Category Archives: The Economy

April 13, 2011 · 9:51 pm

Poll: Budget deal wins support, but Americans wary

Interesting numbers from USA Today/Gallup Poll…

In summary, the “public” is okay with the budget deal from last week, but most don’t want anymore cuts to Domestic spending…

They also want to rescind the Bush Tax Cuts for the Rich…

And no one wants to cut Medicare, Medicaid or Social Security…

I hope President Obama is willing to go to the mat for those programs…

I’m not yet convinced he will…

In the public’s view, so far so good.

By more than 2-to-1, 62%-25%, those polled say they approve of the deal, and few see it as a partisan victory. Three of four say it was a victory either for neither side (56%) or for both sides (20%).

There is less consensus on what to do next, though, and little encouragement for policymakers such as House Budget Chairman Paul Ryan who are urging bold action to control the exploding costs of Medicare.

“Everybody wants to go to heaven, but nobody wants to die,” says Gary Jacobson, a political scientist at the University of California, San Diego. “People want a balanced budget … but they really don’t like the cuts that are involved.”

He questions whether it will be possible for the White House and Congress to strike a grand bargain that calls on both to take some political hits. “I’m not sure there’s enough mutual trust possible in Washington these days for that kind of deal to be made.”

In the poll, those surveyed:

• Are split over whether there should be significant additional cuts in domestic spending: 47% say no, 45% yes. On this issue, there is a yawning divide between the parties. Democrats by 2-to-1 oppose more cuts; Republicans by 2-to-1 support them.

• Overwhelmingly oppose making major changes to Medicare. By 2-to-1, they support minor changes or none at all to control costs, rather than major changes or a complete overhaul. Even a third of Republicans say the government should not try to control the costs of Medicare.

• Favor imposing higher taxes on families with household incomes of $250,000 and above, as Obama has endorsed: 59% support the idea, 37% oppose it.

Still, the divide on the issue could make Republicans less likely to compromise on it. While 78% of Democrats favor higher taxes on top earners, 60% of Republicans oppose it.

via Poll: Budget deal wins support, but Americans wary – USATODAY.com.

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April 12, 2011 · 10:28 pm

In the Next Round of Budget Talks, Big Cuts for Health Research Are Coming | The Nation

This Congress- and Washington in general- has no foresight….

Their current budget cutting mania is leading us down the path to becoming a Third World Country.

We have fallen behind the rest of the world in so many areas and they seem intent on pushing us back even more…

From The Nation:

But the real damage will come after the proposed cuts take effect. The NIH is comprised of twenty-seven institutes and centers with particular focuses, including the National Cancer Institute (NCI) and National Heart Lung and Blood Institute; each will decide how to manage their individual cuts. The NCI will prioritize funding the same level of new grants (they currently fund 14 percent of new grant applications), but will have to cut funding from cancer centers. Others will have to choose between new and existing grants. When ongoing grants aren’t renewed, work may simply stop. “University departments will do their best to support promising research during a dry spell,” explains Riggins, “and there are a few foundations that provide bridge grants, but these resources aren’t abundant either.”

In the long term, funding scarcity will make it hard to attract top research scientists. Many have already left for more stable careers in industry. And US labs will continue to lose people not just to other fields but to other countries as well. Kelly Ruggles, a microbiologist at Columbia, says, “It used to be that people would come here to get trained in the sciences. Now, people are leaving for better opportunities in Singapore or China. There’s just more science than money right now.”

Of course, this is a difficult funding environment, but the proposed NIH cuts are based in part on ignorance. Legislators who understand the NIH tend to give it full-voiced support. When retired Representative John Edward Porter chaired the appropriations subcommittee that oversees the NIH, he held hearings with each of the twenty-seven institutes so members could hear directly from the researchers why they needed money and what they were doing with it. When, during the mid-’90s, the House Budget Committee proposed cuts to the NIH budget, Porter brought a troupe of Nobel laureates, esteemed scientists and business leaders in to meet with then-speaker Gingrich. The result? Instead of cutting the budget, Congress doubled the NIH budget over five years, because they saw that the funding was working. “I certainly learned that the money going to the NIH was money that was being tremendously well spent,” recalls Porter, “making a difference in the lives of human beings all over the planet.”

via In the Next Round of Budget Talks, Big Cuts for Health Research Are Coming | The Nation.

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April 12, 2011 · 9:53 pm

Budget debate was fought entirely on the GOP’s turf

Greg Sargent, at The Washington Post, makes some good points here…

First of all, it’s all about the 2012 Elections, not about what is best for the Country or what the Democrats core beliefs may be…

We know the Republicans have no core beliefs…

Sadly, given what happened in 2010, this approach might be necessary to deal with an uneducated, stressed out, results oriented electorate.  Obama’s strategy may be to try to protect the American electorate from themselves…

This might be smart, but it’s also very scary….

And it sacrifices good policy on the altar of political necessity….

And Americans have no one to blame but themselves…

President Obama’s advisers apparently believe that his best route to reeelection is to acknowledge the need for more fiscal discipline, while picking a fight with the GOP over the need for targeted government investment in our future and painting the GOP’s cut-at-all-costs vision as out of the mainstream. In fairness, his advisers, as Paul Krugman noted recently, may very well be right about this.

But it’s still worth appreciating how far to the right the debate has shifted, in part because of Democratic acquiescence. The idea that government spending should be a job-creation tool in our arsenal was entirely marginalized, to the point that it was simply not part of the discussions; meanwhile, the insane conservative demand for $100 billion in cuts was treated as a kind of outer right-wing boundary of legitimate discourse. The result: Giving Boehner more than he originally asked for in cuts became the stuff of middle ground compromise.

via Budget debate was fought entirely on the GOP’s turf – The Plum Line – The Washington Post.

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April 11, 2011 · 11:04 pm

Danville Workers’ Complaints Surround IKEA’s U.S. Factory

Extremely interesting article about the IKEA factory in Danville, VA, the city I escaped from, I mean I was born in…

Thanks to Tim Flowers for making me aware of this article in the Los Angeles Times…

Funny….I don’t recall seeing it mentioned in the Danville Register and Bee…

“It’s ironic that Ikea looks on the U.S. and Danville the way that most people in the U.S. look at Mexico,” Street said.

The Swedwood factory is situated on the outskirts of Danville, in the midst of rolling tobacco country, just north of the North Carolina border.

For most of the last century the town of 45,000 relied on textiles and tobacco for jobs. Today the riverfront is lined with empty red brick warehouses and crumbling mills. With the unemployment rate high — currently at 10.1% — the city has put muscle behind attracting new companies, including Ikea.

“They’ve definitely given jobs to people that desperately needed them here,” city manager Joe King said.

Swedwood says it chose Danville to cut shipping costs to its U.S. stores. The plant has been run mostly by American managers, along with some from Sweden.

via Ikea: Workers’ complaints surround Ikea’s U.S. factory – latimes.com.

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April 8, 2011 · 11:41 pm

Tax Cuts for the Rich on the Backs of the Middle Class; or, Paul Ryan Has Balls: Matt Taibbi

Great article in Rolling Stone from Matt Taibbi.

I love is snarky tone and accurate facts…

Here is a brief excerpt and I encourage you to click the link to read the rest of it…..

Never mind that each time the Republicans actually come into power, federal deficit spending explodes and these whippersnappers somehow never get around to touching Social Security, Medicare or Medicaid. The key is that for the many years before that moment of truth, before these buffoons actually get a chance to put their money where their lipless little mouths are, they will stomp their feet and scream about how entitlements are bringing us to the edge of apocalypse.

The reason for this is always the same: the Republicans, quite smartly, recognize that there is great political hay to be made in the appearance of deficit reduction, and that white middle class voters will respond with overwhelming enthusiasm to any call for reductions in the “welfare state,” a term which said voters will instantly associate with black welfare moms and Mexicans sneaking over the border to visit American emergency rooms.

The problem, of course, is that to actually make significant cuts in what is left of the “welfare state,” one has to cut Medicare and Medicaid, programs overwhelmingly patronized by white people, and particularly white seniors. So when the time comes to actually pull the trigger on the proposed reductions, the whippersnappers are quietly removed from the stage and life goes on as usual, i.e. with massive deficit spending on defense, upper-class tax cuts, bailouts, corporate subsidies, and big handouts to Pharma and the insurance industries.

via Tax Cuts for the Rich on the Backs of the Middle Class; or, Paul Ryan Has Balls | Rolling Stone Politics | Taibblog | Matt Taibbi on Politics and the Economy.

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April 8, 2011 · 4:31 pm

GOP Budget Proposal: Ludicrous and Cruel

Excellent analysis of Paul Ryan’s GOP Budget proposal by Nobel Prize winning economist Paul Krugman in today’s New York Times:

And then there’s the much-ballyhooed proposal to abolish Medicare and replace it with vouchers that can be used to buy private health insurance.

The point here is that privatizing Medicare does nothing, in itself, to limit health-care costs. In fact, it almost surely raises them by adding a layer of middlemen. Yet the House plan assumes that we can cut health-care spending as a percentage of G.D.P. despite an aging population and rising health care costs.

The only way that can happen is if those vouchers are worth much less than the cost of health insurance. In fact, the Congressional Budget Office estimates that by 2030 the value of a voucher would cover only a third of the cost of a private insurance policy equivalent to Medicare as we know it. So the plan would deprive many and probably most seniors of adequate health care.

And that neither should nor will happen. Mr. Ryan and his colleagues can write down whatever numbers they like, but seniors vote. And when they find that their health-care vouchers are grossly inadequate, they’ll demand and get bigger vouchers — wiping out the plan’s supposed savings.

In short, this plan isn’t remotely serious; on the contrary, it’s ludicrous.

And it’s also cruel.

In the past, Mr. Ryan has talked a good game about taking care of those in need. But as the Center on Budget and Policy Priorities points out, of the $4 trillion in spending cuts he proposes over the next decade, two-thirds involve cutting programs that mainly serve low-income Americans. And by repealing last year’s health reform, without any replacement, the plan would also deprive an estimated 34 million nonelderly Americans of health insurance.

So the pundits who praised this proposal when it was released were punked. The G.O.P. budget plan isn’t a good-faith effort to put America’s fiscal house in order; it’s voodoo economics, with an extra dose of fantasy, and a large helping of mean-spiritedness.

via Ludicrous and Cruel – NYTimes.com.

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April 7, 2011 · 7:56 pm

How Glenn Beck Cost Fox News More Than $40 million | Media Matters for America

It’s always about money…

And Glenn Beck wasn’t pulling in the advertising dollars because companies weren’t willing to advertise on his show…

This was due to the boycott caused by his lunatic performances…

How much has the advertising exodus cost Fox News? In September 2009, ColorForChange, which was instrumental in launching the Beck ad boycott, published its analysis. Based on advertising rates it concluded that Glenn Beck was bringing in approximately $600,000 less per-week (or approximately $2.4 million per-month), than it was before the boycott began. Keep in mind, that’s when 50 or 60 advertisers had jumped ship. Today, that number hovers between 300-400.

Using that $2.4 million per month estimate, since the fall of 2009, it’s possible the ad-starved Beck show booked nearly $43 million less than it would have if it weren’t facing a boycott. $43 million.

It’s true that throughout the boycott, the official word from Fox News has been that the advertising exodus wasn’t a big deal and that they were just moving advertisers around to other programs and that everything was just fine on the sales side atGlenn Beck. All of which made no sense.

The television industry is built around supply and demand. Glenn Beck has supply in the form of roughly 20 minutes of advertising time sold each episode. And it wants to build demand. Usually, healthy ratings drive that demand since advertisers want to reach the masses. But if suddenly hundreds of advertisers raise their hand and announce they’d be happy to spend money with Fox News, but not on Glenn Beck, then the show’s demand plummets, but the supply –the 20 minutes of advertising inventory—remains the same.

Bottom line? The ad rates go down, even if Glenn Beck remains the third highest rated show in cable news.

via Ratings, Revenues And A Painful Lesson: How Glenn Beck Cost Fox News More Than $40 million | Media Matters for America.

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April 6, 2011 · 7:30 pm

10 of the Biggest Corporate Tax Cheats In America | AlterNet

I really don’t mind paying my fair share of taxes, but I find it hard to believe it’s fair that I pay more than these Corporations….

If you or I were running a small business and we kept one set of books showing how much money we were making and a second set for the IRS that painted a picture of an enterprise on the brink of bankruptcy, we’d end up behind bars.

But that’s standard operating procedure for corporate America. In fact, public corporations have to do it — the law requires that they keep one set of books for their shareholders, and another for the IRS. As tax journalist David Cay Johnston explained, “Many corporations routinely tell investors they incur millions in corporate income taxes, while the financial records they give the IRS show they owe nothing or are due refunds.”

In the records kept by the IRS, corporations cook the books “by using tax shelters, offsetting income with losses from years ago, and employing countless other devices that make them look like paupers to the IRS but money machines to investors.”We got a peek into this process last week, when the New York Times revealed that multinational giant GE is not only avoiding corporate income taxes this year, but is taking a “tax benefit” of $3 billion. According to the Times, the company’s “extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.”

But of course, GE is not alone. Here are 10 other big corporate tax evaders (with an assist from an MSNBC analysis of leading corporate tax-dodgers). Keep in mind that neither political party ever actually cuts spending significantly, so every dollar these companies avoid paying is one that will come out of the paychecks of working America.

via 10 of the Biggest Corporate Tax Cheats In America | AlterNet.

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April 6, 2011 · 8:38 am

A Tale of Two Visions: Killing Medicare, Budget Deficits and the Government Shutdown

As usual Robert Reich is dead on in his assessment of the situation in Washington.

Obama is losing the message war to the GOP and Democrats are afraid to stand up for basic Democratic principles- that we are all in this together and are socially obligated to each do their fair share and help each other when age or misfortune falls….

This used to be called Christian Duty- a term which I prefer not to use in a multi-cultural, multi-religious society.  I also hesitate to use this term because Christianity is now viewed as a hard and unforgiving religion by so many thanks to the Religious Right and their role in GOP Politics…

Instead,  I prefer to think of this as Societal or Social Duty.  It is our duty to contribute to the overall good of the nation- not to make this a a dog eat dog world/country  where the motto is “I’ve got mine, screw you.”  That is the GOP vision…

The Democrats need to call this out and fight for the middle class, the elderly, the poor, minority and women’s rights, children and those who work hard but pay more taxes than the idle rich…

Reich calls it out in the Huffington Post:

 

Obama must show America that the basic choice is between two fundamental views of this nation. Either we’re all in this together, or we’re a bunch of individuals who happen to live within these borders and are mainly on their own.

This has been the basic choice all along — when the Founding Fathers wrote the Constitution, in the Civil War, when we went through World War I and World War II and the Great Depression in between, during the Civil Rights movement and beyond.

The president needs to remind us that as members of the same society we have obligations to one another — that the wealthiest among us must pay their fair share of taxes, that any of us who loses our jobs or homes or gets terribly sick can count on the rest of us, and that we have collective obligations to our elderly, our children, and the rest of the planet.

This is why we have government. And anyone who wants to shut it down or cut it down because they say we can’t afford it any longer is plain wrong. We are the richest nation in the world, richer than we’ve ever been. We can afford to remain a society whose members are in it together.

via Robert Reich: Paul Ryan’s Plan, the Coming Shutdown, and What’s Really at Stake.

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April 5, 2011 · 8:54 pm

CBO: GOP Budget Would Increase Debt, Then Stick It To Medicare Patients

These are the facts…

Now let’s see how the Republicans spin them as they try to kill Medicare…

They usually use their specially created data from the Conservative “Think” Tank, The Heritage Foundation that’s about as credible as Fox News…

However, unlike Faux News and The Heritage Foundation, The CBO is non-partisan, generally accurate and widely respected…

The nonpartisan Congressional Budget Office’s initial analysis of the House GOP budget released today by Rep. Paul Ryan (R-WI) is filled with nuggets of bad news for Republicans.

In addition to acknowledging that seniors, disabled and elderly people would be hit with much higher out-of-pocket health care costs, the CBO finds that by the end of the 10-year budget window, public debt will actually be higher than it would be if the GOP just did nothing.

Under the so-called “extended baseline scenario” — a.k.a. projections based on current law — debt held by the public will grow to 67 percent of GDP by 2022. Under the GOP plan, public debt would reach 70 percent of GDP in the same window.

In other words, the spending cuts Republicans would realize in the first 10 years would be outpaced by deficit increasing tax-cuts, which Ryan also proposes. After that, debt projections under the plan improve decade-by-decade relative to current law. That’s because 2022 would mark the beginning of the Medicare privatization plan. That’s when, CBO finds, “most elderly people would pay more for their health care than they would pay under the current Medicare system.”

If the current Medicare system were allowed to continue, CBO found that an average 65-year-old beneficiary’s costs would be only 25 percent of what it’d be in the individual private insurance market. Under the GOP plan, those costs would jump to 68 percent.

In plain English, “the gradually increasing number of Medicare beneficiaries participating in the new premium support program [the GOP’s Medicare privatization plan] would bear a much larger share of their health care costs than they would under the current program.”

via CBO: GOP Budget Would Increase Debt, Then Stick It To Medicare Patients | TPMDC.

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