Pulitzer Prize-winner David Cay Johnston provides the data confirming what we all knew was true, but many were afraid to say out loud:
Total income was $2.74 trillion less during the eight Bush years than if incomes had stayed at 2000 levels.That much additional income would have more than made up for the lack of demand that keeps us mired in the Great Recession. That would mean no need for a stimulus, although it would not have affected the last administration’s interfering with market capitalism by bailing out irresponsible Wall Streeters instead of letting the market determine their fortunes.
In only two years was total income up, but even when those years are combined they exceed the declines in only one of the other six years…
Had incomes stayed at 2000 levels, the average taxpayer would have earned almost $21,000 more over those eight years. That’s almost $50 per week.
These numbers make Democrats’ decision not to even hold a vote on the Bush tax cuts all the more appalling. We know they aren’t good economic policy, and we know that most Americans want at least part of those tax cuts repealed. We also know that Democrats aren’t refusing to hold a vote because they want to let the tax cuts naturally expire – we know they are planning to potentially ram through an extension of those tax cuts for the long haul.
As these numbers show, that would be a huge mistake.
This post originally appeared on Open Left.
Paul noted these very numbers late last week, but they are worth showing again because they are so disturbing.
Yes, I realize it’s hard to digest those numbers without gagging. But they are the numbers. And they do prove that the so-called “Bush tax cuts for the middle class” give a disproportionate amount of benefits not to the middle class, but to very wealthy people.
That, of course, means that the debate over whether to extend all of the Bush tax cuts or just the so-called “Bush tax cuts for the middle class” is, unto itself, tilted far to the right. What we’re really debating is whether to do what Republicans want and extend all of the Bush tax cuts for the wealthy, or do what some Democrats want and just extend some of the Bush tax cuts for the wealthy.
Thus, this debate is yet another example of how narrow – and rigged – our policy discourse really is, and how on some core economic issues, the parties are much closer on policy than they (their media organs and even some of their professional activist groups) would have us believe.
It is also another example of how the debate’s rightward tilt doesn’t reflect the kind of debate the non-Beltway public is ready to have. Indeed, polls consistently show majorities favor getting rid of some or all of the Bush tax cuts, meaning public opinion is not forcing the debate to be merely between  getting rid of none or some. But that is the debate – because that debate makes sure that whatever happens, Big Money wins.
This post first appeared on Open Left.
Recounting the findings of  a new study by the Keystone Research Center, the Denver Business Journal reports that “the unemployment rate would approach 16 percent nationally — more than 6 percentage points higher than the current jobless rate — if not for the federal stimulus program.” This comports with data released earlier by the Congressional Budget Office and with the opinions of both liberal and ultra-conservative economists.
Such consensus should end the debate about whether or not Congress should pass another stimulus bill. It should – the only debate should be over the shape of that stimulus bill, and even that shouldn’t be up for debate, though, unfortunately, it most certainly is.
From both liberal and conservative economists – as well as from history – we know that direct government spending on things like infrastructure and education investment is a good way to prime the economy in the short term and the long term. So is spending on stuff like unemployment benefits and food stamps, which puts money into the hands of those who will spend it immediately on necessities. And, of course, we know from polls that spending on such priorities is far more politically/electorally popular than devoting more money to corporate tax cuts or to deficit reduction.
We also know from the Bush era – and from 20th century history in general – that tax cuts are far less effective at spurring economic development than direct spending. That’s why this Washington Post story is so troubling:
Under mounting pressure to intensify his focus on the economy ahead of the midterm elections, President Obama will call for a $100 billion business tax credit this week…The business proposal – what one aide called a key part of a limited economic package – would increase and permanently extend research and development tax credits for businesses…
Sure, it’s great that the president today is talking about spending $50 billion on infrastructure. As evidenced by this very diary, I obviously support such new spending. But when the paltry sum of $50 billion is put up against double that amount in corporate tax cuts, it seems like the administration’s priorities are all screwed up. If the job-creating weakness of the first stimulus bill was it’s willingness to devote roughly 40 percent of its funds to less-effective tax cuts and just 60 percent to employment-boosting spending, then a similar weakness will even more amplified in new stimulus proposals that, by the administration’s initial figures, may end up devoting double to tax cuts what it devotes to infrastructure spending.
After all, there are two fundamental problems with the tax cuts being proposed: 1) In general, tax cuts have not proven to be a very good short- or long-term job creator or economic engine and 2) In specific, as Citizens for Tax Justice has long reported, the R&D tax credit has become something of a corporate boondoggle, especially in light of the far more effective direct government spending on R&D. Even the conservative Wall Street Journal has lambasted this particular tax credit as blatant corporate welfare, noting that, according to the Government Accountability Office, 70 percent of it goes not to small businesses in need, but to already-wealthy multinational firms with receipts of $1 billion or more. Think big drug companies, as just one example.
But maybe that’s the unfortunate point. Maybe this is yet another example of the administration looking first at how a policy can satisfy Big Money, and then at the (alleged) residual benefits to average American workers – rather than looking at it in the opposite way. If that’s the case, it’s tragic – because the success of the first stimulus’s spending gives the administration strong ammunition to put forward a far more progressive proposal, one that would be far more politically popular for Democrats in advance of the 2010 election.
This post first appeared on Open Left.
I never thought we’d see a Republican Communist – and certainly not one who is the nominee for U.S. Senate in a major swing-state. But as the Wisconsin State Journal shows, in these strange time, even that seeming oxymoron now exists:
U.S. Senate candidate Ron Johnson was on the Wisconsin Radio Network Monday, chatting about jobs and the economy. But after the host asked him about his free market philosophy, Johnson ended up kind-of praising the current business climate China instead…Johnson veered onto the topic of China, and how casino entrepreneur Steve Wynn has already started building businesses in Macau.
“He’s also creating resorts in Macau in China, communist China. And his point is, the level of uncertainty, the climate for business investment is far more certain in communist China then it is in the U.S. here,” Johnson said. “We’ve created such a high level of uncertainty in this economy because, quite honestly because of the agenda that Senator Feingold represents.”
This is pretty explicit: Johnson is praising a communist Chinese government and its state central planning for (allegedly) creating laudable certainty in that nation’s economy – all while criticizing America’s economy for not being equally communist, state-planned and stable.
If you think I’m the only one who caught this, think again. As the Wisconsin State Journal notes, the host of the radio program “sounded a bit baffled” by Johnson:
“Ron…but Macau is in China. China is a socialist-planned economy,” he said. “The level of uncertainty…isn’t the level of uncertainty part of a side-effect, if you will, of our, of our democracy?”
The host, of course, is exactly right. In a republican democracy, where the people (via their governmental representatives) have some shred of control over economic policies, things can change from time to time. That’s the whole friggin’ point of democracy, after all – to give citizens some power over their own lives, society and economy.
By contrast, in an authortarian communism like China, citizens have little or no control over economic policies. While that may foster “certainty” for corporations in the form of no significant labor, environmental or human rights laws, it deprives citizens a lot of other things that makes a nation vibrant and admirable (like, say, a minimally acceptable standard of living).
But that’s really the Republican vision when you strip it down to its core. The GOP, like the Chinese government, is about the fusing a corporate form of communism with total authoritarianism. They genuinely believe it would be better if corporations could use government power to get whatever they want in the name of “certainty” – and have no annoying elections or democratic institutions get in the way on behalf of the public.
We can thank Wisconsin Republican Senate nominee Ron Johnson for at least being honest about his party’s extremist vision. While most Americans probably don’t see Chinese communism as the way forward, Republicans clearly do – and we can thank them, at minimum, for letting us know how they see the world.
This post originally written for OpenLeft.com
Some readers of my blog posts readers of my column and listeners to my daily radio show have asked me why I spend a lot of my time pushing, critiquing, criticizing and generally talking about Democrats and the progressive movement and not Republicans and the conservative/Tea Party movement these days. My answer is fairly simple: Democrats and (thus theoretically) the progressive movement are in the policy driver’s seat right now, and Republicans and the conservative/Tea Party movement are effectively locked out of power, at least at the national level.
Pretending this isn’t true creates a reality that cannot exist without such manufactured illusion. Indeed, beyond the filibuster (which is circumventable in many cases), the only way Republicans and the conservative/Tea Party movement can wield power is through perception. The more the media – and especially the progressive media – pretends Republicans and the conservative/Tea Party movement is powerful, the more chance that wholly manufactured perception can become reality.
Unfortunately, as Alternet’s Alisa Valdes notes, that illusion is being manufactured: READ FULL POST
Illinois’ U.S. Senate Democratic primary is coming up in less than a week, and it poses a potentially enormous problem for the Democratic Party, in Illinois and therefore nationally. That “therefore” is important: Because President Obama is from Illinois, and because Republicans have invested so much time and resources trying to nationalize the concept of the corrupt “Chicago politician,” whoever ends up the Democratic nominee for Obama’s old seat will likely be made by the GOP into a face of the Democratic Party as a whole.
That’s why the candidacy of Illinois Treasurer Alexi Giannoulias is so problematic. Holding a slight lead in the polls against other Democratic challengers, he has become a poster child for everything that is wrong with the American economy – everything that the Republican Party’s right-wing populism desperately needs to find traction. Here’s what I mean:
Broadway Bank, the troubled Chicago lender owned by the family of Illinois Treasurer and U.S. Senate candidate Alexi Giannoulias, has entered into a consent order with banking regulators requiring it to raise tens of millions in capital, stop paying dividends to the family without regulatory approval, and hire an outside party to evaluate the bank’s senior management.
The Jan. 26 consent order with the Federal Deposit Insurance Corp. and the Illinois Division of Banking comes less than a week before Mr. Giannoulias — Broadway’s chief lender and then vice-president from 2002 to 2006 — must face voters in the Democratic primary for the Senate seat previously held by President Barack Obama.
He’s faced criticism, principally from former city Inspector General David Hoffman, who’s running against him, for his past role at the bank and the $70 million in dividends the family took out of the bank in 2007 and 2008 as the real estate crisis was becoming apparent.
