esteemed professors, stupid is not written on our foreheads.

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What’s old is New Again

This NY Times piece is making a comparison to yesteryears when those mansions in Newport, RI were built. It starts with Sanford I. Weil of Citigroup and how he compares to Andrew Carnegie.

First, how does this period compare:

Only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution — currently, the almost 15,000 families with incomes of $9.5 million or more a year, according to an analysis of tax returns by the economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics. (I have posted from their data in the past.) Such concentration at the very top occurred in 1915 and 1916, as the Gilded Age was ending, and again briefly in the late 1920s, before the stock market crash.

Mr Weil view:

“I once thought how lucky the Carnegies and the Rockefellers were because they made their money before there was an income tax,” “I want to give away my money rather than have somebody take it away,”

We have Mr. Kenneth C. Griffin, who received more than $1 billion last year as chairman of a hedge fund, the Citadel Investment Group, declared:

“The money is a byproduct of a passionate endeavor.”
“We have helped to create real social value in the U.S. economy,” he said. “We have invested money in countless companies over the years and they have helped countless people.” “The income distribution has to stand,” Mr. Griffin said, adding that by trying to alter it with a more progressive income tax, “you end up in problematic circumstances. In the current world, there will be people who will move from one tax area to another. I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard.”

Such positions are summed up with:

“Carnegie made it abundantly clear that the centerpiece of his gospel of wealth philosophy was that individuals do not create wealth by themselves,” said David Nasaw, a historian at City University of New York. and the author of “Andrew Carnegie” (Penguin Press). “The creator of wealth in his view was the community, and individuals like himself were trustees of that wealth.”

Really? They are the Trustees?

Can it be anymore egocentric? Why yes they can:

Lew Frankfort, chairman and chief executive of Coach the manufacturer and retailer of trendy upscale handbags, who was among the nation’s highest paid chief executives last year, recaps the argument. “The professional class that developed in business in the ’50s and ’60s,” he said, “was able as America grew at very steady rates to become industry leaders and move their organizations forward in most categories: steel, autos, housing, roads.”

That changed with the arrival of “the technological age,” in Mr. Frankfort’s view. Innovation became a requirement, in addition to good management skills — and innovation has played a role in Coach’s marketing success. “To be successful,” Mr. Frankfort said, “you now needed vision, lateral thinking, courage and an ability to see things, not the way they were but how they might be.” (Like this was not needed in the past?)

Please note, Mr. Frankfort is not emphasizing the manufacturing, he is emphasizing the marketing.

What would be the “problematic circumstances” of being more progressive in the tax structure? Why do they not want to pay the help that they acknowledged got them where they are? Even in the good old days of Carnegie, paying the help was not considered a charitable thing to do.

I have posted that things have changed. We make money differently today. The article notes:

The Glass-Steagall Act of 1933 outlawed the mix, blaming conflicts of interest inherent in such a combination for helping to bring on the 1929 crash and the Depression. The pen displayed in Mr. Weill’s hallway is one of those Mr. Clinton used to revoke Glass-Steagall in 1999. He did so partly to accommodate the newly formed Citigroup, whose heft was necessary, Mr. Weill said, if the United States was to be a powerhouse in global financial markets.

The article does offer counter opinions to this self aggrandizement. I’ll leave it to you to read the rest except for this which I think sums up the counter opinion (in a more polite manor than I would have):

“I don’t see a relationship between the extremes of income now and the performance of the economy,” Paul A. Volcker, a former Federal Reserve Board chairman, said in an interview, challenging the contentions of the very rich that they are, more than others, the driving force of a robust economy.

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Buffet wants to "soak the rich" too?

Well, at least equalize the rates at a minimum. But as you read from CNN, he seems to be suggesting something more at least for a certain means of income earning.

From the Washington Post:

Buffett cited himself, the third-richest person in the world, as an
example. Last year, Buffett said, he was taxed at 17.7 percent on his
taxable income of more than $46 million. His receptionist was taxed at about 30 percent.
A populist tone permeated the 70-minute talk with the billionaire
investor and philanthropist in Manhattan on Tuesday night. The
talk, given to about 600 Wall Street bankers and money managers, raised at least $1 million for Clinton’s presidential campaign,…
Buffett said that he and other privileged Americans must do more to help the less fortunate.
“We have the chance in 2008 to repair a lot of damage,” Buffett said.

CNN has this take on the speech:

The … chairman touched on a variety of issues in a question and answer session
with Clinton, including his disdain for private equity firm power brokers.

“The people that earn their living doing that should be subject to taxes that reflect their labors,” he said in the gathering at a hotel in midtown Manhattan.
Buffett said he makes $46 million a year in income and is only taxed at a 17.7 percent rate on his federal income taxes. By contrast, those who work for him, and make considerably less, pay on average about 32.9 percent in taxes – with the highest rate being 39.7 percent.
“I’m willing to bet anyone in this room $1 million that those rates are less than the secretary has to pay,” said Buffett.

Does he really mean it? I think he does. Unfortunately, just raising the tax rates is not going to solve the problem when the problem is pay. Raising the rates is a start, it will help with the deficit issue but it will do little for those who are earning a majority of their income via wages (which is 95% of the citizens if you recall my posts of the past). It does nothing to reverse the shift in share of income. If people in Mr. Buffet’s income bracket are truly concerned about the people, they can start by paying their help more. Doing such would be a true expression of the founders concept of freedom, that is the economic freedom part of the concept. Unfortunately I do not read anywhere of anyone suggesting that. Instead they seem to be focusing on a paternal benevolent model of helping the less fortunate (those earning less than the Wall Street Bankers).

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Any thoughts on the fuel costs?

I was tanking up the other day. The Caravan fortunately and not the truck (33 gallons) when I noticed that diesel was about $0.20 less than regular. That seemed unusual from my recollection and got me wondering. So, I found this site by our government titled Energy Information Administration.

You can down load all sorts of spread sheets. I picked the ones that had pricing and gallons sold in total and by US refiners.

First the total sold.
The black line is gasoline, the red is diesel. Both are millions of gallons times 100.


Rather slow rising trends here. Infact, our gasoline use has only risen 39.53% from March 1994 to a peak in June 2005 at 39.53. Diesel peaked at 14.33 in June 2006. An increase from March 1994 of 53.1%.

Next is US refiners output.
Again., black is gasoline, red diesel in million of gallons times 100.


Notice the decrease? Interesting that diesel was declining first. Gasoline output peaks at 6.54 in the last quarter of 1998 and the same in June 2001. It comes close in June 2002 at 6.49. The grandaddy is June 2003 at 6.68. From there it’s down hill to levels below the June 1996; 5.74 in March of this year, 5.78 in June 1996. Diesel peaks at 2.44 in March 2001 and never sees past 2.0 after March 2002. The only other time we saw less than 2.0 was December of 1994.
Did we suddenly start loosing refineries? We were putting out more every year until “everything changed”. Hummmmmmmmmmm.
And now for the money. Gasoline is black, diesel is red.

Here is the world crude oil price by year.
It does look like the gasoline and diesel price lines. Your thoughts?

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Longer view of savings vs disposable income

Updated below.

Cactus’ post got me thinking. And, holding true to my thought that we have changed our focus I decided to take a longer view.
First is at chart by year from 1929 to 2006 of the savings % of disposable income.


Notice the WWII years? This is the same time income from entrepreneurship was peaking. But, we don’t see the same relationship during the 90’s.

Income from interest looks similar too. As I noted in a prior post, the interest income curve followed the Fed Rate curve. The interest income peak coincides with the percentage peak of savings in the first chart. The savings % of disposable income peaks in 1982 at 11.2 and the income from interest peaks in 1981 for all 3 groups. (Note the scale range is different so that the peak for interest looks greater.)


What is most interesting, is that share of income from wages is peaking just after this for the top 5%. The 95 to 99 group at 76.4 in 1983, the to 1% at 66.1 in 1984 and the top 0.1% at 53.9 in 1984. Only the top 0.1% see an greater peak after this and it’s in 2000 at 58.2 % of their income from wages.
Income from rents and dividends decline from the mid to late 20’s until rent income starts to rise in 88/89 and dividends income changes direction in 2000.
I would say that savings is a function of income from wages (updated) and interest rates. There could be a factor related to people investing in entrepreneurship, but it is a special circumstance. That the trend for savings is down after the Reagan revolution continues to suggest to me that we have changed our thinking about how to make money.
As to Cactus’s concern about increased savings in a down turn, I looked a the individual quarters of each recession (years prior to 1947). Overall, savings goes down during the recession. When it goes up, it is an oddity. They are 1969, 1980 and 1990. The 1969 is truly odd in that the rise is a change of 1.5 where as the other two are only 0.5. And they we have 2001 with it’s one quarter that has a freakish increase followed by a death dive.
Recessions via NBER
8/1929 to 3/1933 43 months 4.5 to -1.5 (4.5, 4.1, 3.9, -0.9, -1.5 by year)
5/1937 to 6/1938 13 months 6 to 2 by year
2/1945 to 10/45 8 months 20.4 (years around the war 41 to 46: 12.2, 24.1, 25.6, 26.1, 20.4, 9.6)
11/1948 to 10/1949 11 months 8.0 down to 4.3 (8, 5.9, 4.7, 5, 4.3)
7/1953 to 5/1954 10 months 8.4 down to 7.4 (8.4, 8.4, 8.6, 7.4)
8/1957 to 4/1958 8 months 8.6 down to 8.3 (8.6, 8, 8.4, 8.3)
4/1960 to 2/1961 10 months 7 to 8 (7, 7.4, 7.1, 8)
12/1969 to 11/1970 11 months 8.5 to 9.9 (8.5, 8.4, 9.5, 10, 9.9)
11/1973 to 3/1975 16 months 11.7 to 9.8 (11.7, 11.2, 10.2, 10.1, 11, 9.8)
1/1980 to 7/1980 6 months 9.5 to 10 (9.5, 9.9, 10)
7/1981 to 11/1982 16 months 11.5 to 10 (11.5, 12.2, 11.6, 11.8, 11.4, 10)
7/1990 to 3/1991 8 months 6.9 to 7.3 (6.9, 6.9, 7.3)
3/2001 to 11/2001 8 months 1.9 to 0.5 (1.9, 1.2, 3.4, 0.5)
Update:
Cactus mentions GW’s worst years. It is interesting when we look at interest, rent, dividends and entrepreneurship.
For the 90 to 95 group we see their income coming from dividends (1.5 rise to 1.9) and rent (.03 rise to 1.2). Are we seeing the effects of investing in 401K’s and real estate? Interest goes down from 2.1 to 1.8% of total income.
The 95 to 99 group is the same. Dividend rise from 3.2 to 4.7 and rent from 1.8 to 2.2 with interest income declining from 3.9 to a low of 2.9.
Even the top 1% is similar. Dividend income rises from 4.2 to 6.6. Rent rises from 2.5 to 2.7 and interest declines from 5.1 to 4.8.
Income from interest is at it’s lowest in 2004 for all 3 groups.

But, when we look at the top 0.1% we see the greatest rises here. Dividends goes from 5.2 to 10. Rents don’t rise as great as the lower 2 groups going from 2.9 to 3.1. However, interest income does the opposite of what we saw, it rises from 6.7 to 7.1. The other groups fell.

The key to the puzzle I believe is in the income from entrepreneurship and the amount of income in the top 1%. For the lowest 2 groups income from entrepreneurship rises. 5.0 to 7.4 in the 90 to 95 group, 18.9 to 21.5 in the 95 to 99 group. The top 1% has a healthy change from 26.5 to 29.1, but the top 0.1% only rises form 31.3 to 35.1. As a % change this is the smallest.

The income in 2005 for the top 1% was approximately 2.5 trillion dollars. In 2005 the top 1% has about 22% of the income, the top 0.1% has 11%. We are talking a lot of money in the top 0.1%. I think it is enough to influence savings when you consider that the 0.1% group is earning a rising percentage of income from saving type investments than from income generating investments. They are the only group with an increase in income from interest. The rest of the people, mainly the 90 to 99% group are putting their money into things that make income. That is business, income generating real estate and stocks .
Thus, what we are seeing is a trend that as income goes up (with the majority from wages for all) people put their money in to savings vehicles of less risk. The 0.1% crowd is packing it away in interest bearing stuff. Those at the lower end will try to increase their income via income generators; entrepreneurship and rents. Being that equity does not count as savings, such only shows up in rents. Entrepreneurship would not show up in the savings rate either. It appears we have a transition from trying to increase income via work through entrepreneurship and real estate to more passive income of dividends to just plain playing it safe with interest when you have income that puts you in the stratospheres (about $5.5 million per year) as oppose to the $96K entry fee to the top 10%.

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More on Income and saving the rustbelt

This is a continuation of looking at the income of the top 10% of this country. Before we go further, let’s look at what kind of a money machine we are when compared to other countries.
This is a chart of GDP by country for 2005 based on data from data360.org.

We seem to be quite the money generator. Japan, being next in line is only 36% of us. However, look at GDP per capita:

To accomplish what Switzerland has achieved we would have needed 16% more in GDP for 2005. That is raising our’s from $12,455 trillion to $14,453 trillion. Switzerland is considered to have a more equal distribution of income with the top 20% taking 40.3% compared to us (or US) at 49.7%. The wealth held by the top 10% is 71.3% for Switzerland and 69.8% for us. If you would like to see more on distribution, this article has a bar chart of income for the middle class as a percent of the top 10% by country.

Households in the top quintile, 77% of which had two income earners, had incomes exceeding $91,705. Households in the mid quintile, with a mean of one income earner per household had incomes between $36,000 and $57,657.

Recall that for the top 10% we are talking breakouts of:
90 to 95% $110,424
95 to 99% $176,925
99 to 100% $812,497
At 90% $96536, at 95% $130,373 at 99% $310,062.
The low limit for the top 20% is $88,030 (Wikipedia). The average individual income for a college graduate is $45,500 (2004, Wikipedia).

I point all this out because I believe our thinking about what middle America is, as defined by the American dream needs to reconsider the income it actually takes. The bottom of the top 20% is not far from the start of the top 10%. I thus question what are we talking when we talk “middle America”? Is it based simply on an income number at the peak of a curve, or does it refer to a defined life style? Part of the American Dream is home ownership (yes we all know that ownership is at record highs, for now anyway). Yet according to this study, they find:

However, most of the gains have been among families without children and upper-income families with children. The study defines upper-income families as those families that earn above 120 percent of local area median. In 2003, the homeownership rate for upper-income families with children was 90.8 percent, while the rate for their low- to moderate-income counterparts was significantly lower at 59.6 percent – yet in 1978 some 62.5 percent of low-to moderate-income working families with children owned their homes.Ultimately, had the 1978 homeownership rates for working families with children prevailed in 2003, an additional 2.3 million children would now be living in owner-occupied homes.

If you would like to see how your area is performing, they have an interactive page that let’s you choose the location and the jobs.
The dream seems now only to be a definite with a 2 person, college educated and working household. That combination is not far from being in the 10% group. Thus, we have raised the dream to something beyond which a large portion of the population will not reach considering only 28% have a 4 year degree even though 64% of high school students are entering college. It looks even worse with people suggesting that you need an IQ of 110 to succeed in college. I mean, can we push the dream any further out or be anymore aristocratic in our arguments? While we have done this, the median income for a bachelors has been going down from a high in 1999 of $70,925 to $68,728 in 2003. In fact, all levels of education have seen a decline and anyone with an associates degree or less has seen the median decline to less than that earned in 1991. But it does suggest that 2 people with an associates could even be in the top 10%!

Was the American Dream based on 2 people working or 1? Was the dream that more people would obtain it or fewer as time passed and the country earn more?

We have now arrived at that entity called income. The thing that is so necessary to get the American Dream (or save a state or few). The following 4 charts look at the 4 sources of income: wages, entrepreneurship, dividends and interest based on sub groups of 90 to 95%, 95 to 99%, 99 to 100% and 99.9 to 100%. The first is dividends. It is obvious, the top is not getting the money from this.

The next is interest. The only curve I found that looked similar to the post 1950’s is the federal fund rate. So, it appears that as THE bank raises what it will charge, people will take some advantage of it. There is a lag in the time the rate starts to decline and when the population moves from this form of income.

Next is entrepreneurship. I think this shows, that something more than freeing up capital has to happen to generate a shift of earning money from just going to work to earning money from creating work. Note how it moves counter to income from interest.

Even those in the low end of the top 10 take advantage of a life altering event. But, it is clear just going to college is not going to push an entrepreneurial spirit considering this lower 90 to 95% group is at the upper end of the college degree for a single person working. They show minimal initiative toward self reliance in producing income for themselves. The next chart confirms this. They do take advantage of interest rates rising, but they are not buying companies or shares of companies to make money. They are following the what I would consider the American Dream, go to work, earn a comfortable living that supplies the comforts and advantages of modern living.

Finally is the share of income from wages.

The lower end of this group is not seeing an increase of income from wages. But look at the change in the top 1% and the top 0.1%. They have the greatest increase of their income coming from wages. The entire top 5% sees this, but it is the very top that is seeing a doubling (32 to 63% for the top 1%) and tripling (18.1 to 58.2 for the top 0.1%) of the percentage from wages. Where do you suppose such an increase in income via wages could be coming from? What is the motive or reasoning?

So, the very top is getting a higher share of the income we (all of US, they don’t do it alone) generate via starting companies and then are paying themselves greater shares of the income said company generates. Is this not greed? Or is there an insulating effect do to globalization? I believe it is both and frankly don’t care which came first. Is this what we would expect if supply side tax cutting was raising all boats as suggested? It sure is not trickling down. I say it is not what would be expected. I would not hypothesize that we would see only the top 5% contributing to growth via entrepreneurship as compared to the pre 1929 crash when the top 10% contributed toward growth via entrepreneurship. Loosing the 90 to 95% group to wages is most telling as to how much the American Dream is one of an implied contract based on labor and not on entrepreneurial freedom. It is also a sign of failure of policy if promoting entrepreneurship as a viable means of obtaining the American Dream was the goal.

These charts show that everyone is earning the majority of their money by working for someone. Again, the American dream is based on labor supplied to another, even for the highest income earners. If we are going to change what is happening in Michigan or Ohio or in this country, we are going to have to figure out a way to get those who decide how much some one will be paid to start paying more to those below the top 1% because the top 1% is where the greatest concentration of income is happening and it’s happening through wages. It is not that we don’t have the growth and thus don’t have the money. We have it.
Update: I have fixed the link for the dividends chart and removed one that was a dead end. Sorry for the mix up.

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Tax breaks for dogs?

Here’s a little fun one for you. Should pets, in this case dogs, be tax deductible like children? That’s right. From Congress.org a person comes up with this proposal:

My husband & I have no children because we cannot afford to have children living on Long Island. But we do have 2 dogs – 2 very expensive dogs – and they are our kids. If I should mistreat, neglect, abuse or deprive my dog of health care in any way, I can be arrested for animal cruelty. But yet, here we are, spending thousands and thousands of dollars each year giving my dogs the best care in emergency and non emergency situations, what do we receive? My proposal is to be able to declare my dogs as dependents on my taxes at the end of the year.

Just to put this in perspective, page 13:

The number of families with children under 18 is projected to increase minimally from 32.6 million in 1995, peak at 33.2 million in 2001, and then slowly decrease to 32.2 by 2010

Google Answer presents:

New figures just released from APPMA’s 2005-2006 National PetOwners Survey (NPOS) show pet ownership is currently at its highest level, with 63 percent of all U.S. households owning a pet which equates to more than 69 million households. That’s up from 64 million in 2002 and 51 million in 1988 when APPMA’s tracking began.

There seems something odd about these numbers for a nation that professes to be pro children.

If you would like to read more letters for or against you can go here. There are 2500 already with 49% running in favor.
If you would like to send your own letter go here.

Click on either the dog should be or should not be letters. At the bottom of the page is a letter that starts with should or should not be depending on which you clicked.

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Has Jacob Marley been visiting?

After reading Stormy’s post on global warming posted Thursday, 3/12, I heard on NPR’s Market Place today, Thomas Friedman’s solution to the problem – Greed. (Green with a D) Now, there is something wrong I think when a negative character trait is professed as a good thing and a necessity to solve a community problem. It’s to bad he did not stop at this:

that basically argues that green is the most strategic capitalistic — and I think progressive — ideology now for rebuilding America’s future. By confronting climate change, by taking the lead in doing that, by setting really high standards for our industries and businesses, we are gonna stimulate, we can stimulate an enormous amount of innovation. Innovation that will really strengthen our companies to compete globally in what is clearly going to be the next, great, global industry

Is this the work of the ghost of Marley?
But, then I read PGL’s post on a review of a book that challenges the Church of Global Trade. In the interview of Gomory at The Nation, and the author notes:

Public investment in new technologies and industries, I would add, may not achieve much either, if there is no guarantee that the companies will locate their new production in the United States

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Mr Gomory’s solution:

He wants to re-create an understanding of the corporation’s obligations to society, the social perspective that flourished for a time in the last century but is now nearly extinct. The old idea was that the corporation is a trust, not only for shareholders but for the benefit of the country, the employees and the people who use the product. “That attitude was the attitude I grew up on in IBM,” Gomory explains. “That’s the way we thought–good for the country, good for the people, good for the shareholders–and I hope we will get back to it…. We should measure corporations by their impact on all their constituencies.

You think old Marley’s bones got to him too?
Which leads me to Bruce Webb’s comment (comments I agree with) in Stormy’s post:

Any changes that don’t ultimately cut costs or boost productivity are in that light a violation of his charter.

Charters are granted by “we the people”. They are a privilege. They are not a right. We have the ability to solve the destruction of the environment. We just have to remember that the economy functions for us. What do we want it to do?

I think Lee Iacocca had a visit too. He has a new book out. It begins:

Am I the only guy in this country who’s fed up with what’s happening? Where the hell is our outrage? We should be screaming bloody murder. We’ve got a gang of clueless bozos steering our ship of state right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane much less build a hybrid car.

But it is this bit, almost at the end of the excerpt that made me chuckle:

We didn’t elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bobblehead on Fox News will call them a name?

Yup, Marley’s been a very busy ghost. Can’t wait to see the results after they all get their visits from the past, present and future ghosts.

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