The Great Green Obama Scandal! Brace yourselves!

GOP's Issa engaged in oversight.

Joe Nocera at the NYTs on the GOP-led investigation into a failed solar panel manufacturer, Solyndra, which originally was given the green light for government loans by the Bush administration. The federally-guaranteed loan materialized after Obama took office, with the new administration's support of green energy innovation:

The company’s recent bankruptcy — which the Republicans are now rabidly “investigating” because Solyndra had the misfortune to receive a $535 million federally guaranteed loan from the Obama administration — was largely brought on by a stunning collapse in the price of solar panels over the past year or so. The company’s innovative solar panels, high-priced to begin with, became increasingly uncompetitive in the marketplace. Solyndra didn’t have enough big commercial customers to create the necessary economies of scale...

The purpose of the hearing — indeed, the point of manufacturing a Solyndra investigation in the first place — is to embarrass the president. That’s how Washington works in the modern age: the party out of power gins up phony scandals aimed at hurting the party in power.

Rick Perry might want to reconsider his threat that if Ben Bernanke shows up in Texas it'll get "pretty ugly"

Brad Plumer at WaPo "Wonkblog":

Turns out Rick Perry’s “Texas Miracle” owes much of its success to... Ben Bernanke. A new research paper from the Dallas Fed finds that Texas has rebounded from recession faster than the rest of the country thanks, in no small part, to actions by the U.S. Federal Reserve. (Yep, the same central bank that Perry occasionally deems “almost treasonous.”)

"Euro Zone Death Trip"

"Don't go down those stairs..."

"B" horror movie with subtitles?  No. It's Paul Krugman painting a bleak economic picture: "Europe’s situation is really, really scary: with countries that account for a third of the euro area’s economy now under speculative attack, the single currency’s very existence is being threatened — and a euro collapse could inflict vast damage on the world." 

For a short overview of the crisis brewing in the Euro Zone, check out his complete column in today's NYTs.

"Be afraid - very afraid."

Nouriel "Dr. Doom" Roubini - one of the few economists who foresaw the '08 disaster brewing - adds his frightening outlook HERE: "In my view there is a high likelihood that there is going to be another global financial crisis. My data suggests that most advanced economies are already entering a recession. We’re not any more in an anaemic recovery, we’re not any more at stall speed. We’re at the beginning of a contraction..."  

If you're prepared for a real scare regarding a second global economic crisis triggered by the deep problems in Europe, read the entire Roubini interview. 

President Obama is fired up and ready to go!

President Obama addresses the Congressional Black Caucus:

“With patient and firm determination, I am going to press on for jobs. I'm going to press on for equality. I'm going to press on for the sake of our children. I'm going to press on for the sake of all those families who are struggling right now...

“I expect all of you to march with me and press on. Take off your bedroom slippers, put on your marching shoes. Shake it off. Stop complaining, stop grumbling, stop crying. We are going to press on. We’ve got work to do..."

Part One


Part Two

Austerity is not the answer...

Former CEA Chair Christina Romer on the notion that austerity, not stimulus, is the solution to current unemployment and economic stagnation:

This argument makes me crazy. There’s simply no evidence that concern about the current deficit is a significant factor limiting consumer spending or business investment. And government borrowing rates are at record lows, suggesting that financial markets are not worried about the deficit, either.

Moreover...the best evidence shows that fiscal austerity depresses growth and raises unemployment in the near term. That’s the experience of countries like Greece, Portugal and Britain, which have embarked on drastic deficit reduction plans over the last two years. Cut the current deficit and you will raise unemployment, not lower it.

Like many other countries, the United States has two terrible problems: a devastating lack of jobs right now and an unsustainable budget deficit over the longer run. The right question is not whether we can reduce unemployment by lowering the deficit (we can’t), but whether we can make progress on both problems.

With 14 million Americans unemployed and no prospect of rapid recovery on the horizon, we really have no choice: we must take additional measures to create jobs. What policy makers need to discuss is which measures will be most effective in putting people back to work, and in hastening the day when government support is no longer needed.

How bad is it?

Here's a chart from "Calculated Risk" that puts the current Great Recession in context of all of the post-WWII recessions the US has faced:

As you can see...it's pretty bad.  Far worse than anything since the Great Depression, as we now well know.  Small comfort, but via Ezra Klein there is this:  Even given the slow, staggering recovery and the prolonged unemployment, compared to big economic meltdowns that have hit comparable industrialized countries in recent decades, "the U.S. labor market has performed better than 4 of the previous Big 5 crises.”

Former President Bill Clinton put the Obama administration's performance managing the crisis in perspective last week:

President Obama on the American Jobs Act at the Ohio-Kentucky Brent Spence Bridge

The President took his case onto John Boehner's and Mitch McConnell's turf:

More on tax fairness...

Paul Krugman:

40 percent of taxpayers with incomes between 30K and 40K pay more than 12.9 percent of their income in income and payroll taxes; meanwhile, 25 percent of people with incomes over $1M pay less than 12.6 percent of their income in these taxes.

This suggests that there are a lot of very-high-income guys paying a lower tax rate than their secretaries.

"Non-Labor Income" - it's even better than it sounds...

Everyone loves the idea of making money without having to do actual work for it. Not that there's anything wrong with that.  Investment helps make the economic world go round.

But the beauty of non-labor income isn't just that you make more money by already having money - rather than by working harder, working smarter, working longer hours or increasing the value of your labor through education, skills, experience and performance. The real beauty of this "non-labor" income  is that you pay lower tax rates on it than on any income generated by actual work.  Lots lower tax rates! This works out especially well the more money you make from your "non-labor."

Source: Tax Policy Center data - chart via Jared Bernstein

And lest we forget, any attempt to shift the tax rates so that "non-labor income" is treated the same way as income gained by actual work is Class Warfare, motivated by envy and resentment.

I don't know about the "warfare", but I'll admit to more than a little envy...no, make that "resentment"...of folks who make money from having money and for their efforts get to pay lower tax rates, on average, than the rest of us poor suckers. Frankly, it feels a bit like "class warfare" coming from their direction.

More Elizabeth Warren...and why her candidacy is important for American politics

Senatorial candidate Warren takes on the deficits, taxation and "class warfare":




Greg Sargent of WaPo "Plum Line" comments on Warren's political skills and message:

Elizabeth Warren on Morning Joe

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What a terrific candidate!  Did you notice how deftly she handled the ridiculous Mark "The President's a Dick" Halperin's lame attempt at a "gotcha"? (What's that jerk doing on my TeeVee?)
HERE's her website, if you want to contribute or volunteer.

David Brooks laments Obama's "mean and intransigent" attacks on the super-rich and feels "used"

The fragile Mr. Brooks at NYTs:

The White House has clearly decided that in a town of intransigent Republicans and mean ideologues, it has to be mean and intransigent too...

(B)y God Obama’s going to raise taxes on rich people who give to charity! We’ve got to do something to reduce the awful philanthropy surplus plaguing this country!

The president believes the press corps imposes a false equivalency on American politics. We assign equal blame to both parties for the dysfunctional politics when in reality the Republicans are more rigid and extreme. There’s a lot of truth to that, but at least Republicans respect Americans enough to tell us what they really think. The White House gives moderates little morsels of hope, and then rips them from our mouths. To be an Obama admirer is to toggle from being uplifted to feeling used. 

Tim Noah comments on Brooks' pain at TNR:

Three quarters of Americans support higher taxes in most recent poll

Conservative economics commentator and former Reagan Treasury official, Bruce Bartlett, has it:

I have previously posted a table showing that people support raising taxes as part of deficit reduction by a 2-to-1 margin over the Grover Norquist/Club for Growth/Tea Party position that the deficit must be reduced only by spending cuts without a penny of higher taxes. 

In light of President Obama's new budget plan, which includes higher taxes, I am posting an updated table, including a poll on Friday showing that three-fourths of people support higher taxes and only 21 percent support the doctrinaire right-wing position.

Can/Should the Budget Deficit Be Reduced with Spending Cuts Alone or Should There Be Some Increase in Taxes?
Poll	Date	Some/All Taxes	No Taxes/ All Spending
New York Times/CBS News	9-16-11	74	21
Bloomberg	9-14-11	48	38
Associated Press	8-26-11	69	29
Gallup	8-10-11	66	33
CNN	8-10-11	63	36
McClatchy/Marist	8-9-11	68	29
New York Times/CBS News	8-4-11	63	34
CNN	8-2-11	60	40
Ipsos/Reuters	7-26-11	68	19
Rasmussen	7-25-11	56	34
CNN	7-21-11	64	34
Washington Post/ABC News	7-19-11	66	32
NBC News/Wall Street Journal	7-19-11	62	27
CBS News	7-18-11	69	28
Quinnipiac	7-14-11	67	25
Gallup	7-13-11	73	20
Washington Post/ABC News	6-9-11	61	37
Ipsos/Reuters	6-9-11	59	26
Bloomberg	5-13-11	64	33
Ipsos/Reuters	5-12-11	61	27
Gallup	4-29-11	76	20
USC/Los Angeles Times	4-25-11	62	33
New York Times/CBS News	4-22-11	66	19
Washington Post/ABC News	4-20-11	62	36
Washington Post/ABC News	3-15-11	67	31
Washington Post/ABC News	12-12-10	62	36
Associated Press/CNBC	11-26-10	65	33
Average		64.5	30

Tax rates & job growth, aka "Class Warfare" deconstructed

The GOP rejoinder to President Obama's jobs and budget plans is, in short, a reversion to their mantra of tax cuts "uber alles."  They're engaged in hysterics about "Class Warfare!"  Their plan?   Lower taxes create jobs! 

Really?

Center for American Progress' Director of Tax and Budget Policy Michael Linden:

(I)f you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.

President Obama unveils his long-term budget strategy

The complete speech

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Getting a handle on the scandal

While the White House is taking heat for the failure of one of solar panel company, originally green-flagged for assistance by the Bush administration and constituting 1.3% of the Department of Energy's green-energy investment guarantee portfolio, Governor Rick "Good-Hair" Perry of Texas has shown leadership in forging a path for true believers in Free Enterprise to encourage the development of emerging technologies in the Lone Star state.  Via the conservative Frum Forum:

As Governor, Rick Perry presides over a fund that has doled out over $200m in grants to private firms. While Obama is in trouble because his aides might have begged the Energy Department accelerate lending to one promising solar panel maker, Perry is laughing his boots off.

The Texas Emerging Technology Fund (ETF) is practically Perry’s own, personal multi-million dollar fundraising machine. When it comes to doling out money to private firms he doesn’t have to beg anyone for anything.

The fund, signed into law largely by and for Perry in 2005, is controlled by his office and operates largely in secret. Many states have similar investment programs, but the concentration of power in the Governor’s office under Perry’s program is unique.

Bernanke, inflation...and the GOP Crazies!

Federal Reserve Chairman Ben Bernanke - a Bush appointee held over by President Obama - has been attacked relentlessly by every Republican presidential aspirant.  Most notable was Rick Perry's calling Bernanke's monetary expansions "treasonous"  for supposedly doing damage to the dollar and for acting politically rather than prudently.  Perry - demonstrating his usual grace and sophistication - talked about "getting ugly" with Bernanke if he set foot in Texas.

Mitt Romney attacked Bernanke for "over-inflating the amount of currency he's created" and Newt Gingrich, in their primary debates, asserted that Bernanke is "the most inflationary, dangerous and power-centered Fed Chairman in history."  The entire GOP field wants Bernanke sacked.

The brief against Bernanke by Governor Good-Hair  and the rest is that the Fed Chairman is stoking inflation by printing money, presumably to help "Obama" get some dollars flowing into the economy to secure re-election.  More sober voices among professional economists who service the right-wing - but are as evidence-challenged in the real world as the GOP pols - simply decry the threat of inflation "inherent" in Bernanke's monetary expansions.

The truth, of course, is that Bernanke's monetary policies are nothing if not prudent.  (Milton Friedman, conservative economics icon, argued that the biggest problem during the Great Depression was tight money. Bernanke's philosophy and policies as Fed Chair are influenced directly by his reading of Friedman.)

Just by the numbers, inflation is a phantom fear in the current economy. The chart below. from David Leonhardt at the New York Times, shows where Fed Chairmen rank in terms of the inflation during their tenure. Bernanke has been overseeing the lowest inflation in 40 years.  The GOP Presidential aspirants are, true to form, making crazy stuff up...

Swiss banking giant UBS loses a bunch of money

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In the wake of the UBS "rogue trading" loss, Barry Ritholtz argues the problem isn't "rogue traders," but "rogue banks" that are carelessly managed while operating inside the magic circle of "too big to fail":

Our hero hits the campaign trail

Elizabeth Warren, the brain behind the new consumer protection bureau, is running for Ted Kennedy's old Massachusetts Senate seat, in an effort to oust Republican Scott Brown who was elected on the strength of Tea Party support at the height of the right- wing anti-"Obama health care" hysterics.

Jill Lawrence at The Atlantic reports on Warren's first round of outreach to voters:

Warren is by far the biggest name in the Democratic primary and is already pulling in national money from Democrats determined to oust Brown. By midday Thursday, she was the "busiest recipient" at the ActBlue.com fundraising clearinghouse, with more than $310,000 in contributions. EMILY's List sent out a fundraising email on her behalf headlined "It's on in Massachusetts," asking members to "stop Scott Brown and the Tea Party in their tracks."

The GOP is selling "crazy" on climate change

NYTs columnist Thomas Friedman - who IMHO misses the mark more often than not - hits it dead on in discussing climate change and "the crazy" being sold by the GOP's presidential hopefuls, as well as the best path to sustainable green energy and green jobs:

Every time I listen to Gov. Rick Perry of Texas and Rep. Michele Bachmann of Minnesota talk about how climate change is some fraud perpetrated by scientists trying to gin up money for research, I’m always reminded of one of my favorite movie lines that Jack Nicholson delivers to his needy neighbor who knocks on his door in the film “As Good As It Gets.” “Where do they teach you to talk like this?” asks Nicholson. “Sell crazy someplace else. We’re all stocked up here.”

Thanks Mr. Perry and Mrs. Bachmann, but we really are all stocked up on crazy right now. I mean, here is the Texas governor rejecting the science of climate change while his own state is on fire — after the worst droughts on record have propelled wildfires to devour an area the size of Connecticut. As a statement by the Texas Forest Service said last week: “No one on the face of this earth has ever fought fires in these extreme conditions.”