Krauthammer: Obama Has Republicans Right Where He Wants Them

Pundit and perpetually dour Travelocity Gnome Charles Krauthammer, took to his token WaPo seat today to inform the world that the Compromiser-in-Chief really hornswoggled those waskly Republiwabbits with his captiulation compromise on the Bush tax cuts. A plan so clever that Obama, Democrats, and apparently judging by their reactions, Republicans too, are just too dim to see.

Yup Chuck, that wiley old Kenyan socialist has ‘em right where he wants ‘em now!

According to the Great and Glorious Oz-Hammer, Obama tricked Republicans into what the Wall St. Journal calls, “a second, stealth stimulus package” worth a $1 trillion by agreeing to tax cuts for all and extra money for those not lucky enough to be unemployed corporate titans.

Psst…don’t tell anyone that many economists see the tax cuts for the wealthy as making up the lion’s share of the trillion and providing the least stimulus – unless by stimulus you mean stimulus for yacht and corporate jet makers.

Oh wait! The wealthy already get private jet service as part of their measly compensation packages. Silly me!

Alienating Voters for Fun and Profit
Obama gave up his objection to tax cuts for the rich – before negotiations even started – in exchange for tax cuts for everyone and unemployment money the Republicans didn’t care a whit about anyway – except to the extent that the have nots would’ve been momentarily pissed if they got nothing.

Now here’s the genius of Barack Machiavelli’s plan. Give the Republicans what they really want (tax cuts for the rich) in exchange for letting them off the hook for their most outrageous and politically embarrassing proposals (no middle class cuts and unemployment continuation).

Then, kick the can down the road so that Republicans will be in power and more easily able to strip the tax cuts down to only those for the More Money Than God tax bracket while pummeling Obama with accusations that those budget-busting middle class tax cuts and extended unemployment benefits just ruined the economy. Ruined I say!

If the Republicans gave a crap about their constituents – other than their corporate donors I mean – the unemployment extension shouldn’t have needed to be negotiated. It was a worthless bargaining chip as far as the Republicans were concerned, “Let the little people have their crumbs. Pass the $5,000 per ounce caviar Mr. Halliburton.”

As for middle class taxpayers it’s not such a ‘victory’ either. The deal could raise taxes for 1-in-3 workers. And as usual, the working poor get bupkis. The Obamicans giveth with one hand and taketh away with the other.

Lighting $100 Cigars with $100 Bills
The Bush tax cuts were passed during the period of the inflating bubble. The corporate titans could light $100 cigars with $100 bills worth $200. Middle class folks could buy homes well-beyond their means with money loaned by banks engaged in the world’s largest 3-card monty game. Most everybody, except those losing their jobs to offshoring, was working. And, we were flush enough to finance two wars – creating much of the deficit Obama inherited – “off the budget books”.

There’s an old fable that makes too much sense to possibly be true. To balance a budget you have to have more coming in than you have going out. But when your economy is built with all the stability of a Jenga game on quicksand you won’t be able to do it quickly. The economy took a long time to get so thoroughly and royally hosed.

It’ll take sacrifice and austerity by EVERYONE – yes Robber Barons and your super-citizen corporations, this means you. It also means middle class folks who won’t like to bite the bullet, but guano happens. The poor aren’t generally paying taxes anyway because the tax on zero is, oddly enough, zero.

The truly fiscally responsible way would’ve been to give no tax cuts to anyone. The rich and middle class are where the money is and are best equipped to weather the storm, even if income disparity is as equal as an elephant on the other side of a scale from a squirrel. Not a popular solution, but everyone suffers equally, if not proportionately, and the treasury is that much closer to getting more coming in than going out.

As for the extension of unemployment benefits, pass them independent of any deals. The politicians have shafted these people quite enough already, giving them a break is the least they could do. At least that money will be spent on something useful, like keeping a roof over the unemployed’s heads and food on the table. It’ll cost a little, but not as much as the cuts.

Rich folks, and those who ride their ample coattails, I know it’s tough to forgo that yacht the size of an aircraft carrier, but come on. Dig deep. Get the holiday Christmas spirit. Middle classers, you’ll have to suck it up as you always do. That sucks, but it is the way of capitalism – greed always wins.

The Republicans don’t give a damn what the electorate thinks of them. The Democrats are more disorganized than a herd of feral cats. And Barack…poor, poor Barack…got his feelings hurt because he’s become mono-partisan – that special state of grace where everyone – left, right, and center – thinks you’re an incompetent boob.

No more negotiating. No one ever negotiates anything that’s good for the country and it just depresses the hell out of the rest of us.

Cross posted at The Omnipotent Poobah Speaks!

Tax Cuts: why are average Americans so "blind?"

While I will always believe that the legacy of the Bush Administration has truly destroyed American democracy through their addition of far right-wing Supreme Court Justices Roberts and Alito. Moreover, their right-wing jilted Citizens' United decision has allowed -- and will continue to allow -- far more Republicans to have gained offices in November's past election than should have gained office.

Notwithstanding, it continues to "boggle my mind" how the average American continues to be blind to the Republican Party's consistent neglect and contempt of their needs on the Congress floor in exchange for always voting in favor of the wealthy. This was evident this past summer when ever Republican senator voted against extending unemployment benefits for the hard-working American who lost their job(Olympia Snow may have been the lone exception).

Yes, I would have loved to see tax breaks die for the wealthiest Americans, but I realize the Republican Party ALWAYS chooses party over country, and it may have not been possible.

What would have been really, really nice during Obama's first year in office when he had both Senate (non-filibuster) and House majorities was for him to have brought back the Fairness Doctrine for media. He could have shut-up those big mouths at Fox News and AM radio for good. I really don't know why he didn't do it.

 

 

Non-Voters Were the Majority in 2010, Says New Study

Cross-posted at Project Vote's blog, Voting Matters.

"It is fair to say that 2010 was the year of older, rich people." That's the conclusion of a new research memo from Project Vote, "An Analysis of Who Voted (and Who Didn’t Vote) in the 2010 Election," by Dr. Lorraine Minnite. It finds that wealthier voters and Americans over the age of 65 surged to the polls in 2010, and increased their support for the Republican party, while young voters and minority voters (who strongly favor Democrats) dropped off at higher rates than in 2006.

Two years ago, African-Americans, lower-income Americans, and young Americans all participated in the 2008 presidential election in decisive numbers, making it the most diverse electorate in history. In 2010, however, these historically underrepresented groups were underrepresented again, as they (in common with most Americans) largely stayed home. Non-voters were the majority in 2010, a fact that "throws cold water on any victor’s claims for a mandate."

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Weekly Audit: Depression-Era Inequality, Only Worse

By Zach Carter, TMC MediaWire blogger

A new study by Economist Emmanuel Saez revealed this week that income inequality in the U.S. is more severe today than at any time since World War I, and the current recession is taking its heaviest toll on the worst-off members of our society. As our government rebuilds the financial sector using taxpayers' money, it's important to remember that both financiers and the government are responsible to our communities, not just bank shareholders. If we want to strengthen our country's economic foundation, we need to demand better wages for workers and an end to all kinds of predatory lending.

Saez's new data on income inequality is, as Paul Krugman put it, "truly amazing." Saez, who teaches at the University of California at Berkeley, found that the top 0.01% of U.S. earners had 6% of total U.S. wages, more than double the level in 2000. Earners in the top 10%, meanwhile, took home an astonishing 49.7% of all wages. That gap is larger now than during the Great Depression or the Gilded Age of the Roaring '20s.

"We're seeing Depression-era inequality again--only now it's slightly worse," writes Steve Benen for The Washington Monthly. Benen also notes that this level of inequality is not an inevitable consequence of a market economy: It's an extreme historical aberration. In the U.S., prosperity for much of the 20th Century was shared. But in 2007, at the economic bubble's peak, the wealthy simply got wealthier.

In that context, it is beyond absurd that the government is allowing 8-figure bonuses to be doled out by bailed out banks. Writing for Salon, Robert Reich dissects the policy implications of Citigroup's plans to pay its top executives an average of $10 million this year and award over $100 million to its top trader, a man who literally owns a castle in Germany. Citigroup was one of the most reckless U.S. banks during the housing bubble, a major subprime offender that received $45 billion in direct bailout money, as well as hundreds of billions in federal guarantees. How much is $45 billion? With the median U.S. home price at $174,100, that's the full market price of over 258,000 foreclosed homes. The company says that $10 million a head is necessary to attract and maintain top "talent," which Reich notes is a somewhat misleading term, given recent history. The problem is not just that Citigroup and other Wall Street firms are paying tons of money to a few people, it's that these people are being rewarded for the same kind of activities that got us into this mess to begin with: Risky, highly leveraged securities trading.

"Over the last several years Wall Street has exhibited a truly astonishing lack of talent," Reich says, noting that, "The Street is back to the same, relentlessly untalented tactics that made it lots of money before the meltdown--which also forced taxpayers to bail it out, caused the world economy to melt down, and tens of millions of people to lose big chunks of their life savings."

In truth, Reich argues, most large financial firms in the U.S. are much more like public utility companies than private-sector businesses. Even in good times, they depend on government guarantees and other support systems to function. In bad times, we bail them out. Instead of paying financiers tens of millions of dollars to reinforce a flawed system, Reich argues that we should impose rules that result in salaries similar to the public utilities sector, where top earners are generally restricted to 6-figure incomes.

The American Prospect features two pieces emphasizing problems in the current financial sector. Under a law known as the Community Reinvestment Act (CRA), enacted in 1977 we require banks to make loans in communities where they collect deposits. The loans have to be to dependable borrowers and they have to be relatively inexpensive. The law works very well--institutions covered by it made only a tiny fraction of the high-interest subprime loans that brought down the financial sector, as National Community Reinvestment Coalition President John Taylor notes for the Prospect. But CRA only applies to actual banks. You know, the places where you deposit your paychecks. CRA does not apply to subcompanies owned by the same corporation, and it does not apply to giant Wall Street securities firms like Bear Stearns and Goldman Sachs. Taylor says we need to expand CRA to cover these other big players in the financial world.

Why? As Alyssa Katz details in a piece for the Prospect funded by The Nation Institute, many Wall Street firms are bidding on foreclosed properties and selling them at rip-off rates to low-income borrowers.

But as Mary Kane notes for The Washington Independent, banks have also devised several methods of making money without making a loan. By charging tremendous fees on borrowers for minor infractions, banks generate billions of dollars without producing anything of social value. One of the worst forms of abuse, Kane writes, comes in the form of overdraft fees. When you withdraw too much money from your bank account, the bank fronts you the money, and then charges you a fee for this "protection." The trick is, banks almost never tell you that this has occurred, and often play around with the timing of your charges and deposits to maximize the fees they collect. Banks are on track to collect $38.5 billion in such fees this year alone. The worst part is, the fees come from the poorest customers--rich people don't overdraw their bank accounts, because they have tons of money.

In the case of credit cards, banks routinely slap borrowers with outrageous fees and interest rate hikes when the borrowers are making payments on time. Over the years, banks have targeted younger and younger credit card customers, as Adam Waxman notes for WireTap. After years of declining wages for all but the wealthiest citizens, consumers have been turning to pricey plastic to finance basic necessities.

Sadly, corporate America does not seem very focused on helping workers establish their financial independence. The Real News talks with Richard Wolff, an economist with the New School who emphasizes that, while worker productivity has jumped in recent months, wages have not made the corresponding increases. Quarterly productivity numbers tend to jump around a lot, but the trend of not compensating workers for improved efficiency has been around for years.

In a consumer-driven economy, major problems can't be fixed by giving lots of money to a few people, especially if those few people are already rich. To support broad, meaningful economic growth, we need to tailor our policies that empower those on the lower rungs of the economic ladder. And when we bail out giant corporations with taxpayer money, we need to make sure those companies arrange their business to improve the lot of taxpayers.

This post features links to the best independent, progressive reporting about the economy and is free to reprint. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.

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Taxes, Taxes, Taxes

     What is it about politicians and rich person that makes them think they don't have to pay taxes? Not only do they not have to pay taxes but they also do not expect that to be an impediment to continuing to work in the government. In many of their minds all it takes is a sincere public apology and a plausible deniability of culpability and its back to business as usual. While many will argue that the tax problems of some of President Obama's appointee's are mild compared to some other President's recent picks, but is that really the issue? President Obama campaigned on bringing change to Washington that requires actually changing things for that to be a reality.

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