Monday, August 15, 2011

The Stupid, Stupid Bush Tax Cuts

Warren Buffett speaking to a group of students...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.
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Sunday, August 14, 2011

London Has Become Cairo (2)

DAVOS/SWITZERLAND, 29JAN10 - David Cameron, Le...Image via Wikipedia
Wall Street Journal: Repressing the Internet, Western-Style: As the British police, armed with the latest facial-recognition technology, go through the footage captured by their numerous closed-circuit TV cameras and study chat transcripts and geolocation data, they are likely to identify many of the culprits. ..... Authoritarian states are monitoring these developments closely. .... They hope for at least partial vindication of their own repressive policies. ..... Prime Minister David Cameron said that the government should consider blocking access to social media for people who plot violence or disorder. ...... After the recent massacre in Norway, many European politicians voiced their concern that anonymous anti-immigrant comments on the Web were inciting extremism. They are now debating ways to limit online anonymity. ....... acts of terror briefly deprive us of the ability to think straight. We are also distracted by the universal tendency to imagine technology as a liberating force; it keeps us from noticing that governments already have more power than is healthy. ...... After violent riots in 2009, Chinese officials had no qualms about cutting off the Xinjiang region's Internet access for 10 months. ...... In their concern to stop not just mob violence but commercial crimes like piracy and file-sharing, Western politicians have proposed new tools for examining Web traffic and changes in the basic architecture of the Internet to simplify surveillance. ..... Should America and Europe abandon any pretense of even wanting to promote democracy abroad? Or should they try to figure out how to increase the resilience of their political institutions in the face of the Internet?
I have never believed in political violence. I don't today. But I do believe in mass action. I don't believe in rioting. But then I don't see the London riots as simply a law and order problem.

The economic roadmap that the Conservative government in Britain has in place as the solution to the recession is precisely the wrong move to make. This is a time for massive rethink on the part of governments and also massive spending to make up for lost private expenditures. Britain is going the wrong way.

If America were to go down that cut the spending route, the recession would deepen, and there would be riots in America.

What is happening in London is less a failure of the British police to control mobs and more the failure of the Conservative government. It is primarily a policy level failure.

There is a need for a massive rethink of the nation state also in long established democracies. Instead of protesting Wikileaks (Learning The Wrong Lessons From Wikileaks) government departments and agencies should be embracing social media like tech startups.

The Internet And The Emperors

There should be talk of one gigabit per second kind of internet access for all and the resultant universal lifelong education. The goal should be universal health care. The goal ought be a Global Marshall Plan.

When it is time to think big, Cameron has thought small. And he has problems on his hands. Tea Party, take note.

London Riots: Debate
The Stimulus Bill Was Messed Up
Three Million Jobs
Global New Deal Needed
London Has Become Cairo
A Second Stimulus Bill Needed
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Friday, August 12, 2011

The Stimulus Bill Was Messed Up

Mussolini (left) and Hitler sent their armies ...Image via Wikipedia
  1. It was too small. It should have been at least a trillion. (Stimulus: Make It A Trillion, Stimulus: Size Matters)
  2. 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. 
  3. 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)
  4. 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. 
  5. 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. 
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Thursday, August 11, 2011

Three Million Jobs

Suffrage universel dédié à Ledru-Rollin, paint...Image via WikipediaSend one million mentors into all the low performing schools across the country. Pay them.

Send one million people to white wash roofs across America. Pay them.

Get a million people to do the netroots thing on behalf of democracy movements across the globe. Pay them. Send 50,000 netroots activists to go out into the world to help those democracy movements from nearby countries.

My point being what America needs is a massive jobs program. And I say start with people who you can pay $10 per hour, $20 per hour.

These are people you should be able to put to work with a week or two of training.

Global New Deal Needed
London Has Become Cairo
A Second Stimulus Bill Needed
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Global New Deal Needed

DAVOS/SWITZERLAND, 25JAN08 - Gordon Brown, Pri...Image via WikipediaI am in agreement with Gordon Brown.
Gordon Brown: Global New Deal: America’s path to growth through higher consumption is blocked by high personal borrowing and negative equity. Another well-trodden road out of recession—a private investment spurt—has failed to materialize as businesses hoard cash in the absence of a growing home market. ........ And now that the debt deal will forestall the other traditional path—a stimulus from public investment—just one route to sustained growth remains that can prevent a decade of high American unemployment. ....... Obama should now refocus his attention on securing a global growth pact that will free the world as a whole, and particularly the West, from years of anemic growth. ....... far bolder: “America’s plan for the world economy”—to achieve for global trade and growth now what Gen. George Marshall’s plan did for the faltering world of the 1940s. ........ a “global New Deal” ....... Today, 60 percent of China’s income comes from exports, while America’s export share is just 25 percent. ..... The need is urgent because as Asia’s middle classes double in the next decade, its consumer market will dwarf all others, accounting for 40 percent of all global consumer spending. Without a bigger footprint in Asia, America will be left behind. ....... if—as predicted—India, China, Brazil, South Africa, Mexico, Turkey, South Korea, Indonesia, and Russia, which today buy just 15 percent of U.S. exports, account for 70 percent of future global growth, then no American company can afford to stay at home. ........ Europe’s only hope of salvation from a decade of high unemployment is to export its way to growth. ....... an up-skilling of America’s middle class and calls for U.S. public and private sectors to frontload investment in education technology and infrastructure. And a global growth pact will require America to agree to common global financial standards that can prevent future financial crises. ......... with each iPad sale, only $4 of profit go to its Asian manufacturers, while $80 go to its American (and British) designers ........ From now until Election Day, the president’s opponents will frame his position as “burdening our children with debt.” Indeed, so adept have those on the right been at playing the politics of fear, on all continents, that even in Australia—a country with virtually no debt—the incumbent Labour government lost its majority when it was faced with a conservative onslaught about deficits. ....... Two thirds of a century ago, after the greatest of depressions and the worst of wars, General Marshall rejected the politics of fear for the economics of hope, and the Marshall Plan pioneered a global program that framed the new world order. It repaid itself many times over, doubling global trade and putting America’s flagging postwar economy on course for its most successful era ever. Now, with the same vision and by accepting that a global new deal is the only way forward, an America reborn can lead again.
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London Has Become Cairo

Barack Obama, President of the United States o...Image via WikipediaPeople in America who seek to cut government spending in ways that will send the world economy hurtling down into a grand recession should look to London now. And you thought only Third World dictators needed to face street power.

This is not the time for austerity measures. This is the time for a Global Marshall Plan.

No black person before Barack Obama ever became President Of The United States. That was racism. Blaming Obama for what Bush did is racism. Blaming Obama for not having brought forth some kind of a leftist utopia is also racism.

When you disagree with Tea Party fiscal insanity and blatant racism, you support the other guy. That other guy is Barack Obama. There are too many liberals in America who neither oppose the Tea Party nor support Barack Obama and simply sit back and complain. These are people who only get energized whey they are completely thrown out of power. These are people addicted to powerlessness.

You have to learn to be in power. The liberal crowd has much to learn.
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