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

So, you want a pipe line? Jobs? Addendum: Ok veto the XL, it doesn’t matter.

Addendum below.

A very interesting article at Daily Kos has been posted.   Title: There’s been HOW many Pipeline spills in Alberta in the last Four Months?

Seems the Canadian news system does not find oil, gas and toxic water spills from the mining of carbon fuels to be news worthy.   But, the native Indian sure find it news worthy.  Their news outlet, West Coast Native News has been tracking all the spills.   You know, it’s their yard getting contaminated.

The Kos article quotes WCNN:

Over the past year WCNN has reported on many Crude oil and Toxic produced water spills all over Alberta, in fact we have reported over 600,000 Litres of toxic crap that has been spilled just last month and yet not one mainstream media outlet has picked up the incidents. So lets take a look back at just the last month (October) and see just what the mainstream is not telling you.

Of that 600,000 liters (165,107.5 gallons or 3931 barrels) 136,000 is crude oil.   That is, for us non metric thinkers, 35,927.4 gallons or 855.41 barrels of crude oil spilled in one month.  How long has there been mining in the area with pipeline transportation?

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The mayors report in on Income Inequality (and miss the conclusion).

(lightly edited for ease of reading)

Yesterday the Conference of Mayors and the Council on Metro Economies and the New American City released a report prepared by IHS Global Insight that is a repeat and thus update of a similar study performed after the 2001 – 2002 recession.  Income and Wage Gaps Across the US.

I caught wind of it today reading our state news paper, it was on page 1 no less. I suggest reading it and then using it to judge your favorite candidate in the coming elections. See if they mention this report. There are 357 metro areas reported on in the index pages. Even Providence RI is noted. So look yours up.

The report looks at the jobs being created and the wages they are generating.  The trend since the 2001/02 recession is that jobs lost in the recession are replaced by jobs producing lessor wages. No surprise as we have been hearing such for a while. However, this study documents that the difference in the wages is even greater this time. After the 01/02 recession it was a 12% difference or $23 billion in annual wage loss. After this current recession it is a 23% difference! $93 billion! Yes, it is because manufacturing and construction jobs are being replaced by hospitality, health care and administration jobs.

“Extensive job losses in high-wage manufacturing ($63K) and construction ($58K) sectors were replaced by jobs in the lower wage sectors of hospitality ($21K), health care ($47K), and administrative support ($37K).”

Some more general findings:

The 2012 household median income of $51,017 was, in real terms, the lowest since 1995. It had peaked at over $56,000 in 1999, and measured $55,627 in 2007 before the recession. It has fallen in each subsequent year.…the 20% of households with the highest incomes, which rose from 43.6% in 1975 to 51.0% in 2012. Moreover, most of this gain was among those in the highest 5% of income, which rose from 16.5% in 1975 to 22.3% in 2012, a gain of $490 billion in 2012. Each of the lower quintiles experienced a declining share of income.

Nothing too new there as with some other facts noted early in the report. However they do something I have not seen and I believe does a better job of presenting income distribution change in this nation. The cry we are hearing regards the decline of the middle class. But then the numbers are presented as blocks of 20%. In this report they divide the income distribution into thirds. Thus, you have a middle third…the middle class?

…we can also consider a broader group of middle income households, the middle third of the income distribution. In 2012, among US households, 34.8% earned less than $35,000, 31.8% earned between $35,000 and $75,000, while 33.5% earned more than $75,000.

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Explaining Class Warfare

Last month one hundred and fourteen thousand unemployed moochers…suddenly yank the government teat out of their mouths, get off the couch for forty hours a week? Why?
I say follow the money; cause I found out, that right around the time those people got those jobs…they started getting paid!
And just where does that money come from? Right out of the pockets of the job creators. How’s that for your socialist redistribution of wealth? Folks, it’s called class warfare.
Mr Colbert has created a new party that will issue a certificate to sooth the hurt of the job creators. The Certificate of Richness issued by:
Protecting Industry Titans and Yachtsman party. The P.I.T.Y. party.
And right on cue:
If President Obama is re-elected and raises taxes, Westgate Resort’s David Siegel says he will have to lay off workers and downsize his company — or even shut it down.

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Tax cuts for jobs. NOT! Another tax cut that is not paying out

First a qualification. I am basing the following on info I found on the net. If the info is wrong, then I stand corrected as to who is or is not paying but not as to what happens when a large entity does not pay. The specific city and company are used purely for example purpose because of familiarity. What follows could be any municipality with a similar size company calling it home.
Lately in the city of my flower shop the big talk is a $10 million deficit in the school department. It’s a funny story. See, the department hired a couple people and these people, along with the help of the city council and the school committee the budget numbers became not real. They budgeted $59 million but have spent $66.6 million. The total $10 million is a 2 year deficit. The funny part…we had a surplus. Though, where the surplus went to no one knows. The school committee insists there was no funny business and even voted down an investigation. So, if there was no funny business, then who gained and what did they gain by covering up a deficit? What benefit is there about lying about a deficit?
Of course, this is also a state funding issue. You see, the city has the typical city size problems that the surrounding town do not have. This article notes:
“The committee chair pointed out that Lincoln has a budget of $48 million to educate half the students Woonsocket teaches with a mere $59 million.
“And they don’t have the special needs we have. They don’t even have a quarter of the IEPs we deal with,” she said.”
On top of this, we’re one of those states that has been passing ALEX type legislation. In particular we passed the one that thinks it is smart of a state to set a cap on how much a municipality can raise taxes in any given year. The city notes that default is an option, but is currently begging the state legislature to allow a supplemental tax bill.

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Guest post: The Obama Record after 3 years – Jobs and GDP

by Jon Hammond at Econographia

Guest post:  The Obama Record after 3 years – Jobs and GDP

The performance of the economy over President Obama’s tenure to date has been much discussed in light of the severe contraction that began in December 2007 .. and the policies implemented to correct course and restore growth. As of early 2012, the economic recovery shows signs of gathering momentum. Since the enactment of the Recovery Act .. and especially now with the presidential campaign season heating up .. misrepresentations have been piling up. Despite the fact that the economy has been creating jobs for 22 consecutive months, his opponents continue to attack his record … a recent example: “This president has been on the attack and has been a job killer,” GOP frontrunner Mitt Romney told a town hall meeting in Salem, N.H. Another example: “Either the president’s economic policies are killing this economy, or his lack of leadership,” Rick Santorum said in September. “Either way, President Obama is to blame.”

Here’s the factual record on economic growth and private sector job growth. In both cases, the graph displays the data points from the beginning of January 2007, showing the run-up to the Recession, followed by the enactment of the Recovery Act and the subsequent recovery through December 2011.

The two graphs below display:

Quarterly Real GDP, Q1 2007 though Q3 2011, sourced from BEA NIPA table 1.1.6 here:
Private Sector Jobs, monthly net change January 2007 through December 2011, sourced from the BLS data series CES0500000001 here:

Quarterly Real GDP Q1 2007 – Q3 2011, billions 2005 dollars:

Net Private Sector Jobs January 2007 – December 2011, month-over-month change (000s):

As the historical record clearly shows, the economy has rebounded to pre-recession levels in both economic output and private sector job growth. Since NBER declared an end to the Recession (June 2009), the economy restored almost 700 billion in real GDP and has added a net 1,992,000 private sector jobs. Moreover, from January 2010 through December 2011, the business sector has generated net job growth of over 3,000,000 jobs. The partisan rhetoric simply doesn’t match the record.

(I will comment in comments.)

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Looking Beyond Election Day

NYT Robert Reich calls our attention to post election 2012 life and political realities:

Looking Beyond Election Day

By Robert Reich, Robert Reich’s Blog

Most political analysis of America’s awful economy focuses on whether it will doom President Obama’s reelection or cause Congress to turn toward one party or the other. These are important questions, but we should really be looking at the deeper problems with which whoever wins in 2012 will have to deal.

Not to depress you, but our economic troubles are likely to continue for many years – a decade or more. At the current rate of job growth (averaging 90,000 new jobs per month over the last six months), 14 million Americans will remain permanently unemployed. The consensus estimate is that at least 90,000 new jobs are needed just to keep up with the growth of the labor force. Even if we get back to a normal rate of 200,000 new jobs per month, unemployment will stay high for at least ten years. Years of high unemployment will likely result in a vicious cycle, as relatively lower spending by the middle-class further slows job growth.

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A little OWS, a little 99%, a little history

So today I read at the Yahoo Finance (it’s my home page because I can look at the stock numbers on the left and read the headline on the right for a guaranteed laugh) that  John Mauldin thinks the OWS would be better off if they occupiedCongress:
Mauldin believes America still has time to figure out a path out of what he says is the big problem worldwide: “We’ve over committed public monies and we don’t have them.” While some what sympathetic to the protestors’ frustrations, Mauldin says their anger is misdirected.
“My message to the ‘Occupy Wall Street’ guys: if they really want to If  they really want to go after the source of the problem, they should go occupy Congress,”
Instead of focusing on Wall Street,Washington and the protests should be focusing on reducing regulation and making it easier for new businesses to start, Mauldin says. To that end, he offers a new slogan I somehow doubt will showup at any Occupy Wall Street protest anytime soon: “Up with Entrepreneurs”
As I understand it, OWS is about economic equality. President Roosevelt referred to it as the economic royalty. I just don’t see how one can stop, look and listen to OWS and think “go tell congress to further deregulation”. John Boy can’t be this much of an idiot, can he?
My sweetheart gets home from the dentist. $4000 dollars worth of bridge work is down the drain because a tooth of the bridge went bad. 

For those who don’t know, we are the “Entrepreneurs” John Boy is referring to, thus we are paying for our health insurance, no dental. But, she was offered a payment plan. Has a nice dental name at 14.5% interest! This bit of private market solution to paying for health care is brought to you by GE Financial. Yes, the GE of Jeffrey Immelt, Obama’s job creating adviser. Hey Obama? Did you read my state of the union?  Obviously not or Jeffrey baby would not be your man.
Did you hear that JP Morgan was all blowed up? Yes, I’m not lying. People got pissed at Wall Street and blew up JP:
“During this period anarchists and socialists held protests on Wall Street out of a similar sense of frustration and rage at the banking system. The movement culminated in what was known as the greatest act of terrorism on American soil: the 1920 bombing outside J.P. Morgan and Company
Thirty eight people were killed when the horse and wagon bomb went off at noon on Sept 16, 1920. The perpetrators, thought to be anarchists, were never caught, but their exploits and the aftermath were captured by photographers.”
Check out the pictures here. 
Why do we not hear about this history considering the present times? I know, stupid question. To ask it is to give purpose to OWS. Though one sector of this nation seems to remember a portions of this history or we would not be hearing the pejoratives being slung a the 99%’ers. You know Anarchists, socialists, communists out to destroy the American Way (A catchy phrase brought to you by the National Association of Manufacturers via General Food’s CEO, the US Chamber of Commerce and AT & T’s monopoly is good all via Madison Ave, Time Magazine 9/28/1936) .
Which brings me to my original question since the shit hit the fan: HOW MANY TIMES DO WE HAVE TO DO THIS? HOW MANY FREAKIN’ TIMES DO WE HAVE TO LEARN THE LESSON?
Obviously from the above 3 subtopics, quite a few more times as we seem to have not learned the definition of Rat Race yet: A rat race is a term used for an endless, self-defeating or pointless pursuit…
I think I know what is wrong with US today. When I typed in Deja Vu at youtube,  amazingly this tune did not even come up in the suggestion list. 

No, I had to actually know that CSNY wrote what I consider the true musical capture of the concept of deja vu…the song that is most appropriate for the application of the concept today. I say this because they intentionally wrote the song so that it does not repeat any one section (heard years ago in an interview).

Get it?
(I haven’t forgotten the tax tables. It’s a coming.)

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Notes toward A Blog Post on Chrystia Freeland’s Interview of GE CEO Jeff Immelt

UPDATE NOTE: The following isn’t complete. Many of my notes from the latter part of today’s interview can be found on Twitter, hashtagged #Immelt. At the moment, I both (1) don’t have easy access to them and (2) have other things that need to be done. Feel free to look there, and/or mention anything you want discussed here.)

The fake “news” of the day will be Immelt’s disparaging of America and Americans.

The semi-real news of the day will be that Immelt threw President Obama under the bus four or five times before finally saying that he “respects the President and respects the Presidency.” While this is progress from Jack Welch thinking that Buying George W. Bush the office meant that his firm would be exempted from cleaning up the PCBs GE dropped into the Hudson River (it did result in a nine-year delay and the likelihood that taxpayers, not GE, will foot the large majority of the bill), it’s not exactly a ringing endorsement of the man who gave us the Unforced Error of Simpson-Bowles.

Jeff Immelt, unlike Henry Aaron, believes that Simpson-Bowles is what we need for “growth.”

Jeff Immelt admits that, while the Board of Directors has some input, CEO pay is all about “getting what you believe you deserve.”

Jeff Immelt declares that if unemployment gets back down to 6%, no one will care about his being paid $21.5 million last year (about 40% of which appears to be an increase in his pension benefits; other GE pension contributors haven’t been so fortunate) to continue running GE into the ground to a standstill.

Jeff Immelt says that the US is 25th in math and 26th in science. (He’s wrong on the latter; we’re 17th.) He then spewed some horseshit about the “crisis” of Germans believing that it’s easier to find skilled workers in Mexico than it is in the United States.

Why do I call this horseshit? Well, let’s look at the two countries compared by Immeltian standards (link is PDF):

There are two three possibly-reasonable explanations. Either (1) there are a lot of Stupid Germans or (2) the places where Germans trying to hire are Significant Laggard or “Business Friendly, School Crappy” States.

Oops, or (3) the Germans pwnd Jeff Immelt, who then didn’t check the data.

And that’s without noting that, if you adjust for demographic issues such as poverty or consider racial inequalities, the U.S. is right at the top, no matter what Jeff Immelt says.

Otherwise, mostly, Jeff Immelt lies through his teeth, and Chrystia Freeland—who was tougher on George Soros last year—lets him get away with saying it.

It is left as an exercise whether this is because her boss openly declaring this was going to be a powder-puff interview (“I’m a big fan” of a man who has lost 60% of shareholder value for his investors over the past ten years) or because she decided to let Immelt hang himself. (I know which way I’m betting.)

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Reid’s Plan for Job Creation

by Linda Beale

Reid’s Plan for Job Creation

Harry Reid announced on Wednesday (Oct. 5) that the Senate would take up Jobs Act legislation (S. 1549) soon, but that the offsets in the president’s proposals would be replaced by a 5% surtax on those making more than a million that would raise about $445 million.  See Bolen & Lorenzo, Senate to Debate Jobs Bill Paid For with 5% Millionaire Surtax, BNA Daily Tax Report 194 DTR G-7 (Oct 5, 2011).

Note that this means that, once again, Congress will punt on the question of taxing fund managers fairly on their compensation, since the carried interest provision would be one of the offsets replaced by this provision.  The carried interest provision should be passed no matter what other offsets are used.  It is an unfair provision that treats fund managers as a specially protected category of worker with preferential rates on their compensation income.  Time to end it, once and for all.

Not surprisingly, GOP senator Hatch complained that this small surcharge on millionaires would be a “massive” tax increase on “small businesses”.  Id. How many times do we have to remind Congress that most small businesses don’t make millions in profits, that those who have millions can pay a 5% tax without undue distress (compared to those with a ten dollar bill being able to support their family with food and shelter), and that 5% of $1 million is not a “massive” tax increase.  50% of $1 million might be, but 5% is simply not.

Also posted at ataxingmatter

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