June Unemployment Unchanged At 7.6%, 47% Of Jobs Added Year Over Year Low-Paying

Hm. There's that 47% again. I thought the answer to everything was 42.

June unemployment is unchanged at 7.6%, and the average addition to payrolls is now up to 182,000 per month year over year, or 2.18 million.

The biggest job gains have been in professional and business services with 579,000 job gains year over year, with low-paying administrative and support jobs comprising a net 316,100 of that year over year.

Leisure and hospitality jobs are up 505,000 year over year, with low-paying waiting tables and bartending jobs up a net 392,600 of that year over year.

Education and health services jobs are up 360,000 yoy, with 343,600 coming from the health care and social assistance category.

Low-paying retail trade jobs are up 307,500 yoy.

Construction jobs are up 183,000 yoy, while manufacturing is essentially flat with gains of just 33,000 yoy.

Finance, insurance and real estate jobs are up 114,000 yoy.

Hourly earnings are up 2.2% in the last year, so you now average $828 a week instead of $808.

So, arguably, at the very minimum in the last year 1.02 million of the 2.18 million jobs added are low-paying jobs, or 47% of them. Way to go, Brownie!

Full pdf here.

Obama Is Eliminating The Middle Class, But Do You Know Why?

Based on how thorough-going are Obama's attacks on the middle class, I'd say it's all intentional, something the professor would not dare say if he wants to keep his career, so I'll say it for him since I don't have a career to save.

Summarized from an op-ed by Peter Morici, University of Maryland, here:

His immigration policy swells the ranks of visa-holders in skill-short areas like engineering as well as the ranks of semi-skilled immigrant workers, frustrating the middle-class aspirations of the working poor born in this country.

His massive expansion of student loans permits universities to jack up tuition . . . Students are graduating encumbered by massive debt and too few marketable skills. Broke and unemployed, they are not marrying and starting families—that shrinks the middle class. 

Despite the availability of loans, skyrocketing tuition mandates ever greater family contributions to finance college. This puts higher education further out of reach for many working class families, and fewer low income children are pursuing post-secondary education than in the past—that shrinks the middle class too.

The President has jacked up taxes on families earning more than $250,000. Unfortunately, most businesses in America are either proprietorships or pass through corporations that pay those higher individual, as opposed to corporate, tax rates, raising the cost of investing and expanding businesses—that spells fewer jobs for the middle class and those that aspire to its ranks.

Unable to push through Congress limits on CO2 emissions, President Obama has used executive orders and the EPA to impose limits by fiat. Unfortunately, those raise manufacturing costs, China has no such limits, and all this encourages business to outsource in China—again fewer jobs for the middle class and aspiring middle class.

Free trade agreements that permit trading partners to undervalue their currencies, subsidize exports and artificially under price their products on U.S. store shelves, health care mandates that raise the price of insuring employees instead of controlling costs, unnecessarily cumbersome regulations to run factories, mindless limits on developing U.S. oil reserves, and exporting abundant natural gas to countries that shut out U.S. products with high tariffs all encourage outsourcing, not just in manufacturing but for many supporting services too—yet again, fewer jobs for middle class Americans.

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“The lower middle-class,” in Marx’s words, “has no special class interests. Its liberation does not entail a break with the system of private property. Being unfitted for an independent part in the class struggle, it considers every decisive class struggle a blow at the community. The conditions of his own personal freedom, which do not entail a departure from the system of private property, are, in the eyes of the member of the lower middle-class, those under which the whole of society can be saved.”

And this is the very reason why the lower middle-class masses are the most dangerous enemies of the dictatorship of the proletariat. They represent a very strong section of society. Their special interests are absolutely incompatible with the economic disturbances which are the inevitable accompaniment of transitional periods.

The disturbance of credit cuts the ground from under their feet. They begin shouting for order, for the strengthening of credit, in such a way that every concession to them leads in effect to a complete restoration of the old order. ...

[Marx] wished to separate the Labour movement from all lower middle class elements, because the lower middle class attitude — attachment to the idea of private property, more or less open striving to uphold credit, terror of every fundamental social disturbance — is in practice the greatest internal enemy of the proletariat and the proletarian revolution.

-- Bela Kun, Pravda, May 4, 1918 (Marxists Internet Archive, here)

TNR Blames And Credits JK Galbraith For Contemporary Financier Fascism

It would be nice if liberals could make up their mind.

The New Republic's Tim Noah here traces TARP, Dodd-Frank and ultimately the general state of regulatory capture (Stigler) of the government by the banks to John Kenneth Galbraith's vision in his 1967 The New Industrial State:

Galbraith (who died in 2006) argued that big U.S. corporations had become immune to competition. Any effort to break them up into smaller companies would neither succeed nor—given the complex challenges of a modern economy—be especially desirable. Better to keep them in harness through a partnership with government. “Planning,” Galbraith wrote (in a sentence you could probably get arrested for writing today), “must replace the market.”

Galbraith was writing about manufacturing giants like General Motors and U.S. Steel. These seemed indestructible at the time, but of course they would soon prove all too susceptible to competition from abroad. Still, Galbraith’s vision of the regulatory state comes pretty close to describing today’s relationship between the federal government and a different oligopoly: the Big Six megabanks. ...

When the 2008 financial crisis hit, the feds went into Galbraithian planning mode. They bailed out the banks through the Troubled Asset Relief Program (TARP), arranged mergers, and, through the Dodd-Frank bill, required big banks to prepare “living wills” showing how they would dismantle themselves in orderly fashion should the need arise. ...

Conservatives were wrong to oppose the government’s bank rescue . . ..

For conservatives who feel queasy advocating the breakup of private enterprises, MIT’s Johnson offers this consolation: Remember George Stigler. Stigler, a conservative economist who died in 1991, won the Nobel for a theory that basically said Galbraith’s partnership approach didn’t work because of “regulatory capture,” i.e., the various ways corporations tame their minders—for example, by maintaining a revolving door between industry and government. Rather than try to control powerful corporations, Stigler thought government should use antitrust law to break them up and let competition rein them in.

What's wrong with this analysis is that banking is not a private enterprise and hasn't been since 1913. The then new partnership of banking with government in 1913 failed in less than 20 years, requiring Glass-Steagall in 1933, which was reactionary liberalism at work. And what we have just witnessed is an instant replay of that debacle, only in faster motion. The Gramm-Leach-Bliley Act of 1999 overturning Glass-Steagall took only 9 years to blow up. But unlike Glass-Steagall, the grotesque of interventions in the wake of this latest panic has done nothing to demarcate clearly the public vs. the private in banking, and consequently keeps the public, and the country, at risk while insuring advantage to those closest to the printing presses at the Treasury. Money goes to money, as they say out in the sticks.

It's not much solace that liberalism's fingerprints have been and continue to be all over the inception and development of financier fascism in the United States. There don't seem to be any conservatives smart enough to understand the advantage it presents to them, and to the country. Or maybe it's just that they've been captured, too.

The Bush/Obama Depression In Electricity Consumption

Between 1990 and 2000, US electricity consumption per capita grew at a rate of almost 17%.

But since then, between 2000 and 2010, electricity consumption actually FELL at a rate of 2% despite growth in population at a rate of nearly 10%.

By 2010, consumption was still 2.3% below the 2005 peak achieved under George W. Bush.

The trend is probably due mostly to the transfer of manufacturing capacity to China, and to some extent to energy efficiency efforts in the US.

Meanwhile in China, the decade of the 1990s witnessed growth in electricity consumption per capita of 94%, and in the decade to 2010 of 196%. Overall, since 1990 Chinese growth in electricity consumption has outstripped the US growth rate by 33 times.

What Obama and Granholm Have In Common: Forward To State-Capitalism

Shikha Dalmia calls what former Michigan Governor Jennifer Granholm did in front of God and everybody at the Democrat National Convention a "political pole dance", for Reason.com here:

But even more bizarre than Granholm’s convention appearance was that she was invited to make one in the first place. She was arguably the worst governor of her time who, during her eight-year term, took Michigan’s teetering economy into her firm hands and gave it a good, hard push off the cliff.

On her watch, the state's ranking in per capita GDP plummeted to 41st place from 24th. Michigan became the only state to suffer a net out-migration during the past decade, and its credit rating was repeatedly downgraded.

But since unemployment is the topic of the day, how was Granholm’s job-creation record? Worse than Katrina-struck Louisiana’s. Unemployment jumped from 6.8 percent when she was elected to 14.1 percent at its peak in 2009 – although some believe it reached as high as 15.2 percent. 

Granholm has never looked more marvelous, but pace Dalmia, Granholm's appearance wasn't bizarre.

There has been much commentary saying as much, as if Granholm's performance was like some sort of meltdown, something almost crazy and beyond the realm of understanding, not unlike Howard Dean's a few years ago.

But from the point of view of ideology her selection and presentation made perfect sense. Like the true believer of a religion, Granholm's emotional display was characteristic but superfluous. It was the content of her remarks which were significant because they were entirely in keeping with the blindness of the ideological mindset of the new old liberalism which calls failure success. Indeed, today's liberalism thrives on failure in order to succeed, and the more failure it has the more success it has. The rightness and success of the bailout of GM, the substance of Granholm's paean to Obama, isn't a bug of this new old ideology, it's a feature. Obama himself has said so. And he's now on a mission to spread the government control of business around, not just the wealth:

“I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.

Therefore consider Jennifer Granholm as the prophet of the new religion, and indeed its forerunner.

Like Michigan's devastated GDP under Granholm, America under Obama has settled into dramatically lower GDP compared to the post-war average. It has descended to almost European proportions, which evidently was the whole point of Obama's 2009 European apology tour. It was as if he were announcing that under his leadership America was going to stop being the leader of the free world and become just like them, anemic and dependent social welfare states. At 1.7 percent currently, GDP in America has indeed been cut down to size, to less than half of the decades-long average of 3.5 percent. Meanwhile nearly one in six Americans are classified as poor, and almost half of all households receive some form of direct government assistance. Is it any wonder Europe wants Obama reelected?

Like Michigan's exodus not just of population but of businesses fleeing the dreaded "single business tax" under Granholm, the nation's only value-added tax, for the first time in living memory there has been a sudden appearance of wealthy "global" Americans actually renouncing citizenship to escape the growing worldwide reach of the Internal Revenue Service's Gestapo-like intimidation of foreign financial institutions, which no longer want the trouble of doing business with Americans. Talk of finding and going to a "back-up country" among the smart set is an alarming sign that the kind of people we need to attract the most in order to grow our economy are instead repelled by the political class' increasing repression of capital and its hatred of the rich.

Like Michigan's downgraded credit rating, America under Obama lost its gold-standard AAA rating, formerly probably the single most recognizable synonym for the country's reputation in the world as the one most likely to pay its bills.

And like Michigan's long period of unemployment under Granholm, America's 43 consecutive months of unemployment at 8.1 percent or higher under Obama speak for themselves.

One might even say that Jennifer Granholm in her eerie way prepared the way for the coming of the (slum) lord. It's only fitting that she should announce his second coming. 

All of this failure is success because it keeps Democrats in power. That's why Gov. Jennifer Granholm's appearance wasn't bizarre. Her governorship epitomized the failure of America under Obama.

And so the ideologues do rejoice, because it's all intended. Forward, to state-capitalism.

Election 2012: It's The Yeomanry Vs. The Clerisy

Joel Kotkin's formulation of the class war, here, between

"people engaged in farming, fishing, forestry, transportation, manufacturing and construction"

and

"an ever-expanding class of minders — lawyers, teachers, university professors, the media and, most particularly, the relatively well paid legions of public sector workers — who inhabit Washington, academia, large non-profits and government centers across the country."

Obama's Enthusiasm For Bailouts Becomes National Socialism in Colorado Remarks

Obama views the GM auto bailout as an example of a successful government investment in the private sector, never mentioning, of course, that the success is at the expense of the former private investors in GM, its non-union elements, and of the tax-paying public. Without those, GM is still a failure, and should be again.

That Obama now says in Colorado that he wants to similarly rescue more companies, however, indicates that the bailout model was more to him than a one-off which he fortuitously inherited from the Republican establishment, an intellectually lazy cohort of Baby Boomers which long ago had betrayed free market principles. Obama's commitment to a model of government superintendence of private industry marks a new public face for an old familiar mixture of State and industry, the inspiration for which Herbert Hoover noted in his memoirs FDR had derived from Mussolini and the other strong men of Europe.

We all know what is the result of this type of thinking because we've already experienced it, not just in FDR's long failure, and not just in the recent auto company bailouts, but also in the rescue of the financial industry:

• more moral hazard which has allowed so-called private banking players like the five or ten biggest banks to take even more unwarranted risks and grow ever larger and more too big to fail than ever, knowing the public purse is backing them up;
• taxpayer-funded bailouts whose pain is never really felt by the taxpayers because, like most public spending, the bailouts are simply financed by more borrowing, which in their turn have only worsened the fiscal health of the nation and contributed to the loss of its once vaunted AAA rating;
• corruption of elected public officials and bureaucrats whose crimes destroy the public's consent to be governed, as witnessed by the rise of protest movements like the Tea Party and Occupy Wall Street, and by the capital strike by individual investors;
• picking winners like multinational GE and Wall Street firms who reaped huge rewards in the form of tax breaks and bonuses because of their close relationship with government, and therefore by definition also picking losers on Main Street like small banks and entrepreneurs who can't beat the system because it is rigged against them, crushing confidence in "capitalism";
• a complete repudiation of free market principles in which failure and bankruptcy become as unacceptable as saying "No" to the kids or as marking an "F" on a report card, unless for unrelated political reasons your industry happens to become a target for elimination, you know, like Chick-Fil-A, or the Roman Catholic Church in America.

Perhaps the most interesting thing about Obama's remarks in Colorado is the way he is now touting his commitment to this model in explicitly nationalistic terms, emphasizing his as a patriotic concern for the American people to bring their jobs home, and Romney's as an unpatriotic intent to export those jobs.

Obama's socialism has been deemed a distraction by establishment Republicans, who find all the purported links between Obama and the communist left made by conservatives just a little too disturbing for polite conversation. It reminds them too much of the McCarthy era. But now explicitly linked to nationalism, Obama's remarks become an opportunity to refocus the conversation on the coincidence of these elements in fascism, which the left has hitherto succeeded in attacking and marginalizing as a phenomenon of the right, of conservatism.

Locating Obama in fascism actually makes better sense of his presidency to date. It explains the disillusionment of the left with him as a sell-out who has had the temerity to spend so much of his time enjoying himself instead of pushing their agenda, crafting policy to maximize campaign contributions from favored industries, and throwing his weight around as Commander In Chief. After one year progressives were already ridiculing his administration as a squandered presidency. And fascism also coheres with the interpretation of his experience in Chicago where he allied himself with financial, insurance and real estate interests and the Democrat Party to take over the property of the South Loop,  enrich themselves, and further their political careers. The president's friendship with Jeffrey Immelt is not a bug. It's a feature. 

The historical reality is that the fight between the communists and the fascists was always a fight on the common ground of socialism, rather like the fight between Democrats and Republicans has been a fight on the common ground of liberalism. The radicalization which occurred in the arguments between socialists culminating in the Second World War occurred because the conservatism of a prior monarchical age had completely lost its tempering force in society. The civilization of Europe was completely overcome from within by a capitulation to eschaton-immanentizing ideologies before it destroyed itself from without in war. In that process, liberalism was the vanguard softening up the enemy for the totalitarianism to come. Conservatism was beside the point then, but not here, not now.

In the arguments between Democrats and Republicans in our time, matters have not yet degenerated into such violence because the unique contributions of conservatism from the American Founding still inform much of the body politic. And the most important of those contributions, derived from human and religious experience both, has been the self-limiting conviction that human nature is not perfectible and always remains a mixture of good and evil which no rearrangement of human affairs can alter.  In the person of Barack Obama, however, we have met with someone who explicitly asserts otherwise, as an ideologue, that the union is perfectible. He deliberately goes out of his way to attack those individuals and institutions who know, believe and say otherwise. And armed with the imperial accoutrements gathered by his predecessors in the presidency, one might say that the people actually face for the first time a real and foreign threat in charge of the executive, a foreigner in his heart, mind, and affections who keeps his past sealed precisely because the revelation that he once presented himself as a foreigner for his own advantage even though he was born in Hawaii would offend more than actually being a foreigner.

Liberalism is defenseless against this because it drinks from the same cup of idealism. This is why it keeps quiet and doesn't look too deeply into President Obama. It is afraid it might see its own reflection. And this is also why a liberal like Mitt Romney can't bring himself to entertain Obama's socialism, let alone his national socialism. If it worked, he'd actually agree with it.

ABC News has the most recent formulations of Obama's national socialist vision here:

"When the American auto industry was on the brink of collapse, more than 1 million jobs at stake, Gov. Romney said, let’s ‘let Detroit go bankrupt.’ I said I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back and GM is number one again. So now, I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry. I don’t want those jobs taking root in places like China. I want them taking root in places like Pueblo.  Gov. Romney brags about his private sector experience, but it was mostly investing in companies, some of which were called “pioneers” of outsourcing.  I don’t want to be a pioneer of outsourcing.  I want to in-source.  I want to stop giving tax breaks to companies that are shipping jobs overseas.” ...

"When the American auto industry was on the brink of collapse, 1 million jobs at stake, Mr. Romney said, ‘Let Detroit go bankrupt.’  I said, let’s bet on America’s workers.  And we got management and workers to come together, making better cars than ever. And now, GM is number one again and the American auto industry has come roaring back.   So now, I want to say what we did with the auto industry, we can do it in manufacturing across America.  Let’s make sure advanced, high-tech manufacturing jobs take root here, not in China.  Let’s have them here in Colorado.  And that means supporting investment here.”

Obama To Expand American-Style Fascism Into All Corners Of The Economy

The partnership between government and business gets ever closer under Obama, whose socialism still routinely lacks the qualifier "National" in the popular press, as Tim Carney reports here:

Obama plans to use the Export-Import Bank -- a federal agency that gives taxpayer-backed loans and loan guarantees to foreign buyers who buy American goods -- to subsidize U.S. manufacturers even when they are selling to other American companies.

This would be a significant step in the federal government's transformation into a venture capital firm and investment bank involved in all corners of the economy. It's private profit and public risk. Conservative Sen. Jim DeMint calls it "venture socialism." ...

Big Business loves all these forays into venture socialism. The Chamber of Commerce lapped up the Troubled Asset Relief Program, the Detroit bailout, the stimulus, the infrastructure bank and Build America Bonds. The chamber also was the key lobbying force to win over Republicans during Ex-Im's reauthorization earlier this year.

Banks, of course, enjoy the opportunity to reap profits while taxpayers bear the risk.

This broad support from the manufacturing and finance sectors makes government underwriting very popular in Washington. Politicians get to steer the flow of money to the sectors they like while making their lobbyist friends and campaign donors happy.

TARP Will Cost Taxpayers $60 Billion, Says Special Inspector General

Here:

"After 3 1⁄2 years, the Troubled Asset Relief Program (“TARP”) continues to be an active and significant part of the Government’s response to the financial crisis. It is a widely held misconception that TARP will make a profit. The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost). But the analysis should not be focused alone on money in and money out. TARP’s costs and legacies involve far more than just dollars and cents. Using a microscope to narrowly focus on the profit or loss of TARP risks losing sight of the bigger picture of whether TARP has been successful in meeting its goals and whether lessons learned from the financial crisis have been adequately implemented so that Treasury, banking regulators, and Congress do not find themselves in the position of rushing out another massive bailout of the financial industry, i.e., TARP 2.0.

"While TARP and other Government responses to the financial crisis may have prevented the immediate collapse of our financial and auto manufacturing industries, and improved stability since 2008, the tradeoff is not without profound long-term consequences. A significant legacy of TARP is increased moral hazard and potentially disastrous consequences associated with institutions deemed “too big to fail.” TARP’s legacy also includes the impact on consumers and homeowners from the large banks’ failure to lend TARP funds. TARP continues to be subject to criticism that TARP helped large banks but not homeowners. In addition, after 3 1⁄2 years, community banks have an uphill battle to exit TARP because they cannot find new capital to replace TARP funds. Finally, TARP’s legacy includes white-collar crime that SIGTARP is uncovering and stopping."

-- Christy L. Romero, Quarterly Report to Congress, April 25, 2012

Brian Wesbury Attacks the VAT Because the Problem is Spending, not Taxation

Brian Wesbury is very skeptical on historical grounds that adding a VAT can do anything to increase revenues relative to GDP:

"[T]here have only been eight years of balanced or surplus budgets in the 61 years since 1950; spending as a share of GDP averaged just 18.1% in those years. In other words, the more the government spends, the harder it is to balance the budget.

"[N]o matter the rate on the income tax, tax receipts are rarely above 19.5% of GDP. The top individual income tax rate has been as high as 90% and as low as 28% in the past 60 years, but revenues have remained in a fairly narrow range. ...

"In 2011, government spending was 24.1% of GDP, and under President Obama’s budget proposal it is never going to fall below 23% of GDP. In other words, there is no tax regime in the history of the United States that has generated enough tax revenue as a share of GDP to balance the budget today, or in the future."

But the problem with this analysis, of course, is that Wesbury is comparing income tax "apples" with value added tax "oranges." The latter have never been on the menu here. They have been elsewhere, as he discusses, but not as stand alone systems. Like Christianity, a VAT isn't a failure. It just hasn't been tried.

While there is every reason to be as skeptical as Wesbury is that a VAT would replace the income tax and wouldn't instead be layered on top of it and contribute to an even more onerous spiral of taxation and spending, Wesbury leaves out of account the moral virtue of a VAT as a tax on consumption and a spur to saving and investment.

Historically conservatism has too rarely taken a stand critical of materialism, especially of the American kind where 70 percent of the economy has depended on consumption. From this perspective, taxing consumption is a much more commendable idea than taxing income, which we say we want to encourage. "If you want less of something, tax it." Is it any surprise that incomes are declining?

Instead what Wesbury is unintentionally demonstrating is that our civilization has reached the limits of the income tax regime instituted in 1913, just as the limitations of the tariff and excise regime for financing mass democracy had been reached at the end of the 19th century.

Perhaps the even more fundamental point is whether mass democracy itself is viable anymore, whether in fact "mass democracy" is not an oxymoron. After all, once the people vote themselves goodies picked from their fellows' pockets, it can't help but implode.

The rich will only put up just so long with this arrangement until they pick up their capital and leave. Indeed, one could argue that precisely that has been occurring for quite some time already. The exodus of manufacturing capacity is the form it has most obviously taken since the opening to China. Less well recognized is the rise of the international citizen who picks up his family and settles in places like Singapore or Macau as the case may be. Greece has imploded under similar circumstances, its richest citizens having long ago made arrangements to avoid the plundering which its tax system means.

Aristotle even longer ago understood the affinities between extreme democracy and tyranny. The rich do what they can, and exile themselves. The rest do what they must.

Manufacturing Payrolls Under 12 Million, Down 30 Percent 2000-2012

Tim Carney Draws Blood and Larry Kudlow Proves it By Losing His Cool

Kudlow didn't like being exposed for a hypocrite, and beat up on the young guy (video here) just to show who's in charge, but the point still stands:

Republicans shill for high finance and free trade at the expense of Main Street and American manufacturing workers. Protestations that government must not pick winners and losers to the contrary, it's high time in this country that American business and American government started picking America to win instead of some libertarian notion of the bottom line, which is poison to our communities.

Tim Carney speaks up against it here, noting how Rick Santorum's populism has rankled Kudlow.

'The US Must Force Open Foreign Markets Or Protect Its Own'

So says Peter Morici of The University of Maryland here:

[G]lobal competition, communications technologies and essentially unchecked immigration have hammered down wages and winnowed opportunities in once decent paying occupations—for example, ordinary line work in manufacturing, middle management and sales, and writing for a daily newspaper.

Sending more Americans to college is not the answer—degrees in the liberal arts are simply not as valuable today as 25 years ago, and many students are not suited to engineering and other technical disciplines. The workforce is well overstocked with business school graduates. The problem is not too few educated Americans but too few good jobs for most of them to do. ...

Heavier taxes on the wealthy to redistribute income won’t help. ...

[T]he United States can’t always dictate the terms of competition and continue to stand idle without more effective responses than bailouts for General Motors, subsidies for Solyndra and Social Security tax holidays, all paid by borrowing from China.

The United States must force open foreign markets or protect its own, or it will perish.

Spoken like a realist about human nature. 

We need more of that.

Phyliss Schlafly Likes Herman Cain's Corporate Tax Reforms

As reported here:

We should reduce or eliminate taxes on businesses that employ Americans producing goods and services inside our own country, while increasing taxes on the profits that corporations earn by outsourcing or manufacturing overseas.

Above all, we should eliminate the foreign tax credit, a self-destructive provision that allows corporations to pay China, Venezuela or Saudi Arabia the money they would otherwise owe the U.S. government. Let's also cut out the deductions that U.S. corporations take for hiring foreigners to do work that Americans can do. ... 

Of Republican presidential candidates, only Herman Cain and Rick Santorum understand that what corporations need is lower taxes on their operations inside the United States rather than on the profits they earn in other countries.

America: Phoenix Rising From the Ashes

From Ambrose Evans-Pritchard, here, not in the least because our own energy supplies and manufacturing are coming back, on top of all this:

The global depression will grind on as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble.

Yet America retains a pack of trump cards, and not just in sixteen of the world’s top twenty universities.

It is almost the only economic power with a fertility rate above 2.0 - and therefore the ability to outgrow debt - in sharp contrast to the demographic decay awaiting Japan, China, Korea, Germany, Italy, and Russia.

Europe's EMU soap opera has shown why it matters that America is a genuine nation, forged by shared language and the ancestral chords of memory over two centuries, with institutions that ultimately work and a real central bank able to back-stop the system.

The 21st Century may be American after all, just like the last.

Ben Bernanke: Clueless on the Consumer Because His Housing Data Are Not Current

From his speech today to the Economic Club of Minnesota:

One striking aspect of the recovery is the unusual weakness in household spending. After contracting very sharply during the recession, consumer spending expanded moderately through 2010, only to decelerate in the first half of 2011. The temporary factors I mentioned earlier--the rise in commodity prices, which has hurt households' purchasing power, and the disruption in manufacturing following the Japanese disaster, which reduced auto availability and hence sales--are partial explanations for this deceleration. But households are struggling with other important headwinds as well, including the persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high for many, notwithstanding that households, in the aggregate, have been saving more and borrowing less. Even taking into account the many financial pressures they face, households seem exceptionally cautious. Indeed, readings on consumer confidence have fallen substantially in recent months as people have become more pessimistic about both economic conditions and their own financial prospects.

Here's the Fed's House Price Index on 8/24/11, which shows prices at late 2004 levels:

The fact is, prices have fallen to 1999 levels and may continue to fall to 1997 levels and perhaps lower than that:

Bernanke doesn't understand the severity of the home equity massacre which the consumer has sustained since 2006. That was the primary source of wealth for the vast majority of Americans, and Bernanke doesn't get that a whole decade of gains has been wiped out. His own data are off by five years.

Everyone hangs on every word of the Fed. "Don't fight the Fed" they say. Too bad the Fed doesn't know what it's talking about.

Manufacturing Jobs Have Tanked to Levels Last Seen in the 1940s

The declines under W and under Obama have been precipitous, after three decades of relative continuity.

The jobs all went to China. I love my fancy stainless steel All-Clad cookware made there. Unfortunately I can't afford the steak I'd like to cook in it.

"And they shall beat their cookware into swords, and their patio furniture into spears, and nation shall lift up the sword against nation, and they shall learn to make warfare evermore."

WhiteHouseDossier.com Says Obama Parties While Cairo Burns

The key point being the American journalism profession a bunch of hacks had nothing better to do than fete the president's political adviser while a real crisis, unlike the kind they usually spend their time manufacturing, was staring them in the face.

When oil hits $200 a barrel will anyone remember the Energy Secretary was there instead of planning how to contain the damage?

Feckless bastards one and all, but especially one Barack Hussein Obama.

Here's the link to the post at the left.

Caroline Baum Says "There Isn't Anything Government Can Do" For Housing

It's right here:

Owners’ equity in household real estate, or the value of assets minus liabilities, fell from a peak of $13.1 trillion in 2005 to a low of $5.9 trillion in the first quarter of 2009, according to the Fed’s Flow of Funds report. That’s a whopping 55 percent decline in four years. By the second quarter of 2010, owners’ equity had climbed back to $7 trillion.

Even with the 87 percent rebound in the Wilshire 5000 Total Market Index from the March 2009 lows, household net worth is still below its 2007 peak.

Housing, which along with manufacturing has traditionally led the economy out of recession, won’t be pulling its weight this time -- even with historically low mortgage rates. And there isn’t anything the government can do except let prices fall so the market can clear, something it’s been unwilling to do.

Aside from the fact that the rebound in equities would directly benefit fewer than half of US households, what's this about government impotence? Government can do plenty.

If the fascists over at the Federal Reserve can loan a bunch of fascist bankers and fascist industries $9 trillion from 2008 to 2010 at nearly zero percent interest, surely it can come up with $6.1 trillion for homeowners to close the gap in lost equity in household real estate.

Oh, but I forget! Most homeowners aren't fascists like the oligarchy!

My bad.

Love the makeover, though, Caroline. You look mahvelous.

CPUSA Openly Aligns Itself With President Obama

President Obama, speaking to the House Republicans, on Friday, January 29, 2010, about the healthcare legislation debate:

"Now, you may not agree with Bob Dole and Howard Baker, and, certainly you don't agree with Tom Daschle on much, but that's not a radical bunch. But if you were to listen to the debate and, frankly, how some of you went after this bill, you'd think that this thing was some Bolshevik plot. No, I mean, that's how you guys -- (applause) -- that's how you guys presented it."

But the Bolsheviks aren't "plotting." They're openly applauding.

From The American Thinker:

July 20, 2009

Obama and the CPUSA

Randall Hoven

I encourage you to read the latest words from Sam Webb, National Chair of the Communist Party USA. As is the wont of communists, Mr. Webb is rather long-winded; I provide only a few interesting excerpts:

Six months into the Obama presidency, I would say without hesitation that the landscape, atmosphere, conversation, and agenda have strikingly changed compared to the previous eight years.

In this legislative session, we can envision winning a Medicare-like public option and then going further in the years ahead.

We can visualize passing tough regulatory reforms on the financial industry, which brought the economy to ruin.

In the current political climate, the expansion of union rights becomes a real possibility.

Much the same can be said about winning a second stimulus bill, and we sure need one, given the still-rising rate, and likely long term persistence, of unemployment.

Isn't it possible in the Obama era to create millions of green jobs in manufacturing and other sectors of the economy in tandem with an attack on global warming?

The new conditions of struggle are possible only - and I want to emphasize only - because we elected President Obama and a Congress with pronounced progressive and center currents.

Yes, socialism is our objective and, according to recent public opinion polls, it is increasingly attractive to the American people. But clearly it is not on the immediate political agenda.

As for our radicalism, we should be as radical as reality itself. And reality strongly suggests that our main task is to bring the weight of the working class and other democratic forces to bear on the reform process with the aim of deepening its anti-corporate content and direction.

Let's be aware that he [Obama] has to keep a coalition together for his long-term as well as immediate legislative agenda. Let's give President Obama some space to change and to respond to pressures from below.

The Right Wing, the American Medical Association, the pharmaceutical and insurance companies have drawn a line in the sand on health care.

The core of this struggle, whether we like it or not, turns on the inclusion of a public option in a health care bill.

Months ago it was said that the downturn could be "L-shaped" rather than "V-shaped." In other words, the crisis begins with a steep decline in economic activity followed by long period of economic stagnation.

I suspect that this is what will happen, thus making sustained government and people's intervention an imperative. In my view this should take at least three forms:

First, more economic stimulus: the economy is underperforming and nearly 30 million workers are unemployed or underemployed and that number hasn't peaked yet.

Second, restructuring is imperative. The old economic model that rested on bubble economics, cheap labor, financial manipulation and speculation, deregulation, capital outsourcing, environmental degradation, and so forth, has to be replaced by a new model that expands and restructures the productive base and is "people and nature" friendly.

Finally, the economy has to be democratized. The wizards of Wall Street and inside the Beltway failed miserably, in fact, so miserably those economic decisions that affect the welfare of millions shouldn't rest in their hands.

In the meantime, the struggle for immediate public sector jobs and relief should command our attention.

President Obama ... has expressed a readiness to engage with countries that during the Bush years were considered mortal enemies - Iran, Cuba, Venezuela, North Korea, and others.

In Iraq, the U.S. withdrawal plan is proceeding, with the first stage being withdrawal from Iraqi cities by July. President Obama has reiterated his intention to stick with the pullout deadlines. Even with the caveats about what U.S. forces might remain, this is a major victory for the peace movement.

If not already painfully obvious to you, let me point out a few things:

(1) Obama's policy agenda and that of the CPUSA are in perfect alignment: more stimuli; green jobs; global warming; public sector jobs; more regulation and, in fact, restructuring of the entire economy; eventual single-payer health care, with the public option being critical to any immediate plan; union-friendly legislation; cutting defense spending; engaging and normalizing relations with the US's mortal enemies like Hugo Chavez, the Castro brothers and the reigning mullahs of Iran; claiming victory in Iraq as their own.

(2) Obama's political approach is also in perfect harmony with that of the CPUSA's. The method is gradualism. Overall, Obama is doing pretty well at achieving CPUSA's goals under the current political circumstances. The Left should not expect immediate and radical changes. And of all things, the Left should not "define the current struggle as one that arrays the people against President Obama. That's not Marxism; it's plain stupid."

(3) Mr. Webb expects a lousy economy to continue. Specifically, he expects the "L-shaped" recovery. But this "long period of economic stagnation" will be an excuse for continued government intervention. As Lenin supposedly said, "the worse the better."

(4) Socialism is the objective.

In my view, this duck has a bill, webbed feet and feathers; quacks, walks, flies and swims; and has DNA that matches that of a duck. I'm willing to call it a duck.

The really striking thing about all this, though, is that the CPUSA can openly align itself with the President of the US, right under our noses, and it will have zero effect on public sentiment because the lapdog media studiously averts its gaze.