'Things Always Look Darkest Before They Go Completely Black'

Yves Smith at Naked Capitalism here has a fairly low opinion of the regime's default scare tactics:

[U]tter failure of the Treasury or Fed to make any reassuring noises or discuss contingency plans is making rattled nerves much worse than they need to be.

Come Over to the Debt Side

Q2 2011 GDP at 1.3 Percent, Q1 Revised Down Into the Tank to 0.4 Percent

Just how does Q1 go from 1.8, to 1.9, to 0.4? That's an error of only 79 percent.

Q4 2010 also was revised down, to 2.3 percent from 3.1 percent. That's an error of 26 percent.

And revisions going back to 2007 when the Dems took over the Congress under George Bush are even worse, saved for the end of July while everyone's on vacation and not paying attention. And of course it's Friday.

Which reminds me. I neglected to do Bank Failure Friday last week. There were some, but sometimes reporting on it feels like writing an obituary, and last Friday was filled with too much death already.

The GDP story is here.

Obama Regime's Default Alarmism is Straight out of Saul Alinsky

Caroline Baum notices that the Obama regime is acting strangely:

Instead of dangling the default threat every chance they get, Obama and Geithner should be telling the world that the U.S. has every intention, and the resources, to meet its debt obligations. They should shout it from the rooftops, put a banner on the Treasury Direct website, and use the Sunday talk shows to reassure investors, not frighten them.

Rule 3 for Radicals: Whenever possible, go outside the experience of the enemy.

And make no mistake about it, you are the enemy.

Another Voice Wrongly Claiming 'The Money is in the Middle'

Brian Wesbury at The DC, here:

What most people don’t realize is that the U.S. has gorged so much (boosting spending from roughly 18% of GDP in 2000 to 24% of GDP today), that the only way to pay for it is to tax the middle class. ...

The money is in the middle. And the only way our politicians can get it is to follow Europe’s lead and institute a national sales tax or Value-Added Tax (VAT). This is the elephant in the room that is never talked about. Those who are using the debt ceiling in an attempt to cut spending are actually saving the middle class from tax hikes — not the millionaires and billionaires.


It's a frequently repeated claim that the money is in the middle, but it's just not true, no matter how often  it is said.

If all the (reported) income in America were poured into a giant hour glass, you'd have to start it and wait about twenty minutes to begin to visualize how all the money is actually distributed.

A snapshot taken at that moment would show $5.7 trillion in adjusted gross income still in the top, and $2.8 trillion in AGI in the bottom. The kicker is that 35 million tax returns split what's on top, while the remaining 105 million tax returns, 75 percent of the total, divvy up what's on the bottom.

The money's definitely not "in the middle."

It's hard to get agreement on what's middle class in America, especially since it is a conceit of our society that everyone is middle class. The rich aspire down to it to escape notice, the poor up to it to escape the indignities of dependence.

But no matter what smoke anyone tries to blow up your bottom, the biggest single pile of money remains with the top 25 percent:

Top 10 percent = 14 million tax returns (10 percent of the total) = $3.9 trillion in AGI
The next 25-10 percent = 21 million tax returns (15 percent of the total) = $1.8 trillion in AGI

The next 50-25 percent = 35 million tax returns (25 percent of the total) = $1.7 trillion in AGI
The bottom 50 percent = 70 million tax returns (50 percent of the total) = $1.1 trillion in AGI.

It's ridiculous to think that a VAT tax will somehow generate huge piles of new tax revenue on the backs of the middle class.  The VAT will hurt them just like Social Security and Medicare taxes hurt them because it's regressive, not because they have a lot of untapped money they're going to be parting with.

Considering how much tax evasion there already is in America of the unreported income variety, variously estimated (here at $2 trillion, resulting in a tax gap of $500 billion), a VAT will fail simply because it will drive more and more of the economy underground where cash is king and credit cards, checks, invoices and receipts are anathema. Think of it as the inverse of how the rich escape high rates of taxation, for example by shifting to capital gains away from ordinary income. A quicker way to become Greece I cannot think of.

Setting money free to move around openly is the key to an effective tax policy. But bringing it out into the open where it can be captured and taxed depends on perceptions of fairness.

As long as too many people think some people should pay taxes at a higher rate just because they have more, we're not going to get there. 

Gro Harlem Brundtland, Left Wing Anti-Semitic Fanatic, Was Breivik's Target

The following was reported here:

"Anders Behring Breivik had plans to come to Utoeya (island) while Gro Harlem Brundtland was visiting on Friday, but claims under interrogation that he was delayed," Aftenposten reported on Monday, citing unnamed sources.

The newspaper said the 32-year-old right-wing fanatic wanted to "hit Gro".

Breivik's Target at Utoya, Gro Harlem Brundtland, A Long-Time Norwegian Anti-Semite

From Preachers of Hate: Islam and the War on America by Kenneth R. Timmerman (2004):

"The Nazi references emerge frequently and easily in today's Norway, and they are directed mainly at Israel, but also at the United States. At a huge demonstration in central Oslo to protest Israel's independence on April 20, 2002, former Labor Party prime minister Jens Stoltenberg addressed pro-Palestinian groups waving Nazi flags. Without blinking, he endorsed their cause. 'There is one occupant, and one occupier,' he told them. (It was his party, under the leadership of Gro Harlem Brundtland and Foreign Minister Johan Holst, that oversaw the Oslo Declaration of Principles in September 1993.) The former leader of the center-left Center Party, Gunnar Stalsett, now the state-appointed Lutheran bishop of Oslo, addressed a crowd of anti-Israeli demonstrators waving Nazi flags on April 6, 2002. 'He asked that they pull down the swastikas before he spoke,' an Israeli diplomat in Oslo told me. When the crowd kept on waving them, he spoke anyway. ...

"Anti-Israel demonstrations and Israeli 'misdeeds' in the West Bank and Gaza get extensive coverage in a Norwegian press whose brazen anti-Semitism goes way beyond any tolerable expresssion of a political disagreement with Israel. For years, Norwegian reporters and cartoonists have compared Israel to Hitler's Third Reich and have used classical anti-Semitic themes that arguably should be outlawed under Norway's 1975 hate crimes legislation." (pp. 239f)

"Labor Party heavyweights began traveling to Lebanon to pay homage to Arafat. Among them were Thorvald Stoltenberg, the future foreign minister, and Gro Harlem Brundtland. Although she was older than the 1968 generation radicals, Brundtland took them under her wing. Under her leadership, many of the former Socialist Left Party activists joined the Labor Party. She promoted them to the party leadership, while adopting their anti-Israel agenda. In April 1983, when Brundtland headed the Association of Scandinavian Labor Parties, she invited Arafat to visit Stockholm. It was a major diplomatic coup that broadened his support in Europe. After an eight-month initial stint as prime minister in 1981, Brundtland twice returned to power, from May 1986 to October 1989 and, again, from September 1990 to October 1996, when Oslo was negotiated and implemented.

"One of the former Socialist Left Party activists promoted by Brundtland was Einar Foerde, who eventually became head of the Norwegian National Broadcasting Company. Until his retirement in 2001, "Foerde continued the tradition of picking key persons who shared his political views and placing them throughout the NRK," says Jan Gregersen. Another hard-leftist Brundtland brought into the Labor Party fold was Terje Roed-Larsen, the anti-Israel Communist from the Palestinian Front." (p. 245)

Why Isn't Sen. Reid's Bill DEAD ON ARRIVAL IN THE HOUSE?

Well, why isn't it?

The Republicans haven't been doing this right at all. They continue to act like earnest young men who believe if they keep acting, keep trying, keep changing, keep talking, they'll somehow convince the upper chamber to move.

Instead all they've proven is that they don't mean business.

They pass a budget which gets tabled in the Senate, A BUDGET WHICH ISN'T BALANCED, and assumes a revenue shortfall of $1 trillion in fiscal 2012.

Then they suddenly feel compelled to pass a debt-ceiling measure to cut spending, which gets tabled in the Senate. The time to cut spending and balance the budget was in the budget phase, not the debt-ceiling phase. Had they passed a balanced budget, they could have legitimately claimed to have no need even to address the debt-ceiling issue. 

Now they're going to pass an alternative to the debt-ceiling measure, which is going to get tabled in the Senate, after which the Senate will finally pass something of its own.

The House should declare it dead on arrival, pass a simple debt-ceiling increase of, say, $1 trillion in response, adjourn and call it a day.

Let the Senate table that. Or Obama veto it. Either way, the LACK OF SERIOUSNESS of the Dems and this regime would finally be exposed.

That's how you play chicken, and win. 

Employment Deterioration Under Obama More Than 2 Times Worse Than Under Bush

Louis Woodhill has the numbers here:

Over Bush 43′s two terms in office (96 months), America lost ground with respect to full employment by an average of 94,000 jobs per month, for a total of 9.1 million positions. During Obama’s first 29 months in office, the U.S. moved an additional 6.0 million jobs away from full employment, equivalent to an average rate of 206,000 per month.

So, in terms of the rate of employment deterioration, Obama’s presidency has been more than twice as bad as George W. Bush’s. ...

In June 2011, America had 2.9 million fewer people working than when Obama was inaugurated.

The Home Appraisal Business Has Been Screwed Up Since the 1930s

For all the gory details of yet one more long, failed experiment in fascism, American style, see the story by Steven Malanga, here.

Some Money Market Funds Increase Liquidity By Over 40 Percent, Lighten Up On Treasuries

As reported here:

Money market funds are avoiding the one-month Treasury notes which mature on August 4 and August 11. “Those are the securities most vulnerable to some sort of change,” said Joseph Abate, strategist at Barclays Capital. ...

Money market funds, which hold $338 billion of US government debt, according to Citigroup, are also reducing the amount of time they are willing to lend. This could raise funding concerns for banks, as they are reliant on short-term borrowing in the repurchase or repo market.

Crimes Against Humanity Conviction Would Net Breivik An Extra 9 Years in Jail!

The maximum of 21 years behind bars would go all the way up . . . to 30.

As reported here.

Those Norwegians really know how to hurt a guy.

In a country that wasn't itself completely insane, the preparations for the execution of the self-confessed murderer would already be underway.

John Sununu: Protecting 3 Million From Obamacare With Waivers Proves It's a Clinker

Here.

Shadow Inventory has Grown Over 67 Percent Since 2009 to 3.35 Million Units

Daniel Indiviglio has a nice chart and data from Laurie Goodman showing this, here.

So What if We Become Japan!

"What matters is whether investors really believe that they will be stiffed. In Japan they did not, and still do not."

-- Ambrose Evans-Pritchard, here

The thing is, ZIRP has been stiffing us for quite some time now. And the dollar is down nearly 25 times since 1971 alone.

The phrase "Federal Reserve policy" has been a synonym for screwing the American taxpayer . . . since 1913.

Obama Admits It Again: He's Tempted By Tyranny, and Disrespects Limits

"The idea of doing things on my own is very tempting, I promise you, not just on immigration reform." (quoted here yesterday)

Here's The New York Times in March: Mr. Obama has told people that it would be so much easier to be the president of China.

And, of course, at the age of nine being prime minister of Indonesia already looked pretty good, according to this in April: His mother's ambition was clearly not lost on the future US president. When his Indonesian stepfather asked him once what he wanted to be when he grew up, he was probably expecting him to say an airline pilot or an athlete. "'Oh, prime minister', Barry answered,'" wrote Ms Scott.

The hunger for power evidently began early. But its possession now apparently does not satisfy. What's especially disturbing is the frustration Obama keeps expressing with the limits we place on presidential power in America. He's frequently seen bowing to foreign leaders. Why not to the constitution?

Nothing in it prevented FDR from seeking a third term, and then a fourth, except respect for the long tradition of the unwritten rule of laying down power voluntarily after two terms, going back to the example of George Washington. The 22nd Amendment to the Constitution, ratified in 1951, was the people's response to the lack of self-control FDR showed by his actions.

Obama would do well to consider that more seriously, and these words from our Declaration of Independence:

A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

The Red Army Faction Mass Violence Thought For The Day

While everyone jumps on the bandwagon to vilify what happened in Oslo as somehow inherently right-wing, let's all think back to 1968 for a moment:


"If one sets a car on fire, that is a criminal offence. If one sets hundreds of cars on fire, that is political action."

-- Ulrike Meinhof

"Norway, Israel and the jews"

For everything anti-Semitic and anti-Israel in Norway, I highly recommend "Norway, Israel and the jews," here.

The AUF of Utoya Fame is Completely Radicalised Against Israel

Seen here:

Labor Youth not only subscribes to a Manichean perspective on the Israel-Palestine conflict – they are baying for the conflict to increase. Christian People’s Party does not approve.

Vårt Land offers the article “Labor Youth is playing at war” by journalist Johannes Morken. Excerpt:

Labor Youth leader Eskil Pedersen demands that Norway positions itself “even more clearly on the side of the Palestinians”. This makes CPP-youth leader Elisabeth Løland to mobilize against Labor Youth.

- The conflict has been going on for decades and has destroyed the lives of many humans, both Israelis and Palestinians. This is not a football match where one selects a side to support, and then to cheer every time they score a goal, says Løland.

Run sister, run, you’re doing good. As for Eskil Pedersen of Labor Youth, you know full well how your brethren are faring under the loving rule of Hamas and PA alike, and yet, in order to be sufficiently radical and tough, you choose to look the other way. That’s the kind of creature you are, you and Anette Trettebergstuen alike.

Jewish Children In Oslo Schools Report The Most Harassment

Gee, I wonder why. Just maybe because anti-Semitism, the preferred pose of Norway's Labour Party and its youth arm, the AUF, is pandemic in Norway, thanks to Gro Harlem Brundtland. Imagine that. A doctor spreading a disease.

Excerpted from a news report in June:

Students with ethnic Norwegian background were the least harassed, but the rate of harassment rose in line with the number of non-Norwegian students at their schools.

Most worrisome for school and city officials was the high level of Jewish students, 33 percent, who reported harassment at least two to three times a month. That compares to 5.3 percent of Muslim students who said they’d been harassed. Fully 9 percent of the students responding said they’d been harassed at school because of their religion or faith, while Christians experienced the least harassment. ...

More than half of the students, 52 percent, said they’d experienced that the word jøde (Jew) was used to describe something negative. Fully 41 percent confirmed having heard jokes about Jews at school and 35 percent had noticed generally negative commentaries on Jews. As many as 5 percent had heard other students deny that the Holocaust occurred during World War II.

“Respect, tolerance, equality and inclusion must be made crystal clear in the schools’ educational program,” said director Astrid Søgnen of the city’s department of education.

What a joke. Whether it's under fascists like Quisling or communists like Labour, anti-Semitism finds fertile ground to flourish and grow in Norway, no matter what.