Barackface: Great Recession

Showing posts with label Great Recession. Show all posts

Monday, August 15, 2011

The Stupid, Stupid Bush Tax Cuts

Image via WikipediaThe Bush tax cuts are the reason the Great Recession happened. The continuation of the same is the reason we are not fully out of the recession yet. And now I have Warren Buffett seconding that opinion.

New York Times: Stop Coddling the Super-Rich: While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors. ........ These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places. ...... Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent. ....... If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot. ....... Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot. ........ I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation. ........ In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent. ........ 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.) ....... I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get. ....... for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

Friday, August 12, 2011

The Stimulus Bill Was Messed Up

Image via Wikipedia

It was too small. It should have been at least a trillion. (Stimulus: Make It A Trillion, Stimulus: Size Matters)
One third of the stimulus going to tax cuts was a huge mistake. That was like appeasing the Republicans, not one of who voted for the bill anyways. When the world appeased Hitler, World War II happened. When Obama appeased the Republicans, the Tea Party happened, and he lost the House.
That one third should have been spent on jobs programs where you train people for a week and you send them out to work for $10 per hour, $20 per hour. (Three Million Jobs)
The number one goal of the stimulus bill should have been to take every American to one gigabit per second kind of internet access. But most of the focus stayed on physical construction. That was the equivalent of FDR putting all his stimulus money into farm jobs. No, he focused on industries, and the jobs of tomorrow.
There was not enough global focus. There were too many Great Depression lessons that were applied to the Great Recession. The number one aspect of this Great Recession is its global component. A new global financial architecture has to be built. That is policy level work.

Monday, August 08, 2011

A Second Stimulus Bill Needed

Image via Wikipedia

New York Times: Second Recession in U.S. Could Be Worse Than First: the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009. ..... When the last downturn hit, the credit bubble left Americans with lots of fat to cut, but a new one would force families to cut from the bone. Making things worse, policy makers used most of the economic tools at their disposal to combat the last recession, and have few options available. ....... the four years since the recession began ...... Today the economy has 5 percent fewer jobs — or 6.8 million — than it had before the last recession began. The unemployment rate was 5 percent then, compared with 9.1 percent today..... the typical private sector worker has a shorter workweek today than four years ago...... Income levels are low, and moving in the wrong direction ...... with construction nearly nonexistent and home prices down 24 percent since December 2007, the country does not have a buffer in housing to fall back on. ..... the economy is smaller today than it was when the recession began ....... Unlike during the first downturn, there would be few policy remedies available if the economy were to revert back into recession. ....... Interest rates cannot be pushed down further — they are already at zero. The Fed has already flooded the financial markets with money by buying billions in mortgage securities and Treasury bonds, and economists do not even agree on whether those purchases substantially helped the economy. So the Fed may not see much upside to going through another politically controversial round of buying. ...... at the end of 2007, the federal debt was 64.4 percent of the economy. Today, it is estimated at around 100 percent of gross domestic product, a share not seen since the aftermath of World War II, and there is little chance of lawmakers reaching consensus on additional stimulus that would increase the debt. ...... “There is no approachable precedent, at least in the postwar era, for what happens when an economy with 9 percent unemployment falls back into recession” ...... 1937, when there was also a premature withdrawal of fiscal stimulus, and the economy fell into another recession more painful than the first ..... Corporate profits are at record highs

Even before this recession hit in 2007 China was on schedule to become the number one economy in the world by 2016. Continued policy mistakes in America might only hasten that process. There has been much self destructive behavior.

The stimulus bill was not big enough. The stimulus money was not spent fast like it needed to be to have any effect. One third of the stimulus bill was tax cuts. That was a mistake. Obama did that to get Republican votes, and no Republican voted for the bill anyway. That instead was seen as a sign of weakness and might have hastened the Republican takeover of the House.

The biggest chunk of the stimulus bill needed to go to taking all of America to one gigabit per second kind of broadband. Instead the biggest chunk of the money went to old economy stuff and to humdrum payments. Paying the unemployed is important, but paying the unemployed is not what creates the next generation of jobs.

The threat of a double dip is very real. And the one thing that can save the country is a stimulus bill.

The biggest mistake perhaps has been to apply Great Depression lessons to the Great Recession. The Great Recession is America reeling from a lack of global institutions that globalization asks for. Capital wants to go global at breakneck speeds, but the global infrastructure to make that happen is not there. The Great Depression gave us macroeconomics. The Great Recession needs to give us globoeconomics.

What is needed is massive jobs programs, massive public works programs. Send a million mentors into the inner city schools, and pay them. Send another million to whitewash the roofs across America, and pay them.

Extending the Bush tax cuts was nothing less than criminal.

New York Times: London Sees Twin Perils Converging to Fuel Riot: Frustration in this impoverished neighborhood, as in many others in Britain, has mounted as the government’s austerity budget has forced deep cuts in social services. At the same time, a widely held disdain for law enforcement here, where a large Afro-Caribbean population has felt singled out by the police for abuse, has only intensified through the drumbeat of scandal that has racked Scotland Yard in recent weeks and led to the resignation of the force’s two top commanders...... there was not long to wait until a new one erupted: across London, skirmishes broke out on Sunday between groups of young people and large numbers of riot police officers, which one officer said were drawn from forces around London. ...... In Enfield, a usually calm suburb, shop windows were smashed and debris lay in the street. In nearby Edmonton, groups of young people gathered near damaged storefronts. In Tottenham itself, roads were closed, a helicopter hovered overhead and squads of police vans swooped in to make arrests in side streets. ....... The march turned into a pitched battle between hundreds of officers, some on horses, and equal numbers of rioters, wearing bandannas and armed with makeshift weapons that included table legs and an aluminum crutch. Looting throughout northern London continued past dawn, leaving streets littered with glass. In daylight, residents emerged to survey buildings, many considered landmarks, that had been left gutted and smoldering. ........ unless endemic youth unemployment in Tottenham was curbed, “this will happen again. These kids don’t care. They don’t have to pay for this damage, we do. Working people do. What do they have to lose?” ...... many voiced concern that looters in other areas of London had been allowed to smash and steal for several hours before officers arrived. ....... Economic malaise and cuts in spending and services instituted by the Conservative-led government have been recurring flashpoints for months. ....... Prince Charles and his wife, Camilla, the Duchess of Cornwall, were attacked in their Rolls-Royce as protesters — some of whom were subsequently jailed — shouted “Tory scum,” a reference to the Conservative Party’s traditional links with the aristocracy, and “off with their heads!” In March, a reported 500,000 people marched against the cuts, with some protesters occupying the exclusive food store Fortnum & Mason — Prince Charles’s grocer. ...... one man shouted, “This is our battle!” When asked what he meant, the man, Paul Rook, 47, explained that he felt the rioters were taking on “the ruling class.” ....... As the budget cuts take hold, risk of unemployment increases and social measures like youth projects are sacrificed, Mr. Beech said, and “all logic says there will be an increase in antisocial behavior.” “Boredom, alienation and isolation are going to be factors”

Wednesday, April 27, 2011

I Am Going To Act Like This Is 2007

Image via WikipediaI am not going to act like my guy is in the White House. I am going to act like he is a fresh faced candidate, and this is 2007 all over again. I think that is the best angle to come from to help with his re-election.

Obama 2012 Is On

My political enemies deprived me of my well deserved victory parties in June 2008 and November 2008, and Inauguration 2009 pretty much passed me by. What I am really angry about is they deprived me of the Iran action of 2009. That street action was custom made for me.

2009 and 2010 were years I should have been by Barack's side, virtually speaking, but I was not. I was too engrossed picking up the pieces from the hit I took in 2008. I'd have liked to stay involved. For me it is about power. It is not about elections. There is joy in governing.

You could argue Barack's first two years belonged to Bush. And so I should not complain too much. He spent two full years cleaning up the house.

His re-election is pretty much reassured. It is going to happen. No sweat. But I am not taking any chances. I am going to act like this is 2007.

He does not really need me for the re-election, although I will be there. It is going to be fun. This time I'd like to be there for the

Image via Wikipediavictory parties. This time I'd like to make it to the inauguration.

But what I'm really interested in is his quest for greatness. You get two years to clean up house, and you get six years to achieve greatness. I'd like to be there for him, virtually speaking.

He already did the FDR thing. He wrestled the Great Recession. 2011 is a godsend to him. When April 2006 finally happened in Nepal, it was bigger and better than anything I had imagined during the months before. 2011 is bigger and better than anything I have imagined in the years before.

A Rwanda Was Prevented
To Zimbabwe Through Ivory Coast

The best kind of greatness comes from liberating people. Libya is Barack Obama's civil war. It took a civil war to catapult Abraham Lincoln to greatness. Barack Obama can help turn 2011 into the biggest year for democracy in world history. He does that and he is competing with old man Abe himself.

Then he gets to focus on tackling America's deficit and debt. Minus that China gets to become the number one economy in the world in 2016, there is speculation. The only way America can compete with China is by doing total campaign finance reform. American democracy as it stands has all sorts of misguided incentive points.

The US Military Budget Needs To Come Down To 100 Billion From 600
Drugs And Guns
Obama On The Deficit

Sunday, May 23, 2010

Reshma Saujani, Haiti Earthquake, Harvard Yale, And 2016

Voter Insurrection Turns Mainstream, Creating New Rules New York Times .... after this week’s primaries in Arkansas, Kentucky and Pennsylvania, 2010 seems destined to be one of those years...... an anti-incumbent tsunami is roaring ..... The old laws of politics have been losing their relevance as attitudes and technology evolve, creating a kind of endemic instability that probably is not going away just because housing prices rebound. ...... Voter insurrection has gone as mainstream as Miley Cyrus .... The first is that this age-old idea of “clearing the field” for a preferred candidate, so as to avoid divisive primaries, is now, much like the old party clubhouse, a historical relic. This should have been clear to everyone after 2008, when Barack Obama, shunned by most of his party’s major contributors and its Washington establishment, simply shrugged off endorsements and raised more than half a billion dollars from his own constituencies. ...... makes you wonder whether Mr. Obama and his aides really thought they could “clear the field” for Mr. Specter ........ A new generation of politicians has been raised with more consumer choice and less loyalty to institutions, and they are no more likely to take their orders from, say, party leaders like Senator Mitch McConnell, Republican of Kentucky, than they are to drive a Malibu just because some car magazine tells them to. Nor, thanks to the Web, are they reliant any longer on the party structure to raise the necessary cash. ....... less affinity for parties makes incumbent politicians less safe, generally. That’s because when fewer people bother to engage in party politics, it takes a smaller group of ultra-motivated activists to overturn the traditional order of things. ...... the politics of issues, the stuff of which parties have most often crafted their core identities, has now been largely displaced by a politics of personal conviction. ....... we are living in the era of the upstart...... The intraparty rebellions now will be increasingly local, sufficiently financed and built around credible candidates — the kind of campaigns that made Barack Obama president and that may yet give us Senator Paul or Senator Sestak. My gosh, these people in Washington are in for it now.

Image of Reshma Saujani

If you were to read some of the news articles on Reshma Saujani, you would want to blame her for nothing less than the Great Recession. Most of the articles are objective, neutral, some are glowingly positive, but some are negative. And oh yes, you are going to learn she went to Harvard and Yale and how that is a bad thing.

If you are going to blame Reshma Saujani for the Great Recession, I am going to blame you for the earthquake in Haiti. And the thing about Harvard and Yale is she has an amazing personal story from when her parents were sent out of Uganda by Idi Amin. Reshma Saujani personifies the American dream in her story in this country of immigrants. That is part of what makes her such a compelling candidate. If she can do it, you can do it. She is an inspiration.

Last Saturday I went canvassing for Reshma Saujani in Long Island City - although I have a feeling I might have ended up in Astoria again; I was driven to my neck of the woods - and the Saturday before that I did 100 knocks and 10 talks on behalf of her with my fellow volunteer friend Arnab Majumdar, a Bengali who grew up in the tri-state area. A staffer called me "not a volunteer, but The Volunteer."

A few days back I emailed her saying if it makes you feel good, I want you to know, you are my favorite politician right now. You compete with Obama, a few politicians in Nepal, with John Liu. I love Obama as much as ever; all the guy needed to do for me was win in 2008, all the great work he has done since has been bonus. This blog is named after him. But I follow Reshma Saujani's campaign more than that of the career trajectory of any other politician right now. That favorite tag is measured in the sheer number of hours. A few days back the thought of going to work for Reshma Saujani For Congress full time for three and a half months flashed through my mind.

Just like Barack raised more money than Hillary the first two quarters, Reshma has raised more money than Maloney the first two quarters. Eight months after I had been supporting Barack, he was still 20 points down in the polls in Iowa, and I was firm in my thought that if he lost Iowa, he was history. He won Iowa and the race was still so close for months. I was right about Iowa.

If the election were to be held today, Maloney would win. And that is why Reshma Saujani is on a sprint to September 14.

I have asked the question, what if she lost? Barack Obama lost to Bobby Rush when he ran for Congress in 2000. Bill Clinton went to Arkansas from Yale and ran for Congress. He lost. But I don't see Reshma losing. She is going to hit the national headlines come September.

You are lucky this is a tough race, I emailed her a few days back, great things are going to happen to you at a rapid pace after November. Because this is a tough race in a district where Obama drops by to raise money for his candidates across the country.

When I am thinking Reshma Saujani, I am thinking 2016. Here are a few scenarios that play in my mind.

After November she is going to vault into the national imagination. If her parents showed up with nothing except maybe a few small gold nuggets in toothpaste tubes, she is obviously self made. She is a woman. She was totally sold on the idea of the first woman president in the 2008 race. She is razor sharp. She is a quick study. She works hard, she works like crazy. She is a political animal. Either you have those instincts, or you don't. She has plenty. She is sufficiently aggressive.

Obama achieved JFK status as a candidate. He became FDR after health care reform got passed. I am confident he will see the passing of financial sector reform, even immigration reform. But all those big tasks are FDR level work. If the guy wants to compete with Lincoln in the greatness department, he is going to have to tackle the global trafficking of women. Will he go for it? I don't know. Not now.

2016 is going to be a gendered election. There is a lot of pent up emotion from 2008. Joe Biden is a great guy but he is not going to be president. He is going to do the Dick Cheney thing. 2016 is going to be the year for the first woman president. Reshma Saujani has a shot as much anyone out there. Noone else has even remotely compelling a personal story. Reshma also has an Africa story, it is different. She also has a Harvard story. Four years in Congress are going to be enough time. Obama needed only two. Because he realized it was not about him, it was about the country. He could wait, the country and the world could not.

Another thing going on for her is her "getting" tech. She is poised to ride the third wave nationally. The first has been firefighting, Obama doing the stimulus bill to make sure the economy does not go down under. The second wave will be the deficits and debt phase. I suspect this is going to be a major part of the Obama re-election effort. Some time during his second term Obama is going to have balanced the budget. The third wave is going to be about creating the next generation of jobs, companies and industries. That just so happens to be Reshma Saujani's number one strength.

Would you blame me that I want to play Chanakya to Reshma?

And, by the way, Reshma Saujani all along has been a strong advocate for financial sector reform. She is going to jump with joy when Obama signs the bill into law. And I asked around. A lot of people think having gone to Harvard and Yale is a good thing. Obama only went to Harvard. Clinton only went to Yale. Reshma Saujani went to both.

Reshma Saujani Goes on the Attack Against Carolyn Maloney in Upper East Side Congressional Race DNAinfo
Maloney V. Saujani: The Drill-Down New York Daily News (blog)
Newcomer Saujani challenging Maloney Queens Courier
The burdens of fundraising Politico (blog)
Maloney snubs Obama, Pelosi Examiner.com
Parsing Reshma's Words New York Observer
In New York, Wall Street Is on the Primary Ballot BusinessWeek
A Primary Challenger in Carolyn's Court New York Observer
Wake Up Call » New York Daily News (blog)
Desi Congressional Challenger Lines Up Backers Forbes
Congressional Candidates Share Their Perfect Upper East Side Afternoon DNAinfo
Pressuring Sestak, Raising the Cap and More in Capital Eye Opener: May 14 Center for Responsive Politics
Six 'desis' in race for the US Congress Express Buzz
Asian-American Heritage: Queens District Leader Maintains Political Prowess NY1
Fresh-Faced Reshma and the Assault on Fortress Maloney New York Observer
Square Brings Credit Card Swiping to the Mobile Masses, Starting Today Fast Company
Wall Street Runs for Congress Village Voice
NY-14: Oh Please, Reshma Swing State Project
Obama Raises $$ in NYC While Slamming Wall St. FOXNews
Upstarts Aim to Unseat Upper East Side Fixture Wall Street Journal
Republican Candidate for UES Congressional Seat Takes Progressive Approach to Campaign DNAinfo
Maloney Declines To Raise $25k To Host Obama On East Side City Hall

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Monday, August 15, 2011

The Stupid, Stupid Bush Tax Cuts

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Friday, August 12, 2011

The Stimulus Bill Was Messed Up

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Monday, August 08, 2011

A Second Stimulus Bill Needed

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Wednesday, April 27, 2011

I Am Going To Act Like This Is 2007

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Sunday, May 23, 2010

Reshma Saujani, Haiti Earthquake, Harvard Yale, And 2016

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