Top Corporate Bankruptcies

The largest corporate bankruptcies in US history, according to the most up-to-date report from The Wall Street Journal:

1) Lehman Bros., $691 billion

2) Washington Mutual, $327.9 billion

3) WorldCom, $103.9 billion

4) GM, $91 billion

5) CIT Group, $80.4 billion

6) Enron, $65.5 billion

7) Conseco, $61.4 billion

8) MF Global, $41 billion

9) Chrysler, $39.3 billion

10) Thornburg Mortgage, $36.5 billion

11) Pacific Gas and Electric, $36.15 billion.

Just four of these top failures occurred previous to 2008.

Fannie Mae and Freddie Mac Have Now Cost the Taxpayers $141 Billion

The latest cost figures are reported in The Wall Street Journal, here.

Rush Limbaugh, Boob Extraordinaire, Attacks The Basis of Western Civilization

In a long, truly embarrassing, tirade against studying Greek and Latin and all things Classical, here. 

Calling all that useless and worthless because some student studying Classics is worried her degree will prove to be so and said so at Occupy Wall Street:

Now, do you think somebody going to college, borrowing whatever it is in this case, $20,000 a year to get a degree in Classical Studies ought to be told by somebody at a school that it's a worthless degree?

In this Rush is the typical American utilitarian, for whom any field of study which doesn't get you a job and a career in that field is useless and worthless.

The lumpen barbarians aren't just occupying Wall Street.

Happy Binary Palindromic All Saints Day!

11.1.11

The Collection is Eluded: Consumption Taxes Allow YOU to Control How Much Government Gets

And that's why the FAIR TAX has gone nowhere so far. Neither Democrats nor Republicans want YOU to kill the golden goose.

But now we have the very likeable Herman Cain, who advocates the consumption tax, the tax the Founders advocated. Even Alexander Hamilton, to whom we owe our strong central government, advocated for it in Federalist 21:

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

Two important commentators at Forbes are coalescing around the perfections associated with a consumption tax, Lawrence Hunter and John Tamny, but Hunter is clearly the constitutional originalist in this matter.

John Tamny, who has argued for a gross receipts tax on corporate business if there must be a corporate tax, however, has caught the spirit here:

As Larry Hunter, another fellow Forbes contributor has noted recently, the beauty of a consumption tax is its limiting nature. Quite unlike taxes on income that are paid no matter what, with a consumption tax individuals would be able to limit the amount of money handed to the government by virtue of spending less.

This is particularly important during times of economic hardship. While with income taxes we pay regardless, if a consumption tax were implemented Americans could put the federal government on a diet at the same time that economic uncertainty is forcing them to tighten their own belts.

At present, and as evidenced by the boomtown that Washington, D.C. currently is, the government industrial complex is gorging at the same time that most Americans are reducing expenditure. This is wrong on so many levels, and as it’s true that during downturns individuals tend to spend less (their savings once again an economic stimulant), so should Washington be forced to. 

Morgan Stanley's Stephen Roach Ridicules Fed's War on Savers, Who Are Indispensable to Future Growth

He is quoted here at CNBC.com, identifying zero interest rate policy as

"financial repression practiced by your favorite central bank, the Federal Reserve. The idea that we can run zero interest rates in perpetuity and penalize savers is absurd."

"Do you know that half of American workers have no retirement fund?"

"How else are we going to fund economic growth?"

"Right now we’re borrowing surplus savings from abroad because we don’t save a nickel at home, and we have to wean ourselves from that."

Last week's GDP release indicated a precipitous fall in the personal savings rate of 20 percent in the third quarter to 4.1 percent annualized as Americans spent all their minor wage gains and diverted monies from savings just to keep up with rising prices for food, energy and healthcare, among other things.

They are not buying major appliances with the money, as Whirlpool is set to lay off 5,000 in coming months due to rapidly falling sales.

Herman Cain's National Sales Tax Might Make Renters Better Off, With Transitional Problems For Existing Owners of Residences and Rental Income Properties

An important study published in 2008 here simulating the effects of the Fair Tax, Herman Cain's ultimate goal, namely a consumption tax to replace all other federal taxation, concluded the following about its impact on housing:

The enactment of H.R. 25 thus causes the homeownership rate to gradually decline as the demand for housing falls. Demand for owner-occupied housing decreases because of the elimination of the tax on normal returns to capital in the nonresidential and rental housing sectors (which reduces the relative tax advantage of owner-occupied housing) and the elimination of the tax deductions for mortgage interest and property taxes. Note that under H.R. 25 all consumption goods are treated roughly the same since most nonresidential consumption is taxed, rental housing payments are taxed, and the tax on new investment in the owner-occupied sector is roughly equivalent to a front-loaded or prepaid tax on the flow of housing services from such investment; only housing services from existing, owner-occupied housing are untaxed. As a result, there is no preferential tax treatment of new investment in owner-occupied housing under H.R. 25. Because of this, a portion of the investment in owner-occupied housing that would have occurred under the income tax is shifted to the nonresidential and rental housing sectors. Rental capital as a share of the total capital stock increases from 13.4 percent to 13.7 percent in the long run and the output of rental housing as a share of total housing output increases from 24.9 to 26.2 percent. This decreases the real price of rental housing services as the stock of rental housing increases, which makes renters better off. ...

Our results indicate that such a reform would generate significant overall macroeconomic improvement in both the short and long runs, reflecting the labor supply and savings responses to lower overall tax rates on labor income and the elimination of the taxation of normal returns to capital income (a marginal effective tax rate of zero on the income earned by new investment). In particular, the model simulation results indicate that GDP would increase by 3.8 percent in the long run, reflecting a 2.9 percent [increase] in labor supply and a 5.3 [percent] increase in overall investment. However, the implementation of such a reform would raise some significant transitional issues, especially in the housing sector. These can be grouped into effects on the owner-occupied housing sector and the rental housing sector. ...

[T]he simulations suggest that the prices of existing homes would fall by 10.1 percent in the year of enactment of H.R. 25, although this effect would dissipate rather quickly, with declines of only 2.6 percent two years after reform, 1.2 percent five years after enactment, and no effect in the long run. ...

[T]he real value of existing rental housing would decline by 25.7 percent in the year of enactment of reform, and this decline would remain roughly constant, with a long run decline of 25.8 percent. These declines arise because investments in rental housing were made on the assumption of continued depreciation deductions under the income tax, but these deductions disappear under the sales tax while rents are fully taxed under the new regime.

Author Estimates Underground Economy Worldwide at $10 Trillion a Year

There is a story about the new book, Stealth of Nations by Robert Neuwirth, here:

More than half of all employed people worldwide work off the books. And that number is expected to climb over the next decade.

"Estimates are that the informal economy around the world is [worth] about $10 trillion a year," says journalist Robert Neuwirth. "That's an astounding figure because what it means, basically, is that if the informal economy was combined in one country, it would be the second-largest economy on Earth, rivaling the United States economy."

At a tax rate of 25 percent, which is what the US budget, if we had one, effectively requires because we are spending $3.8 trillion per year in a $15 trillion economy, worldwide we are talking lost tax revenue of $2.5 trillion. 

Herman Cain on Trade: Imports Are Subject To OUR Domestic Taxation

I remain puzzled by this: still as of this moment maybe only one guy has really sounded the alarms about Herman Cain on free trade to its devotees, namely Jerry Bowyer at Forbes.

Larry Kudlow talks up Herman Cain like crazy every Saturday on his radio show, and I've been listening for weeks while all the other candidates come out and talk with him about flat tax proposals of their own, and still none of Kudlow's free-trade peeps seem to have picked up on it, nor has Kudlow for that matter.

While they do not take Herman seriously enough to read even Herman's own description of his 999 Plan, however, the money has started to pour in, $5 million in October alone, most of it on-line, according to Robert Costa at National Review here.

And I don't think any of Herman's Republican challengers has brought it up either. They'll criticise one or another feature of the 999 Plan as too complicated, unrealistic, unpopular or unworkable, but I still do not hear any of them criticise Herman as a protectionist.

But Herman makes no secret of his playing-field-leveling plans.

As shown here:

Exports leave our shores without the Business Tax [9 percent] or the Sales Tax [9 percent] embedded in their cost, making them world class [!] competitive. Imports are subject to the same taxation as domestically produced goods, leveling the playing field.


In other words, imports will get slapped with a 9 percent business tax and with the 9 percent sales tax just as domestic goods are in order to protect our market from unfairly subsidized products designed to undercut our prices, capture market share and drive US competitors out of action on our own soil.

Shhhhhhh!

Herman Cain is running a stealth fair trade campaign under cover of a Fair Tax program, designed in part obviously to appeal to Democrat voters in union shops.

It tells you a lot about the guy, especially since he's the only Republican running who is serious about overturning the income tax itself. All the rest of them accept the assault on the constitution it represents.

Herman is a wily devil.

(source)

Nancy Pelosi Sandbags Maria Bartiromo: Quibbles About ObamaCare Waivers For Small Companies When Vast Majority Go To Union Members And Employees of Insurers

The video of Rep. Nancy Pelosi protesting that most of the 1,800 ObamaCare waivers have gone to small companies, provoking Maria Bartiromo to complain the waiver for McDonald's wasn't for a small company, is here.

Waivers shown on the official government lists, found here, tell a revealing tale, however, which Nancy Pelosi obviously didn't want to talk about.

The first few lists show a wide variety of businesses and plans, many indeed with relatively few employees, if by few you mean under 1,000 covered employees. But I counted alone 20 firms I recognized by name with over 1,000 employees and up to 50,000. Like Dish Network, Cracker Barrel, Ruby Tuesday, Meijer, Western Growers, Grimmway Enterprises, Adecco, Crate and Barrel, and the NFL! These lists all told account for over 600,000 such employees.

But if you examine the rest of the lists, you'll find about 1.7 million union members given waivers and nearly 1 million employees of the health insurers themselves.

Occupy Wall Street Protesters in Madison Really Are Jerk-Offs

You always knew they were a bunch of wankers:

A neighboring hotel's staff alleged voiced concerns about having to recently escort hotel employees to and from bus stops late at night due to inappropriate behavior, such as public masturbation, from street protesters.

Reported here.

The Republican Establishment Has Taken the Tea Party to the Cleaners

So said Lawrence Hunter, here, of the debt-ceiling fiasco:

[T]he problem with the direction the country is headed is the Republican Establishment, which has made a long career out of snookering and hoodwinking conservatives into believing the Republican Party is the party of small government, low taxes, freedom and prosperity at home, and peace abroad.  Republicans are, in fact, the very opposite.  To paraphrase Pogo, “We Republicans have met the enemy and he is us.”

Republicans are the stern, conservative side of the Janus Faced welfare state at home and empire abroad.  The GOP is Twiddle Dum to the Democratic Twiddle Dee.  And dear Tea Partiers, they just took you to the cleaners the same way they have been taking the American people to the cleaners since FDR rolled around the Oval Office. Welcome to the Nation’s Capital. ...

Until the Republican Establishment is replaced to a man (there are no women) with serious people devoted to restoring America, rather than just getting themselves re-elected time and again, no progress will be made toward winning this epic struggle for freedom, peace and prosperity.


Compare Rush Limbaugh here on October 13th, who keeps maintaining that the Tea Party must take over the Republican Party, but who on issues running the gamut from bank bailouts to taxes and tariffs to George W. Bush to spending to free trade adopts the alloyed rhetoric of the very establishment he decries:

The Tea Party is under assault from the Democrats and the Republican elite, and now the battle has been brought full fore in the pages of the New York Times Magazine.

There's some quotes from various people in this story.  Bill Kristol on the Tea Party:  "It's an infantile form of conservatism."  Scott Reed, veteran strategist and lobbyist:  "I think it's waning now," talking to the reporter of the story about the Tea Party's influence.  "Party leaders have managed to bleed some of the anti-establishment intensity out of the movement, Reed said, by slyly embracing Tea Party sympathizers in Congress, rather than treating them as 'those people.' Did he mean to say that the party was slowly co-opting the Tea Partiers? 'Trying to,' Reed said. 'And that’s the secret to politics: trying to control a segment of people without those people recognizing that you’re trying to control them.'"  This is a Republican consultant talking about how to neutralize the Tea Party.

John Feehery, a lobbyist who was once a senior House aide I think to Denny Hastert, is also quoted.  "The thing I get a kick out of is these Tea Party people calling me a RINO. No, guys, I've been a Republican all along. You go off on your own little world and then come back and say it's your party. Well, this ain't your party."


Rush should spend more time reading Forbes and less time The New York Times.

The Constitution Was in a Shambles Long Before Obama Came on the Scene

So says Lawrence Hunter here, who thinks the expedient of a Bill of Rights was only a parchment barrier to begin with:

The Founders gave us The War Power Clause of the Constitution vesting the exclusive power to declare war with Congress. Politicians replaced it with The War Powers Resolution and presidential wars of whim.

The Founders gave us myriad constitutional restrictions on the powers of the federal government both explicit and implicit. Politicians and judges replaced them with a series of court rulings, on the Commerce Clause for example, so sweeping in their expansion of the federal government’s regulatory powers beyond the Constitution’s writ that, in the words of Cornell Law Professor William Jacobson, “The Commerce Clause has proven voracious enough to swallow the rest of the Constitution. Any scraps left over will be devoured by the Due Process and Equal Protection clauses of the 14th Amendment.”

The Founders gave us habeas corpus and the Fourth Amendment, protecting against arbitrary arrest and guaranteeing that people would be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures. Politicians replaced them with The Patriot Act and the Homeland Police State, preventative detention, rendition, unauthorized wiretaps, secret searches and seizures and TSA.

The Founders gave us the Fifth Amendment, guaranteeing the people protection against over-reaching police and prosecutors, forced self-incrimination and double jeopardy, and against laws that would confiscate private property without due process and just compensation. Courts and Politicians gave us a series of rulings and legislation allowing the police, prosecutors and judges to act arbitrarily in the name of the general welfare, public safety and national security without regard to the cherished Rights of Englishmen that were passed down to us through the United States Constitution.

The Founders gave us the Eighth Amendment protecting the people against the imposition of excessive fines and infliction of cruel and unusual punishments. PB&J gave us RICO, prosecutorial charge stacking, extortionate plea bargaining, lawless and pathological judicial/prosecutorial misconduct, GITMO and water boarding.

Vote For Cain To Prove You're Not Stupid

(available here)

Cain v. Unable 2012

Beat Obama With a Cain!

Herman Cain for President: A Pizza in Every Oven

(as seen here)

'Only We Can Call Each Other Cracker'

(as seen here)

I'm Nominating This One For Blown Prediction of 2011

As seen here:

Retail consultancy Customer Growth Partners expects that American consumers have worked to put their finances in order and are ready to spend. Their forecast calls for holiday sales in the November to December period to rise 6.5 percent from last year to $554 billion.

That's twice consensus forecasts, which have put holiday sales growth between 2.5 percent to 3 percent. It also is the fastest pace for retail sales growth since 2004, when holiday sales rose 6.9 percent.

Why is this a crazy prediction? Because Whirlpool announced today that it is laying off 5,000 as consumers are unable to buy major appliances.

And because of this, reported here in the same place, also today:

The total compensation paid by employers in the third quarter rose by the smallest amount since at least 1982 as employees paid for a greater portion of their health care and companies continued to sit on their record hoards of cash. ...

Meanwhile, the savings rate plummeted to 3.6 percent, the lowest in four years, according to separate data released Friday from the Commerce Department. That’s down from 5.3 percent in June.

“Spending more when you’re taking home less and cutting into savings — That’s not the best recipe for stronger spending in the near term," Jonathan Basile, an economist for Credit Suisse, wrote in a note to clients.

Consumers remain under stress just to pay the bills, and are reducing savings to cope. That is not a recipe for a smashing holiday spending season.

The Federal Reserve is Deliberately Robbing Widows, Orphans and Retired People

So says Robert Higgs, here:

Given that the Fed’s official policy is to drive all interest rates to near zero, one may conclude that the Fed seeks to impoverish the widows, orphans, retired people, and all other financially untutored people who rely on interest earnings to support themselves in their old age or adversity. Can a crueller official policy be imagined, short of grinding up these unfortunate souls to make pet food or fertilizer?

The politicians constantly bark about their solicitude for those who are helpless and in difficulty through no fault of their own. Yet, the scores of millions of people who saved money to support themselves in old age now find themselves progressively robbed by the very officials who purport to be their protectors.