Showing posts with label Economy. Obama. Show all posts
Showing posts with label Economy. Obama. Show all posts

Monday, August 9, 2010

Obama Critics-- Change that's Not; plus Gambling and Gluttony by the Disproportionately Powerful Led to Financial Collapse, & More

In This Issue:

- John Pilger: Change that's Not: 'Obama on Bush route'

- Cindy Sheehan: Hopium and Hypocritium

- Decline of the Middle Class as Metaphor for the Decline of America

- Disproportionate Representation on the Supreme Court (& Elsewhere) [Edited 8/12]

- Dean Baker's Beat the Press: Immigration and Population Comments

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John Pilger: Change that's Not: 'Obama on Bush route'

RussiaToday | August 11, 2010

Recent sanctions against Iran are an attempt by the US to return the country to its sphere of influence, claims veteran journalist John Pilger. "Iran was a pillar of the American empire in the Middle East. That was swept away in 1979 by the Islamic revolution, and it has been American foreign policy to get that back," he said. "It has absolutely nothing to do with so-called nuclear weapons. The nuclear power in the Middle East is the fourth biggest military power in the world and that is Israel. It has something like 500 or more nuclear warheads. It is never discussed." Pilger added that Barack Obama has failed to change the trajectory of US foreign policy and following George W. Bush's line. "For the first time in US presidential history -- it has not happened before -- a president has taken the entire defense department bureaucracy, and the Secretary of State for Defense, from a previous discredited administration. We have basically Robert Gates and the same generals running American foreign policy with a lot of help from people of like mind."

[As I shared with used to be "Yes We Can--Hope & Change" democrat friends at the time of his appointments, the ramifications of Obama's selection of aids, councilors, and cabinet members, foretold the future we are now experiencing (but what does a poor white boy know? Criticism automatically becomes suspect racism. Frankly, I much prefer Martin Luther King or Malcom X to Obama.). - Chris]

http://www.youtube.com/watch?v=2UJ87MptxaU

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Hopium and Hypocritium

By Cindy Sheehan

August 11, 2010 "Information Clearing House" -- The arrogance of the Bush administration could never be surpassed, right? Wrong!

Today, Whore House (again, with my apologies to my sex-worker friends) spokeswhore, Robert Gibbs, was quoted as saying this of the “professional left” who liken Obama to his predecessor:

“(They) need to be drug tested,” and that these principled critics of the Empire are “crazy.” This kind of hearkens back to earlier in the Changery when Rahm Emmanuel, Obama Chief of Staff and committed Zionist, called us: “F@#king Retards.” Nice, huh?

Rahm Emmanuel is almost as sensitive as Dick Cheney and Robert Gibbs is almost as smart as Ari Fleischer—George’s first Press Secretary.

These quotes of Gibbs’ (who’s not nearly as perky as Dana Perino) highlight two things for me: the slipperiness of the Obama regime and the stubborn hopenosis of its supporters.

First of all, we were force fed daily doses of mass-media propaganda during the presidential campaign telling us that Obama was a “community organizer,” a “man of the people” and don’t forget the famous, “If you want Obama to do the right thing, then you have to make him.” Now the Changer in Chief’s staff is telling us if we are critical of him from the “professional” left, we are drug-crazed lunatics—not principled opponents of the Empire.

I know I have been out in front of Chéz Obama (loudly) expressing my views on his foreign policy many times (so much so, I was banned from the Whore House for four months) and single-payer healthcare advocates were doing the same during the entire fascist healthcare give-away to the corporations. Our voices and vision for a more peaceful, sane, and healthier way of doing things have not even been given a seat at the proverbial table. So, what Gibbs is telling us is to: “Just shut the eff up—we don’t care what you say or want.”

During the same interview where Robert Gibbs called me (yes, I take it personally) a “drug-crazed lunatic,” he also used the time-tested logical fallacy known as a non-sequitur (it does not follow) to say that we would only be happy if the president delivered “Canadian style healthcare,” and “closed the Pentagon.”

Of course, we advocated for single-payer healthcare and only a war-crazed maniacal empire needs a War Department the size of many small countries with budgets to match. But the “president” didn’t even get in the same universe as “Canadian style healthcare” and has vastly increased funding to the Pentagon and Bush’s wars of terror.

Also, the acceptance of this Imperial Faux Pas (IFP) illustrates how far this country is divided along faux political lines. The only change Obama has brought with him to the Whore House is negative, bad, bad, bad, change. We cannot, should not, must not, and better not criticize the Imperial First Family (IFF). However, we are supposed to take up pitchforks and torches when the barely functioning Sarah Palin says something stooopid and forget and forgive the Obamas for Imperial Excess (trips to Spain on our many dimes, $6000 handbags, etc) and their stooopidity.

We also have to ask ourselves a very important question—why did Gibbs do this? Of course, these people don’t make mistakes—even when they allow their true feelings to shine forth for the entire world to see, it is for very calculated reasons. Could it be because of the dismal jobless “recovery?” Could it be because of the obvious continuation and escalation of the wars? Could it be because the Obamas are finally being criticized for their “Let them eat cake” mentality? Could it be because Gibbs wants to blame the “professional left” for Obama’s failures and make it our fault when the Democrats get creamed in November?

So, I want to take Gibbs up on his offer—I will submit a vial of my urine to a location of his choosing—hell, I will even go and pee in the bathroom of the press corps room and hand him a warm sample, if that makes him happy—if he does the same. I seriously doubt that 535 members of Congress would pass the pee-test and I seriously doubt many denizens of the Whore House would, either.

I also wonder when Obama’s supporters will quit smoking the Hopium or taking their daily dose of Hypocritium—those are the people who need to be drug tested, not the ones who have remained ideological pure. What is so “crazy” about wanting things like indiscriminate killing of civilians to end globally and social justice here locally?

I’ll match my pee up against theirs any day!

Please visit Cindy Sheehan's Soapbox
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Decline of the Middle Class as Metaphor for the Decline of America

By Raymond J. Learsy

August 09, 2010 "Huffington Post" - -Over the last decade this nation has experienced a massive loss of productive and high value jobs in manufacturing, trade, and the professions sending many overseas and having many destroyed through the egregious misdirection of the self serving priorities of our financial institutions encumbering viable companies making real goods and services with untenable debt. Leveraging their assets in order to maximize profits for the financial engineers before flipping the company or taking it to market as an IPO. Too often the workers who made the company are left with little or nothing while the Wall Street "whiz kids" march off with a bundle having destroyed the vision, imagination and the hard work that went into creating these companies, to their benefit and to the detriment of its workers and society at large.

'Disproportionate' is the freighted word that shackles our society. Over the past few years some two-thirds of the gain in national income has gone to the top one percent of Americans. Mostly those in the financial industry harbored in such government protected entities as 'bank holding companies', part of something that has come to be ominously called the "shadow banking system". They bring virtually nothing viable to the economic landscape other than egregious speculation gorging on complex derivatives enriching the financial players, while through their malign impact, impoverishing great swaths of the American and world economy (i.e. betting on the collapse of the housing market). When these bets go dramatically wrong also collapsing the institutions that took the long side of the bets, they are then bailed out by the government making good the value of these 'bet' instruments whose function had no greater economic justification than a compulsive gambler's casino bets. And the grim irony, when the red comes up instead of black it's the local inhabitants of the casino's venue who are asked to pay to keep the casino afloat, while the casino lets the gambler keep his chips.

And the local inhabitants pay dearly. Their services are curtailed, their stores are forced to close, their local banks are driven to the edge, the value of their houses plummet or are repossessed. Not having insider status their financial assets deteriorate dramatically and even in desperation had they wanted to get back into the casino to try their own luck given their new world being bereft of all other opportunity, the house wont extend them credit. Its just as well, because they wouldn't have to see our compulsive gambler swilling Dom Perignon and downing a small mountain of Pate de Foie Gras after having feasted on Beluga Caviar at the casino's resplendent restaurant.

The gambler is there, and he or his proxy will always be there. And the town and its inhabitants, tattered and poorer are still there trying to make do as best they can and trying to contain their simmering anger at the unfairness of it all, not quite knowing what to do. Some joining in the regional meanderings of the Tea Party, or some equivalent movement that promises to address the clear wrongs that are being inflicted and tolerated by those in charge.

When all is said and done it becomes clear that it is the Casino that needs fixing because it is the Casino that the set the rules, it is the Casino that has permitted the outrages that have resulted in the destabilizing of the norm and sanctioning the unexpected and unfair.

Now with a small leap of imagination lets transpose our government for the nefarious Casino. Clearly it needs a new management or a new way of managing. What has come before is not functioning and major changes are needed. The local inhabitants need a voice in running the Casino, which in a sense has been denied them because they are unable foot either the entry tab, or the needed cash to play at the tables. And that is what it has come to be, without access and without money no one at the Casino pays attention.

And that must now change for the inhabitants to ever again have a chance to rectify the wrongs imposed by the Casino's management and to fairly share in an equitable distribution of benefits should they accrue ahead.

As here, today too much of our political system is bought and paid for. Too much of our political system is self serving, responsive to the wings of our two parties and indifferent to the day to day concerns of middle Americans in spite of the incessant lip service extended to them. Yes, there is limp Wall Street reform, but no clawback of the exigencies that drove the nation to the brink. Yes there is a stimulus program, but faltering shamelesly through lack of clear direction. Yes, there is an alternative energy program without clear mandates nor meaningful results as the transfer of billions to the oil providers continues unabated. Yes, there are our soldiers dying in fragmented nation states far away without a modicum of sacrifice being asked of the home front. Yes, there are moneyed interests both domestic and foreign who have access to those who govern, without limitation and a shameless Congress ready to do their bidding in spite of the promises made in Presidential campaigns to curtail their influence. Yes we have courts of law who, through judicial minutiae rather than pragmatic sense of national welfare have given these moneyed interests even greater influence by striking down financial restraints on the powerfully funded in election laws, that make the middle class even more disenfranchised. Yes, there is talk of restraining government spending while special interests with access to government and its earmarks are encumbering the nation into ever greater indebtedness. Yes, while Main Street and middle class Americans continue to lose jobs, the pay checks on Wall Street and corporate boardrooms continue in their unabated and inflated manner while middle class Americans are absorbing pay cuts or shortened work weeks if they have any jobs at all, while teachers, the backbone of the nations future, police and firemen are losing their employment.

And so it goes, leaving the nation with a Frankenstein system whose core objective of governance has become self preservation of power and personal influence. This, while governing for the greater good of the nation has become a secondary and distant gerrymandered priority leaving the great body of the American electorate virtually without meaningful representation and forestalling and diminishing America's middle class' engagement with its government with every passing day.

And yet something is stirring. People throughout the land understand that the political system is broken and American's throughout the length and breadth of the county that their government no longer speaks for them no matter which party happens to be in power. They feel the system is gamed from within, for and about those who have access and the money to follow through to assure their parochial interests are taken into account and acted upon. How those interests impact the greater good has become dangerously secondary. Checks and balances seem to have gone by the board long ago.

Grass roots movements are beginning to stubbornly emerge from the depths of these frustrations of which I have touched on only a few, as the list could go on almost endlessly. Yes, there are the Tea Parties, and they should be listened to in order to begin to understand how people feel. But out there something much more significant is beginning to take hold. A movement new to many, headed by people of impeccable credentials who are devising a program using the new age technology to bring all Americans back into the political process in a meaningful way and most importantly in a way that each American can once again feel that he/she as a citizen once again has the stature and sense of prideful responsibility that his vote was meant to convey unto him as a meaningful participant in the process of nationhood.

The new organization is called "Americans Elect". I don't want to steal its thunder because it can much better directly convey its goals and points of engagement. It has the potential of becoming the salutary wave of America's political future. Their contact information is given as Kahlil.Byrd@AmericansElect.org.

Raymond J. Learsy, Scholar and author, "Over a Barrel: Breaking Oil's Grip on Our Future"
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Disproportionate Representation on the Supreme Court (& Elsewhere)

The article above refers in the second paragrah to the word disproportionate:

'Disproportionate' is the freighted word that shackles our society.

I have to agree.

disproportionate

dis·pro·por·tion·ate (dspr-pôrsh-nt, -pr-)
adj.
Out of proportion, as in size, shape, or amount.

adj [ˌdɪsprəˈpɔːʃənɪt]
out of proportion; unequal


Think of the Supreme Court, with 9 Justices. Six Catholics (around 22% of the US Population, 66% of the Court; three Jews (1-3% of the US population, 33% of the Court); zero white Anglo-Saxon protestants (55-60% of the US population and changing fast).

Back when I was in college, in the late 60s and early 70s, WASPs (White Anglo-Saxon Protestants) were seen as America's oppressive elite and were stereotypically demonized for having disproportionate representation and power in America. Given their lack of representation on the Supreme Court of the land today, I guess the demonization of WASPs has succeeded beyond the proponents wildest expectations.

[For the record, my mother and her family were Catholic, my father was an atheist, as I am. I was allowed to attend Protestant services with friends when I was a child. If necessary, I can sing the chorus to ""Jesus Loves Me:"

Jesus loves me,
this I know,
for the Bible tells mes so . . . .

Yes, Jesus loves me!
Yes, Jesus loves me!
Yes, Jesus loves me!
The Bible tells me so.]



In a New York Times article titled The Triumphant Decline of the WASP, by Noah Feldman, the decline is attributed to WASPs "hewing voluntarily to the values of merit and inclusion, values now shared broadly by Americans of different backgrounds:"

But satisfaction with our national progress should not make us forget its authors: the very Protestant elite that founded and long dominated our nation’s institutions of higher education and government, including the Supreme Court. Unlike almost every other dominant ethnic, racial or religious group in world history, white Protestants have ceded their socioeconomic power by hewing voluntarily to the values of merit and inclusion, values now shared broadly by Americans of different backgrounds. The decline of the Protestant elite is actually its greatest triumph.


Kevin MacDonald, editor of The Occidental Observer and a professor of psychology at California State University–Long Beach, while agreeing that WASPs have stood by their principles, sees the reasons for the WASP decline differently in his article "Elena Kagan and the new (unprincipled) elite," [See article for all links.]:

Indeed, Kagan’s arrival on the Supreme Court is a sort of official coming out party for the new elite. It’s been there for quite some time, but the Kagan nomination is an in-your-face-demonstration of the power of Jewish ethnic networking at the highest levels of government. And the first thing one notices is that the new elite has no compunctions about nominating someone for the Supreme Court even though she has no real qualifications. So much for the principles of merit and inclusion: Inclusion does not apply to WASPs now that they have been deposed. And the principle of merit can now be safely discarded in favor of ethnic networking.

[I should add that WASPs are not strangers to networking (i.e., Who you know--not what you know) of all sorts. Here in WASPy Baker City, the degree of in-group/out-group and religious networking in hiring, as opposed to purely merit-based systems, is truly astonishing in my view. - Chris]

[Back to Kevin MacDonald] As I noted previously:

This is a favorite aspect of contemporary Jewish self-conception — the idea that Jews replaced WASPs because they are smarter and work harder. But this leads to the ultimate irony: Kagan is remarkably unqualified to be a Supreme Court Justice in terms of the usual standards: judicial experience, academic publications, or even courtroom experience. Rather, all the evidence is that Kagan owes her impending confirmation to her Jewish ethnic connections (see also here).

The same goes for Jewish over-representation in elite academic institutions–far higher than can be explained by higher Jewish IQ. Does anyone seriously think that Jewish domination of Hollywood and the so much of the other mainstream media (see, e.g., Edmund Connelly’s current TOO article) is about merit rather than ethnic networking and solidarity? And then there’s the addiction of the new elite to affirmative action for non-Whites.

Whatever else one can say about the new elite, it certainly does not believe in merit. The only common denominator is that Whites of European extraction are being systematically excluded and displaced to the point that they are now underrepresented in all the important areas of the elite compared to their percentage of the population. The new elite distinguishes itself mainly by its hostility to the traditional people and culture of those they displaced. It is an elite that cannot say its name. Indeed the ADL was all over Pat Buchanan for merely mentioning that Kagan is Jewish and that, upon her confirmation, Jews would be one-third of the Supreme Court. . . . .

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Dean Baker's Beat the Press: Immigration and Population Comments

http://www.cepr.net/index.php/beat-the-press/

Undocumented Workers and Low Cost Labor

Monday, 09 August 2010 04:20

[NPR's] Morning Edition had a piece on people who hire undocumented workers to do tasks like landscaping their yards or cleaning their toilets. It quoted one person as saying that they hire immigrants rather than U.S. citizens or green card holders because she "believes American prices are inflated."

The article doesn't tell listeners what any of the employers in the piece do, but it is an absolute certainty that there would be a huge number of qualified people around the world who would be willing to do their jobs at a much lower wage than they receive. However, most people who work in occupations requiring more education enjoy much more protection from immigrant workers than people who landscape yards or clean toilets.

The position of the people interviewed in this piece is that they are entitled to protection from competition to keep their wages high, while they should be able to hire workers from the developing world at low wages to save money. It would have been helpful if the piece had elucidated their view more clearly.
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Robert Samuelson Is Worried That the United States is Becoming Less Crowded

Monday, 09 August 2010 04:05

Yes, in the strange but true category, we have a columnist with a major national newspaper worrying that population growth in the United States could slow or even reverse. Yes, I have the same fear every time I push my way into the metro at the rush hour or get caught in a huge traffic jam. Imagine how awful it would be if cities were less crowded. It could make housing cheaper, reduce pressure on water and other resources and cut greenhouse gas emissions. Shortages of workers would drive up wages as the least productive jobs go unfilled (e.g. the midnight shift at 7-11 and parking valets at upscale restaurants). It's  a looming catastrophe if ever there was one.

Samuelson bizarrely thinks that slower or negative population growth will hurt the economy. He thinks that it will slow demand growth. There are two simple problems with this story. First, we are in an international economy, so if demand in the U.S. economy is growing less rapidly than we can sell our output elsewhere. The other problem is the big "so what?"
If we can produce everything we want in the United States and still not fully employ our workforce then we can all get longer vacations and have shorter workweeks. In a functioning economic system, having too much is not a problem -- you just work less. In the Netherlands they figured this out -- they use work sharing rather than layoffs to deal with inadequate demand. As a result its unemployment rate is close to 4.0 percent. In Germany, work sharing has been so effective that its unemployment rate is lower today than it was at the start of the downturn.

See, this is really simple for countries that have competent people guiding their economy. It is only inept economic policy that makes a shortage of demand a disaster for people and the economy. Too bad Samuelson won't discuss this failure of economic policy.

Friday, February 6, 2009

How Bad Will It Get?

In This Issue:
- On The Edge

 - Paul Krugman



- Why Geithner Was Worse Than Daschle

- Tarp Fund Is Misleading the Public

- Interesting Letter to the Herald by Doug Darlington

- Yellow-headed Blackbird, Celebrating Spring in Baker County

- Convict Bush & Cheney

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No Comment at this point....
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On The Edge

 By Paul Krugman


February 06, 2009 "New York Times"
http://informationclearinghouse.info/article21918.htm

--- A not-so-funny thing happened on the way to economic recovery. Over the last two weeks, what should have been a deadly serious debate about how to save an economy in desperate straits turned, instead, into hackneyed political theater, with Republicans spouting all the old clichés about wasteful government spending and the wonders of tax cuts.



It's as if the dismal economic failure of the last eight years never happened - yet Democrats have, incredibly, been on the defensive. Even if a major stimulus bill does pass the Senate, there's a real risk that important parts of the original plan, especially aid to state and local governments, will have been emasculated.



Somehow, Washington has lost any sense of what's at stake - of the reality that we may well be falling into an economic abyss, and that if we do, it will be very hard to get out again.



It's hard to exaggerate how much economic trouble we're in. The crisis began with housing, but the implosion of the Bush-era housing bubble has set economic dominoes falling not just in the United States, but around the world.

Consumers, their wealth decimated and their optimism shattered by collapsing home prices and a sliding stock market, have cut back their spending and sharply increased their saving - a good thing in the long run, but a huge blow to the economy right now. Developers of commercial real estate, watching rents fall and financing costs soar, are slashing their investment plans. Businesses are canceling plans to expand capacity, since they aren't selling enough to use the capacity they have. And exports, which were one of the U.S. economy's few areas of strength over the past couple of years, are now plunging as the financial crisis hits our trading partners.

Meanwhile, our main line of defense against recessions - the Federal Reserve's usual ability to support the economy by cutting interest rates - has already been overrun. The Fed has cut the rates it controls basically to zero, yet the economy is still in free fall.



It's no wonder, then, that most economic forecasts warn that in the absence of government action we're headed for a deep, prolonged slump. Some private analysts predict double-digit unemployment. The Congressional Budget Office is slightly more sanguine, but its director, nonetheless, recently warned that "absent a change in fiscal policy ... the shortfall in the nation's output relative to potential levels will be the largest - in duration and depth - since the Depression of the 1930s."

Worst of all is the possibility that the economy will, as it did in the '30s, end up stuck in a prolonged deflationary trap.



We're already closer to outright deflation than at any point since the Great Depression. In particular, the private sector is experiencing widespread wage cuts for the first time since the 1930s, and there will be much more of that if the economy continues to weaken.



As the great American economist Irving Fisher pointed out almost 80 years ago, deflation, once started, tends to feed on itself. As dollar incomes fall in the face of a depressed economy, the burden of debt becomes harder to bear, while the expectation of further price declines discourages investment spending. These effects of deflation depress the economy further, which leads to more deflation, and so on.



And deflationary traps can go on for a long time. Japan experienced a "lost decade" of deflation and stagnation in the 1990s - and the only thing that let Japan escape from its trap was a global boom that boosted the nation's exports. Who will rescue America from a similar trap now that the whole world is slumping at the same time?



Would the Obama economic plan, if enacted, ensure that America won't have its own lost decade? Not necessarily: a number of economists, myself included, think the plan falls short and should be substantially bigger. But the Obama plan would certainly improve our odds. And that's why the efforts of Republicans to make the plan smaller and less effective - to turn it into little more than another round of Bush-style tax cuts - are so destructive.



So what should Mr. Obama do? Count me among those who think that the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh. What matters now, however, is what he does next.

It's time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation's future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.



Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. On October 13, 2008, it was announced that Mr. Krugman would receive the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, and his most recent, The Return of Depression Economics. 

© 2009 The New York Times
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Why Geithner Was Worse Than Daschle
by Donald L. Barlett & James B. Steele
February 4, 2009 | 8:44am

http://www.thedailybeast.com/blogs-and-stories/2009-02-04/why-geithner-was-worse-than-daschle

The Pulitzer Prize-winning reporting team—and authors of The Great American Tax Dodge—on the breakdown of America’s tax system—and why Timothy Geithner’s lapses were far more egregious than Tom Daschle’s.

The tax troubles of some of President Obama’s Cabinet nominees have exposed one of Washington’s dirty little secrets: Tax avoidance, error and fraud are out of control.

The terms "taxpayer error" and "taxpayer mistake" have become convenient ways to describe the complete breakdown of the American tax system. By our own rough estimate, as much as $600 billion—more than two-thirds of the government’s stimulus package—is lost each year as a result of tax fraud and avoidance.

Geithner actually acknowledged years ago that he owed the taxes—but didn’t pay them until he was nominated for
TheTreasury job. That hardly counts as a mistake.

But don’t look for Congress to order the IRS to begin collecting. For a quarter-century, lawmakers have toiled tirelessly to discourage enforcement of the Internal Revenue Code. Thomas F. Daschle and Treasury Secretary Timothy F. Geithner are the latest poster boys for the success of that campaign.

But their offenses were not equal. Despite the fact that Geithner sailed through the confirmation process—while Daschle went up in flames—Geithner’s tax troubles were actually far more egregious. People tend to give Geithner a pass, because the overall amount he owed was smaller and it just involved Social Security and Medicare, rather than income tax. But Geithner actually acknowledged years ago that he owed the taxes—but didn’t pay them until he was nominated for the Treasury job. That hardly counts as a mistake.

Daschle, for his part, failed to count as income the value of a car and driver he received from a New York private-equity firm, InterMedia Advisors, during 2005-2007. He also overstated charitable contributions and understated income from InterMedia, which paid him $1 million a year. Daschle filed amended tax returns last month reporting $128,203 in additional taxes and $11,964 in interest. The revised tax returns were submitted after President Obama announced that he intended to nominate Daschle to be secretary of Health and Human Services.

Geithner’s situation was nonetheless a bigger ethical lapse. As an employee of the International Monetary Fund in 2001 and later years, Geithner was responsible for sending a check to the IRS to cover his own payroll taxes. He didn’t do so. What he did do was submit a request to the IMF for reimbursement of those taxes. And he collected.

According to the Senate Finance Committee, Geithner “filled out, signed and submitted an annual tax-allowance request with the IMF that states, ‘I wish to apply for tax allowance of US federal and state income taxes and the difference between the ‘self-employed’ and ‘employed’ obligation of the US Social Security tax which I will pay on my Fund income.’” In other words, Geithner—now charged with making sure Americans obey the tax laws—was given money by his employer to pay his taxes, but then didn't pay them. Not until, that is, he decided to become Treasury secretary.
Geithner dismissed his actions as “careless mistakes.” Whatever the case, the “mistakes” were not detected until he was a candidate for the top job at Treasury. That’s when he paid, years late, $34,023 in self-employment taxes that he owed and $8,679 in interest, for a total of $42,702.

Tom Harkin, the Iowa senator, was one of only three Democrats disturbed enough to vote against Geithner’s confirmation. As he put it on the Senate floor: “How can Mr. Geithner speak with any credibility and authority as America’s chief tax-enforcement officer?”

Geithner has plenty of company. Hundreds of thousands of other Americans—quite likely several million—also are ignoring or avoiding their payroll-tax obligations. Their ranks have swelled as a result of the government’s outsourcing of contracts for the wars in Iraq and Afghanistan. But contract employees everywhere often are paid through companies operating abroad that do not withhold the taxes deducted from the paychecks of most working Americans. For its part, Congress has made sure that the IRS lacks the resources required to collect those taxes, as well as income taxes.

Beginning with the Reagan revolution in the 1980s, Congress deliberately stymied tax-law enforcement. It refused to authorize adequate funding. It slashed enforcement efforts. It killed effective programs in place since the 1960s, like the Taxpayer Compliance Measurement Program. Under that program, IRS subjected a select number of returns to intensive audits to determine the extent of taxpayer fraud and error so as to better allocate enforcement resources. But in 1995, after three decades, lawmakers finally marshaled enough support to terminate the TCMP audits. It did so by starving the agency for funds. In a related development, when lawmakers forced the canning of thousands of IRS agents, a jubilant Senator Charles E. Grassley, Iowa Republican, said that it would mean fewer “agents looking through your files.” In other words, taxpayers who cheated could continue to do so with impunity—at the expense of law-abiding citizens who paid the taxes they owed.

How bad is it? The giant Swiss bank UBS maintains secret accounts for 19,000 Americans who have failed to report their existence as required by law. Those accounts hold $18 billion.

The Swiss are resisting efforts to force disclosure. Even if the account holders are identified it would mean little. As longtime Washington tax lawyer and analyst Martin Lobel puts it, “nothing much is going to happen.” That’s because the IRS lacks the resources to pursue that many tax cases.

Donald L. Barlett and James B. Steele are contributing editors at Vanity Fair and have been writing about taxes for nearly four decades. Barlett and Steele have won virtually every major national journalism award including two Pulitzer Prizes and two National Magazine Awards. They are the authors of The Great American Tax Dodge, How Spiraling Fraud and Avoidance Are Killing Fairness, Destroying the Income Tax, and Costing You, and six other books.

See also Democracy Now for February 6, 2009:
http://www.democracynow.org/2009/2/6/investigative_duo_jim_steele_and_don
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February 6, 2009

Regulator Says Bailout Fund Is Misleading the Public
http://www.nytimes.com/2009/02/06/business/economy/06tarp.html?_r=1&sq=Bank%20Bailout&st=cse&scp=1&pagewanted=print

By REUTERS
WASHINGTON (Reuters) — Watchdogs monitoring the government’s bank bailout called for an overhaul Thursday, with one accusing those running it of misleading the public, while senators slammed the program as chaotic and poorly managed.
Under the $700 billion program meant to stabilize the financial system, the Treasury Department has so far spent nearly $300 billion to bolster financial institutions and automakers in exchange for preferred shares and warrants.

But in buying those securities, Henry M. Paulson Jr., then the Treasury secretary, misled the public about how it was going to price them, said Elizabeth Warren, a Harvard law professor and head of an oversight panel for the bailout, known as the Troubled Asset Relief Program, or TARP.

“Treasury simply did not do what it said it was doing,” Ms. Warren said at a hearing before the Senate banking committee. Many members of the panel condemned management of the program, which is barely four months old.
The program proceeded “in a chaotic, unorganized and ad hoc manner,” said Daniel K. Akaka, Democrat of Hawaii.
Neil M. Barofsky, another watchdog for the program, told the Senate committee his office was turning to criminal investigations. “That’s going to be a large focus of my office,” he said.

On projections by some analysts that TARP may need more money soon, Senator Evan Bayh, Democrat of Indiana, said, “There will be no additional funding for this program without airtight assurances that it will be better managed.”
The Obama administration plans to unveil a strategy on Monday aimed at reviving the credit markets, helping struggling homeowners and lifting the economy out of recession.

Tighter TARP management is expected to be a part of that package. A preview of that came Wednesday when the White House announced a $500,000 annual cap on executive pay at companies receiving TARP money.
The Bush administration began TARP in response to an alarming slowdown in global capital markets set off by a housing slump that undermined mortgage-backed bonds carried on the books of major financial institutions.

Congress approved the $700 billion program after Mr. Paulson said it would be used to buy broken bonds and clean off banks’ balance sheets. But days after that approval, Mr. Paulson changed the focus to buying preferred shares in banks.
Ms. Warren, head of TARP’s Congressional oversight panel, told the banking committee that after three months on the job, her panel was still not getting enough answers from Treasury. She described the bailout as “an opaque process at best.”
Ms. Warren said she plans to release a report on Friday that calculates Treasury put about $254 billion into financial institutions in 2008, but got only $176 billion in value.

“That’s a shortfall of about $78 billion,” she said, adding that Mr. Paulson “was not entirely candid” in his description of TARP’s bank capital injection program.

Mr. Barofsky, the independent TARP inspector general at Treasury, raised concerns about potential fraud in one of several programs financed by bailout money, the Federal Reserve’s Term Asset-Backed Loan Facility. “Treasury should consider requiring that some baseline fraud prevention standards be imposed,” Mr. Barofsky said in his first report to Congress.
He told the committee the government had collected more than $271 million in dividends from its TARP-financed bank shares and said the department needed a strategy for administering its holdings.

A Treasury spokesman said the department would adopt many of Mr. Barofsky’s recommendations.
Treasury holds $279.2 billion in preferred shares from 319 financial institutions, paying dividends of 5 to 10 percent, according to Mr. Barofsky’s report.

The government also received common stock warrants from 230 institutions, most of which are now out of the money. The largest positions in warrants include the American International Group, Bank of America, Citigroup and General Motors.
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Get back to basics, America

http://www.bakercityherald.com/Letters/Letters-to-the-editor-for-February-3-2009
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Can Spring Be Far Away? I Hope Not. . . .

Birders are spotting tundra swans and white-fronted geese across Oregon this last week. Spring is just around the corner--well almost.

Yellow-headed Blackbird, Celebrating Spring in Baker County
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Convict Bush & Cheney
http://www.afterdowningstreet.org/node/39585