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

Americans’ Net Worth Up 10%!

Well, not all Americans, but if you are one of the 400 richest people in the country then, on average, your income is up 10%. If, on the other hand, you are part of the other 90%, then you are now paying higher interest rates on your loans, and bearing your share of the debt created by the Bush administration’s “tax cuts for the wealthy and spend” policy, and more likely to be or become unemployed than you were a few years ago.

Interestingly, the two richest people on the list are both Democrats and both opposed ending the estate tax. Buffet also vigorously opposed reducing or eliminating the dividend tax (I don’t know where Gates came down on that one).

AB

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Bush the Diplomat

MSNBC NEWS SERVICES Sept. 19 — With little chance that a resolution on Iraq will be approved quickly, President Bush is pinning his hopes on face-to-face diplomacy — including meetings with two of the most vocal critics of his policy in Iraq, French President Jacques Chirac and German Chancellor Gerhard Schroeder — during his visit to the United Nations in New York on Tuesday.

An excellent chance to put Bush’s outstanding diplomatic skills to work.

Kash

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Yet Another Bush Failure: Steel Tariffs

Later today the International Trade Commission (ITC) will release its midterm report about the effects of the steel tariffs that Bush imposed in March of 2002. It looks like the steel tariffs have been yet another Bush failure.

The Washington Post discusses why, and has a fascinating peek into the Bush Administration’s internal debate over the steel tariffs. The President who, while campaigning for President said that free trade was “not just monetary, but moral,” and that he would “work to end tariffs and break down barriers everywhere, entirely, so the whole world trades in freedom,” imposed the highest tariffs the US has had on steel in decades. Estimates mentioned in the Post article suggest that the steel tariffs have cost the US tens or potentially hundreds of thousands of manufacturing jobs over the past 18 months – and more importantly to the Bush administration, the tariffs have potentially cost them support in crucial swing states without winning the support of steel unions. That’s why the ITC report will make interesting reading. Well, okay, at least the summary will make interesting reading.

The real question is this: will the Bush administration realize that the steel tariffs have backfired, and reverse course? They have the option of reducing or eliminating the tariffs, if they wish. Which brings us to my favorite line from the Post article:

The only reason they won’t do it [remove the tariffs] is if they’re unwilling to admit they made a mistake,” said a Republican strategist who works closely with the White House.

Good thing this White House has so clearly demonstrated the ability to admit it when they make a mistake. Anyone want to place odds on the chances that they’ll reverse their steel policy?

Kash

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US Morale in Iraq is Good. Really.

Today’s Guardian contains a powerful commentary written by Tim Predmore, a US soldier who has been serving with the 101st Airborne Division in Iraq since the beginning of hostilities. It starts off with this:

For the past six months, I have been participating in what I believe to be the great modern lie: Operation Iraqi Freedom.

Luckily, the Bush administration and the Pentagon assure us that things are going well in Iraq, and that morale among the US troops in Iraq is good. Whew. So we don’t have to worry when Predmore writes:

I once believed that I was serving for a cause – “to uphold and defend the constitution of the United States”. Now I no longer believe that; I have lost my conviction, as well as my determination. I can no longer justify my service on the basis of what I believe to be half-truths and bold lies.

Read the piece.

Kash

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More Lies from the Vice President

Cheney’s lies about the existence of an Iraq – 9/11 connection on his Meet the Press appearance last Sunday got some long-overdue attention, as pointed out in yesterday’s AB post.

But Cheney, being the fair-minded guy that he is, didn’t restrict his lying to just one topic. He actually told several lies about economic issues in that appearance, as well. Let’s go to the tape…

Transcript from Meet the Press, September 14, 2003:

VICE PRES. CHENEY: The deficit that we’re running today, after we get the approval of the $87 billion, will still be less as a percentage of our total capacity to pay for it, our total economic activity in this country, than it was back in the ’80s or the deficits we ran in the ’90s. We’re still about 4.7 percent of our total GDP…. A significant chunk was taken out of the economy by what happened after the attacks of 9/11.

MR. RUSSERT: And tax cuts.

VICE PRES. CHENEY: Tax cuts accounted for only about 25 percent of the deficit.

[And a minute later:]

VICE PRES. CHENEY: The cost of one attack on 9/11 was far greater than what we’re spending in Iraq.

How many lies about economic issues can we find in these few sentences? At least four.

1. “We’re still about 4.7% of GDP.”

In actuality, the White House projects that the budget deficit will be $455 billion in 2003, and that GDP will be $10,746 bn in 2003. (You can find the White House estimates here. ) If you add the administration’s request for $87 billion, my calculator tells me you get $542 billion. Which my calculator then tells me is 5.0% of GDP. (It’s a very clever calculator.) Wait, maybe he was referring to FY2004, not 2003. Well, the White House projection is a deficit of $475 billion in 2004, not including Iraq. Add in $87 bn, and you get $562 bn, which is… 5.0% of their projected 2004 GDP of $11,266 bn. So he lied: the deficit is significantly above “4.7% of GDP.”

2. “The deficit we’re running today… will still be less… than it was back in the 80s or the deficits we ran in the 90s.”

If you check the data (which you can find in Table 1.2 of this White House document), you will find that there are only two years in the 80s when the deficit was greater: 1983, and 1985 – and in 1985 it was just barely greater, at 5.1%. Cheney’s statment implied that we regularly ran greater deficits back in the 80s. It is therefore misleading at best. And in the 90s? There are zero years in the 90s when the deficit was 5.0% of GDP, so that’s just a plain old lie.

3. “Tax cuts accounted for only about 25 percent of the deficit.”

The CBO has conveniently provided estimates of the cost of the various Bush tax cuts, here here and here. If you add up the estimates of the cost of the tax cuts contained in those three CBO documents, you get a total cost of tax cuts of $199 billion for 2003 and $293 billion for 2004. The White House projection of the deficit is $455 billion in 2003, and $475 billion for 2004. My clever calculator tells me that the tax cuts therefore are responsible for 44% of the deficit this year, and 52% of the deficit next year, once the additional Iraq request is included. So he lied: tax cuts definitely account for more than “about 25 percent” of the deficit.

4. “The cost of one attack on 9/11 was far greater than what we’re spending in Iraq.”

The CBO also has conveniently estimated the cost of 9/11, published in this document. They added up all spending on disaster relief, increased spending on counter-terrorism, increased defense spending related to the invasion of Afghanistan and other counter-terror operations, victim compensation funds, and the airline bailouts. How much is it? The total of 2001 through 2004 will be about $68.3 billion. As far as I can tell, the Bush administration’s original request for $64 billion for Iraq, plus its new request for $87 billion for Iraq, adds up to a number larger than $68.3 billion. So Cheney had it exactly backwards: Spending in Iraq is far greater than the cost of the attack on 9/11.

Four easily verifiable lies in just a few sentences, by the Vice President of the United States on national television – pretty impressive! Lying liar.

Kash

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Blogs you might have missed

Here are some blogs that are new, new to me, or that don’t get read as much as they should (in no particular order):

Check ’em out.

AB

UPDATE: Dwight Meredith (Politics, Law, and Autism) unfortunately decided to stop blogging (though I hope to someday see him showing up as a contributor to one of the group blogs out there). But Dwight is keeping his archives available, and he now has his posts indexed by category and sub-indexed by topic. Political posts are itemized here; Law posts here; Autism posts here. The system works pretty well. I was able to find one of my favorite posts (from any blog, not just PLA) very quickly.

UPDATE 2: I should also add Jack O’Toole to this list.

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Comments Policy

I’ve noticed other bloggers catching a little flack when they delete comments without having an formal comment policy. To avoid that, here’s my announcement:

Spam in the comments, even if it’s promoting a lefty site, will be deleted. For example “Cool site. Great post. For more check out my blog at XYZ.blogspot.com.” Linking your own, or others blog is fine, actually encouraged, whenever it’s on point. If something is a clear cut and paste promo, that is clearly being posted as far and wide as possible, I’ll delete it.

Beyond that, I’m unlikely to delete posts based on content. I have a pretty high tolerance for offensiveness, so if you can manage to cross that line then you’ve done something pretty extreme (e.g., making overtly racist comments or threatening people) and I’ll exercise my editorial powers.

We now return to our regularly scheduled worrying about the deficit and pointing out the flaws in Republican policies.

AB

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Sometimes Up is Up

First, Dick Cheney spends much of last Sunday lying. Finally the press wakes up and decides to write a few articles that point out the lies (e.g., this). And there actually was a bit of a backlash.

Then Don Rumsfeld actually tells the truth:

“I’ve not seen any indication that would lead me to believe that I could say that [Saddam Hussein had a role in 9/11]

Now Bush is telling the truth too:

“We’ve had no evidence that Saddam Hussein was involved with Sept. 11,” Bush said.

It would be nuts to predict a Cheney resignation is impending (and I’m not doing so), but both the Bush and Rumsfeld statements really do make the Vice President look like a fool, a liar, or both.

AB

UPDATE: Atrios offers a clue to what’s going on here:

They’re just trying to defuse the pack mentality of the press – once it’s cool to pile on, they’ll keep doing it.

Cheney made the usual lies and exagerrations, but they followed on the heels of declining satisfaction with the war and an unpopular request for $87b. Smelling the wind, members of the press started calling him on it–Cheney didn’t do anything different, the Press did. As we saw with Gore, once members of the press get an idea stuck in their head, they’ll run with it, facts to the contrary notwithstanding. Gore Lies. Bush Stupid. Blather, Write, Rewrite. So, to prevent a “Bush lies about the war” meme from really getting locked into the mind of the press, Cheney had to take the fall. We’ll see if it worked.

UPDATE 2: Oops, Josh Marshall had this story yesterday.

UPDATE 3: And for a little more context–and to see that the conflation of Saddam and 9/11 predated Dick Cheney’s Sunday MTP appearance–check out this September 6th post by Angry Bear’s Friday blogger, Kash.

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Grasso

Via Reuters:

New York — New York Stock Exchange chairman Richard Grasso resigned his position during an emergency board meeting last night as the growing condemnation over his $140-million (U.S.) compensation package threatened to damage the exchange itself.

There’s a lot of outrage directed at Grasso and his giant compensation package. For example, CalPundit writes that

If people like Grasso are shunned and embarrassed over this kind of legalized thievery often enough, maybe we can put an end to it and redirect some of that money back to shareholders, to whom it properly belongs in the first place.

I agree that the money should be directed to shareholders, but that’s the direct responsibility of the board (in this case the NYSE directors), not the CEO. The CEO’s direct responsibility is to maximize the performance of the firm. The board’s job is to represent shareholders’ interests and exercise oversight over the CEO and topmanagementt.

Simplifying somewhat, if the CEO does his or her job well, then there’s a pool of profit created every year (“free cash flow”, as it’s often called). Some portion of that is paid to top management, including the CEO, and the rest goes to shareholders. The board’s job is to ensure that the allocation of those profits serves the interest of shareholders. Certainly, we hope that CEOs will voluntarily decline excessive pay. But when was the last time you turned down a pay raise? If your pay is too high, is it your fault or your manager’s fault? I’d say the latter.

Perhaps Grasso should go, but by all accounts he ran the NYSE well, even though he was overpaid for it. The real culprits, the ones who really should go, are the directors of the NYSE. In this case, the directors are particularly culpable because they are primarily CEOs of companies that trade on the Big Board. As such, overpaying Grasso, whose job responsibilities include monitoring member companies, has the appearance if not the actuality of a pay-off for lax oversight.

AB

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