"Will Wall Street Ever Face Justice?"

Phil Angelides, a former state treasurer of California and the chairman of the Financial Crisis Inquiry Commission at the New York Times:

Four years after the disintegration of the financial system, Americans have, rightfully, a gnawing feeling that justice has not been served. Claims of financial fraud against companies like Citigroup and Bank of America have been settled for pennies on the dollar, with no admission of wrongdoing. Executives who ran companies that made, packaged and sold trillions of dollars in toxic mortgages and mortgage-backed securities remain largely unscathed. 

Meager resources have been applied to investigate the financial assault on our country, which wiped away trillions of dollars in household wealth and has resulted in 24 million people jobless or underemployed. The Financial Crisis Inquiry Commission, which Congress created to examine the full scope of the crisis, was given a budget of $9.8 million — roughly one-seventh of the budget of Oliver Stone’s “Wall Street: Money Never Sleeps.” The Senate Permanent Subcommittee on Investigations did its work on the financial crisis with only a dozen or so Congressional staff members. 

False "Centrism" on Tax Rates

James Kwak at Baseline Scenario on the skewed notion of "bi-partisan compromise" and "consensus" over cutting tax rates:

Today’s tax rates were set by George W. Bush in 2001 and are considerably lower than the rates that prevailed under Bill Clinton and, for that matter, during most of the history of the income tax. The tax rates on capital gains and dividends, in particular, are at their lowest levels since before World War II. For those of you who care about global competitiveness, total taxes in the United States are lower than in most other advanced industrialized countries. Given the expected growth in the national debt due to demographic shifts and health care inflation, the obvious thing to do would be to simply return to Clinton-era tax rates.

The need to lower rates is not economic, but political. The simple fact is that given the Republican Party of Grover Norquist, you cannot get a single prominent Republican to sign on to a tax plan that does not cut tax rates. Ergo, if you want to call yourself bipartisan, you have to cut rates. But that doesn’t mean it’s right; that just means that the Republicans have successfully eliminated their negotiating room, forcing would-be centrists to cave in to their demands...

Bowles-Simpson, Domenici-Rivlin, and the Gang of Six would all drastically reduce tax revenue from the levels dictated by current law.

Remember, under current law the Bush tax cuts all expire. These “centrist” plans only “increase” tax revenue by first adopting a baseline in which the Bush tax cuts are made permanent.

The Education of a Centrist

Brad DeLong on two decades of GOP "Crazy":

I went to Washington in 1993 to work for what we called Lloyd Bentsen's Treasury as part of the sane technocratic bipartisan center. And it took me only two months--two months!--to conclude that America's best hope for sane technocratic governance required the elimination of the Republican Party from our political system as rapidly as possible. Dole and Gingrich's "We really don't care that these policies are good for the country--are a lot like policies we would enthusiastically support if proposed by a Republican president--but we are going to try to block them because that will weaken Clinton" wad a real eye-opener. Nothing since has led me to question or change that belief--only to strengthen it. We really need a very different opposition party to the Democrats: a less dishonorable one.

The GOP's "Fiscal Phonies"

Paul Krugman compares the tax proposals of the GOP presidential contenders with President Obama's, projecting debt as a % of GDP under the varying plans:

(C)ompare the Republican plans with the Obama administration’s plan, which would at least allow the high-end tax cuts to expire. How does debt under this plan compare with the four Republicans?

Well, here’s debt as a percentage of GDP in 2021 (using the OMB numbers (pdf) for Obama and CRFB (Committee for a Responsible Federal Budget) for the others):

 

Yep: as Republicans yell about Obama’s deficits and cry that we’re turning into Greece, Greece I tell you, all of them, all of them, propose making the deficit bigger.

And for what? For reverse Robin-Hoodism, taking from the poor and the middle class to lavish huge tax cuts on the rich.

And I believe that all of them know this, too. It’s pure hypocrisy – and it’s all in the service of class warfare waged on behalf of the top 0.1 or 0.01 percent of the income distribution.

The mortgage crisis is holding back economic recovery

Robert Reich at Financial Times:

(T)he biggest continuing problem for most Americans is their homes. Purchases of new homes are down 77 per cent from their 2005 peak. They dropped another 0.9 per cent in January. Home sales overall are still dropping and prices are still falling – despite already being down by a third from their 2006 peak. January’s average sale price was $154,700, down from $162,210 in December. 

Houses are the major assets of the middle class. Most Americans are therefore far poorer than they were six years ago. Almost one out of three homeowners with a mortgage is now “underwater”, owing more to the banks than their homes are worth on the market...the negative wealth effect of home values, combined with declining wages, makes it highly unlikely the US will enjoy a robust recovery any time soon.

 Read the entire piece HERE.

Gas prices and reality - speculation is driving higher prices

With the GOP primary players engaged in demagogy claiming they can bring down the price of gas quickly with more drilling and across-the-board deregulation, this reality check discussion on Chris Hayes Sunday morning show "UP" is an excellent antidote to ill-informed crackpot rants and disingenuous campaign pandering:

Visit msnbc.com for breaking news, world news, and news about the economy

Which political party is best for business and the economy?

Bloomberg reports:

While Republicans promote themselves as the friendliest party for Wall Street, stock investors do better when Democrats occupy the White House. From a dollars- and-cents standpoint, it’s not even close...

(O)ver the five decades since John F. Kennedy was inaugurated, $1,000 invested in a hypothetical fund that tracks the Standard & Poor’s 500 Index (SPX) only when Democrats are in the White House would have been worth $10,920 at the close of trading yesterday. That’s more than nine times the dollar return an investor would have realized from following a similar strategy during Republican administrations.

Willard's Wild Tax Scheme II

Via Progress Report:

Previous Romney Giveaways to the Wealthy

• Abolishes the estate tax — a tax paid only by the wealthiest one-quarter of one percent of Americans.
• Maintains the special low tax rates on investments put in place by President Bush that disproportionately benefit the wealthy and would otherwise expire at the end of this year. Romney himself takes advantage of these special low rates on a considerable portion of his sizable income.
• Maintains special loopholes for hedge fund and private equity managers — loopholes Romney himself takes advantage of.
• Maintains the Bush marginal tax rates for the wealthy which would otherwise expire at the end of this year.

New Romney Giveaway to the Wealthy

• Cuts tax rates on the wealthiest Americans by another 20 percent below Bush tax rates. Under President Obama, the wealthiest Americans will pay a top income tax rate of 39.6 percent in 2013; under Romney, they would pay just 28 percent.

Magic Math

• Jobs: Mitt Romney promises his expansion of the Bush tax cuts will create jobs; however, the Bush tax cuts resulted in the weakest job growth in decades. There’s no reason to think that cutting taxes on the wealthy even more will result in a different outcome.
• Deficits: The Romney campaign promises that his massive new tax cuts “do not expand deficits” because of “stronger economic growth and reductions in spending.” The Heritage Foundation promised the exact same thing about the Bush tax cuts in 2001, even going so far as to claim that the federal debt would be paid off by 2010.

Real Math

• Romney’s proposed tax cut would cost FOUR TIMES MORE than the Bush tax cuts.
• According to the Center for American Progress Action Fund’s Michael Linden, Romney’s plan would shrink tax revenues by an astounding $10.7 TRILLION over the next ten years and reduce taxes as a share of GDP to a paltry 15 percent. The only way to run the U.S. government on that level of revenue is to run massive deficits and undertake program-ending cuts in Social Security, Medicare, Medicaid, and all discretionary programs. Since Romney refuses to make cuts to defense — and indeed has proposed increasing defense spending — the deficits and the cuts would both be all the more massive as a result. All of course done in the name of giving more and larger tax cuts to the wealthiest Americans.

IN ONE SENTENCE: Instead of helping to create an economy that works for everyone, Romney’s tax plan simply quadruples down on a broken economy that is rigged for the benefit of a wealthy few.

Quote for the day - Christina Romer, former economic advisor to the Obama administration

 Romer, interviewed at The Browser:

CEA Chair Romer w/ the President

"The shocks hitting the American economy in 2008 were enormous, in terms of the destruction of wealth and the freezing of our financial system. I firmly believe that the stresses on the US economy in 2008 were much larger than those in 1929 and 1930. So why has this recession, as bad as it has been, not been a second Great Depression or even worse? I think the answer is a much better policy response.

"But this episode has also shown that policy is very hard to get right. The policy response is inherently based on forecasts, which are subject to great uncertainty. And the political process often puts constraints on what can be done. Moreover, the policy response is limited by our understanding of how policy works and our vision of possible options.

"The bottom line is that the Great Recession showed us that we have effective tools to fight a terrible downturn. But we also have much to learn about how to use those tools more successfully."

Kicking Newt Around...(this is so "last month")

"Connecting" with folks in Oklahoma.

Since his apparent devolution back into irrelevance,  we haven't paid much attention to Newt Gingrich lately.  But this, from Talking Points Memo, deserves notice - if only because it's SNL-worthy:

Speaking at a town hall-style event at Oral Roberts University in Tulsa, OK, Newt Gingrich mocked the Obama Administration's promotion of smaller, fuel-efficient vehicles.

"Let me start from a simple premise that Oklahomans will understand: you cannot put a gun rack in a Volt," Gingrich said.

Rick Santorum's Higher Ground

"With what judgment ye judge..."

Apparently Rick Santorum has his sights set higher than the Presidency. From his words one can only infer that he aspires to be our theologian-in-chief, rhetorically excommunicating millions of American Protestants from, in his view, "the world of Christianity."

               Visit msnbc.com for breaking news, world news, and news about the economy         Clip from Up w/ Chris Hayes

Santorum has followed that humble judgement up with the earnest accusation this week against President Obama that he adheres to "some phony theology.  Oh, not a theology based on the Bible, a different theology, but no less a theology."

In this spirit of theological inquiry, our Bible lesson for today comes from the Gospel According to St. Matthew, HERE.

Stubborn facts about the GOP's spending cuts "austerity agenda"

Paul Krugman at NYTs:

Pain Caucus peddling failed ideas from Europe

(I)n early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates...

Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.

George Romney's Prodigal Son II

"Up w/ Chris Hayes" is the best "news-talk" show on television. Far and away. Check out this segment on the stark contrast, both as a businessman and a political figure, between Willard Mitt Romney and his father, former chairman of American Motors and Michigan governor George Romney.

Visit msnbc.com for breaking news, world news, and news about the economy

George Romney's Prodigal Son

An informative article at Motoramic by Justin Hyde on "What Mitt Romney Gets Wrong" re: the auto industry "bailout":

Young Willard with his father in better days.

Republican presidential hopeful Willard Mitt Romney renewed his opposition to the Obama administration's bailout of General Motors and Chrysler today in several Michigan newspapers, contending President Obama's rescue made the companies worse. I wish I could leave politics to the professionals, but Romney's take just doesn't square with the facts as I lived them...

 Let me explain, point by point (Romney's words excerpted in bold quotes):


"Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry."

In fact, the bailout began with President George W. Bush, who was forced to lend GM and Chrysler $17.4 billion in December 2008 after Senate Republicans blocked a rescue plan in Congress. Bush told reporters just last week that he was warned by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson that if he didn't act to shore up GM and Chrysler, up to 1 million jobs could vanish. Knowing what we know now, says Bush, "I'd do it again."

"The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better."


The crux of Romney's argument: If Obama had not acted, private companies would have stepped in and run a "managed bankruptcy." What this ignores is that in the fall of 2008, before Obama was even sworn in, no one on Wall Street or anywhere else was willing to lend GM and Chrysler a penny — let alone the $81 billion they and their financial arms eventually needed.

What's The Matter With Red States? The "Entitlement" Hustle

Paul Krugman at NYTimes describes the almost absurd predicament of much of "red state" America. They're hooked on so-called "entitlements" while the GOP's  "severe conservative" pols are angrily pointing their fingers at some imagined class of moochers who are bleeding the government dry, immersed in a "culture of dependency." 

(What Krugman doesn't mention is that there's often a racial sub-text to the opportunistic political rhetoric, which explains the willful blindness and hypocrisy that drives this version of anti-government white populism within the GOP.)  Krugman:

Rick Santorum declares that President Obama is getting America hooked on “the narcotic of dependency.” Mr. Romney warns that government programs “foster passivity and sloth.” Representative Paul Ryan ... requires that staffers read Ayn Rand’s “Atlas Shrugged,” in which heroic capitalists struggle against the “moochers” trying to steal their totally deserved wealth, a struggle the heroes win by withdrawing their productive effort and giving interminable speeches.

Many readers of The Times were, therefore, surprised to learn, from an excellent article published last weekend, that the regions of America most hooked on Mr. Santorum’s narcotic — the regions in which government programs account for the largest share of personal income — are precisely the regions electing those severe conservatives. Wasn’t Red America supposed to be the land of traditional values, where people don’t eat Thai food and don’t rely on handouts? ...

The GOP's Stampede Toward Lunacy

Garry Wills at NYRB:

By a revolting combination of con men and fanatics, the current primary race has become a demonstration that the Republican party does not deserve serious consideration for public office. Take the controversy over contraceptives. American bishops at first opposed having hospitals and schools connected with them pay employee health costs for contraceptives. But when the President backed off from that requirement, saying insurance companies can pay the costs, the bishops doubled down and said no one should have to pay for anything so evil as contraception. Some Republicans are using the bishops’ stupidity to hurt the supposed “moderate” candidate Mitt Romney, giving a temporary leg up to the faux naïf Rick Santorum; others are attacking Barack Obama as an “enemy of religion.”...


The Phony Religious Freedom Argument

The bishops’ opposition to contraception is not an argument for a “conscience exemption.” It is a way of imposing Catholic requirements on non-Catholics. This is religious dictatorship, not religious freedom.

Who's "entitled"?

Center on Budget and Policy Priorities:

Some conservative critics of federal social programs, including leading presidential candidates, are sounding an alarm that the United States is rapidly becoming an “entitlement society” in which social programs are undermining the work ethic and creating a large class of Americans who prefer to depend on government benefits rather than work.  A new CBPP analysis of budget and Census data, however, shows that more than 90 percent of the benefit dollars that entitlement and other mandatory programs[1] spend go to assist people who are elderly, seriously disabled, or members of working households — not to able-bodied, working-age Americans who choose not to work.  (See Figure 1.)  This figure has changed little in the past few years.

CBPP continues:

In a December 2011 op-ed, former Massachusetts Governor Mitt Romney warned ominously of the dangers that the nation faces from the encroachment of the “Entitlement Society,” predicting that in a few years, “we will have created a society that contains a sizable contingent of long-term jobless, dependent on government benefits for survival.”  “Government dependency,” he wrote, “can only foster passivity and sloth.”[2]  Similarly, former Senator Rick Santorum said that recent expansions in the “reach of government” and the spending behind them are “systematically destroying the work ethic.”[3]

Obama's "War on Religion": Stewart takes on The Crazy

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
The Vagina Ideologues - Sean Hannity's Holy Sausage Fest
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

The Difference...

More on Charles Murray's "Coming Apart: The State of White America, 1960-2010" from the New York Times review by Nicholas Confessore:

A Libation Gap?

One of its overriding themes is that economic insecurity doesn’t have much to do with eroding civic values, so we shouldn’t bother using government to tackle inequality. You will learn about working-class laziness, but you will find little discussion of the decline of trade unions or the rise of a service economy built on part-time work without benefits.

Murray dismisses research by scholars who have found that people in bankruptcy court usually end up there because they lost a job, got divorced or faced catastrophic medical bills, pointing to a contrary study of a single year’s worth of bankruptcy filings in Delaware, home to many of America’s credit card companies but very few of its citizens.

Though a self-described libertarian, Murray is not immune to the rage of the 99 percent. He lashes into bloated C.E.O. pay, but chiefly as a symptom of collapsing codes of behavior and propriety. And he is also skeptical that working-class whites are employed less because they can’t find decent jobs. How can the economy have anything to do with it, he asks, when the decades in question have included periods of rapid economic growth? 

Perhaps because not everyone has shared in that growth. While Murray’s new upper class was taking home an ever greater share of national wealth, incomes for almost everyone else were stagnating. During the decade preceding the 2008 bust, according to the Census Bureau, median family income in the United States dropped from $61,000 a year to $60,500. 

Indeed, in comparison with the early 1960s, American workers today are less likely to have pensions, less likely to be able to support a family on a single income and, until the much-reviled ObamaCare law kicks in, less likely to be able to afford health insurance if their employer doesn’t provide it. 

Working-class whites are different from the cognitive elite in at least one way: They have less money.

Quote of the Day

Paul Krugman, at the New York Times, on the state of contemporary conservatism: "tinfoil hats have become a common, if not mandatory, G.O.P. fashion accessory."  Read the rest HERE.