Will Obama find his inner FDR?

As a follow up to my follow up, here comes the Monday Krugman making the point again about raising the tax rate on the big dollars earned (and only those dollars — that can't be repeated enough).

His column, nicely titled The Old Enemies, points out that corporate CEOs (aka, our betters) are very very angry that Obama is planning to return the top rates for personal taxes back to Clinton–era levels. (For a handy chart of those levels, click here. For an explanation of that chart, a merge of Krugman's research and my markup, click here.)

And because those men and women (our betters) don't want their personal taxes to go up, they're using the power of the corporations they run to contribute to Republicans. Krugman:

These are extraordinary numbers given the normal tendency of corporate money to flow to the party in power. Corporate America, however, really, truly hates the current administration. Wall Street, for example, is in “a state of bitter, seething, hysterical fury” toward the president, writes John Heilemann of New York magazine. What’s going on?

One answer is taxes — not so much on corporations themselves as on the people who run them. The Obama administration plans to raise tax rates on upper brackets back to Clinton-era levels. Furthermore, health reform will in part be paid for with surtaxes on high-income individuals. All this will amount to a significant financial hit to C.E.O.’s, investment bankers and other masters of the universe. (my emphases)

Krugman's main point is pretty clear, but I want to emphasis his side point — Because their personal taxes will go up (not the corporation's taxes, their personal taxes), CEOs are using the political power of the corps they run to protect them — personally.

In other words, the corporation serves the CEO, not the other way around. And in Mr. Robert's Neighborhood, the government will serve the corporation in achieving that goal.

And that puts CEOs, as a class, at the top of a very large pyramid — basically the whole nation, folks. And I do mean "as a class." Our betters indeed.

Let's hope Mr. Obama is successful. It's the only way out of this mess.

Gaius Read the rest of this post...

Text of 'Don't Ask, Don't Tell' repeal legislation

I've gotten a copy of the DADT repeal legislation that the White House endorsed today. It's posted on the gay blog, with some more details. Read the rest of this post...

The top marginal tax rate

In a recent article, I presented some of the basics about Social Security and some of the history around it. The article attempted to make four major points plus a bonus idea. In brief:

1. You don't contribute to your own retirement. Your money goes to your parents. Your kid's money goes to you.

2. You already "fixed" Social Security in 1983, and paid for it in higher payroll taxes.

3. Reagan used that earlier "fix" to hide much of his massive deficit.

4. The Trust Fund has a lot of money. The real goal of the current "fix" is protect the budget, not Social Security.

BONUS. Reagan created the Gordon Gekko era by removing the disincentive that kept CEOs from looting their own companies.

In this post, I want to expand the final point above, the Bonus point. Paul Krugman conveniently posted this image twice this weekend, and added some comments. His initial point:

Basically, US postwar economic history falls into two parts: an era of high taxes on the rich and extensive regulation, during which living standards experienced extraordinary growth; and an era of low taxes on the rich and deregulation, during which living standards for most Americans rose fitfully at best. [emphasis mine]

Here's my annotated version of his graph:

The red line is Krugman's graph of the top marginal tax rate. (Note that this is not the tax rate on all dollars; it's the rate on the last dollars only, when the last dollar is in the stratosphere. No one ever paid 90% on all dollars earned.)

The blue line is Krugman's log-scaled median family income. As Krugman notes and I pointed out in my own article, that's a bit misleading, since by the 1980s two incomes were often used to get this result. The great rise in median income from 1948 to 1970 was a rise in one-income families.

The green lines and text are mine. My comments:

1. Reagan took the top rate (again, the rate only the very rich, like CEOs paid on their last dollars earned) into the cellar. Corporate productivity climbed, but salaries for you and me stayed flat — actually fell, since in the 80s, two incomes were needed to produce this uninspiring result.

2. Krugman won't make the causal point, but I will. Starting in roughly 1980, corporations made a ton of money that they weren't paying out in wages. Where to put those extra dollars? Well, there were only other two choices — plow them back into the company (what used to happen), or pay them out in exec compensation. With the top marginal rate now cut almost in half, exec compensation was the obvious choice. The incentives almost insisted on it.

Look again at the post-war boom. The top marginal rate was the great disincentive that kept CEOs from pocketing the profit. This allowed profits to go to higher salaries for everyone and real growth for the companies. Why swipe the second $20 million in salary if that $20m goes back to the gov't? (Again, only the second $20 million, or whatever, was taxed at the top marginal rate.)

3. After Reagan massacred the top rate, everything that followed is tweakage. Clinton made things marginally better — note the slight increase in top tax rate AND the slight increase in family income. Bush II brought the top rate back down and killed off Clinton's small gain in income.

Krugman sums up:

The basic point [ . . . ] is that the US economy did very well with tax rates and levels of regulation (and strong unions) that, according to modern mythology, should have been crippling. That’s why conservatives have invented an alternative history in which it never happened.

Larry Beinhart makes the same point, by the way, in this HuffPost article (h/t Thom Hartmann).

Gaius Read the rest of this post...

Levin, Lieberman, Murphy ask White House for 'official views' on DADT repeal proposal

Just posted this at AMERICAblog Gay. The three key lawmakers pushing for the repeal of Don't Ask, Don't Tell have asked the White House to weigh in on their proposal. This should result in an official statement from the Obama administration. Votes were going to occur later this week on the House floor and in the Senate Armed Services Committee anyway.

Letter to Obama asking for "official views" on DADT repeal Read the rest of this post...

Oil well cement problems prevalent in offshore drilling

It's a good thing Obama decided to open up offshore drilling. By the way, exactly how many votes for the climate change legislation were won over by that move? AP IMPACT:

The tricky process of sealing an offshore oil well with cement — suspected as a major contributor to the Gulf of Mexico disaster — has failed dozens of times in the past, according to an Associated Press investigation.

Yet federal regulators give drillers a free hand in this crucial safety step — another example of lax regulation regarding events leading up to the April 20 explosion on the Deepwater Horizon oil rig.

Federal regulators don't regulate what type of cement is used, leaving it up to oil and gas companies. The drillers are urged to simply follow guidelines of the American Petroleum Institute, an industry trade group.

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Environmental waivers continue since Obama's moratorium on permits

Once again, Big Oil let's everyone know who is calling the shots. Let's change the name to the United States of Big Oil and get it over.

In the days since President Obama announced a moratorium on permits for drilling new offshore oil wells and a halt to a controversial type of environmental waiver that was given to the Deepwater Horizon rig, at least seven new permits for various types of drilling and five environmental waivers have been granted, according to records.

The records also indicate that since the April 20 explosion on the rig, federal regulators have granted at least 19 environmental waivers for gulf drilling projects and at least 17 drilling permits, most of which were for types of work like that on the Deepwater Horizon shortly before it exploded, pouring a ceaseless current of oil into the Gulf of Mexico.

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Palin accuses Obama of deep ties to Big Oil

No, not a joke. She was serious or at least pretended to be serious. File this under the "whatever they accuse you of doing, that's what they have already done" file. Obama's response has been awful but for any Republican and Sarah Palin specifically to attack Obama over ties to Big Oil is laughable.

Speaking on " Fox News Sunday," the former Alaska governor said she remained a "big supporter" of oil drilling but believed "these oil companies have got to be held accountable."

Pointing to what she termed the White House's relationship with "the oil companies who have so supported President Obama in his campaign and are supportive of him now," Palin questioned whether "there's any connection there to President Obama taking so doggone long to get in there, to dive in there, and grasp the complexity and the potential tragedy that we are seeing here in the Gulf of Mexico."

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Steele 'can't condemn' Rand Paul's view that the Civil Rights Act shouldn't have stopped businesses from banning blacks

I'll bet Michael Steele wouldn't be so equivocal if he were black. From ThinkProgress:

STEELE: That’s a direct quote, and it’s a philosophical position held by a lot of libertarians, which Rand Paul is. They have a very, very strong view about the limitations of government intrusion into the private sector. That is a philosophical perspective. We have had a lot of members go to the United States Senate with a lot of different philosophies, but when they get to the body, how they work to move the country forward matters. [...]

TAPPER: But do you condemn that view?

STEELE: I can’t condemn a person’s view. That’s like, you know, you believe something and I’m going to say, well, you know, I’m going to condemn your view of it. It’s the people of Kentucky will judge whether or not that’s a view that they would like to send–

TAPPER: Are you comfortable with that?

STEELE: I am not comfortable with a lot of things, but it doesn’t matter what I’m comfortable with and not comfortable with. I don’t vote in that election. The people of Kentucky will. As a national chairman, I’m here to say that our party will move forward in fighting for the civil rights and liberties of the American people, especially minorities in this country, and we’re going to do everything in our power to make sure that everyone who’s going to come to the United States Congress or go to state capitals with a Republican label are in that fight with us.

TAPPER: It sounds like you’re not comfortable with it.

STEELE: I just said I wasn’t comfortable.

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Former Sanford staffer/blogger had affair with GOP governor candidate in SC

A rather juicy story. Outgoing governor had an affair, wife divorces him. Former wife now supports new GOP gubernatorial candidate, who we now know also had an affair - with a staffer of the adulterous governor - and who distanced herself from the governor because of HIS affair. Oh, and it even involves Sarah Palin too!

Haley, who is married and has two children, has yet to comment on Folks' announcement. About an hour after Folks announced the affair, Rep. Haley canceled an interview with WIS News 10 that had been previously scheduled for Monday morning and had been confirmed by the campaign before the FITSNews page went live.

Haley recently rocketed to the front of the polls in the Republican race for governor after being publicly endorsed by Republican icon Sarah Palin and former first lady Jenny Sanford. Ms. Sanford, who divorced her husband after the governor announced an extramarital affair of his own, has not commented on the news of Haley's alleged affair.

Haley was once a close political ally of Governor Sanford, but somewhat distanced herself from him after Sanford's affair came to light, saying the governor had "fallen short" in his behavior.

Here's the blogger's admission of the affair. Read the rest of this post...

Obama administration pushes on BP as talk of criminal prosecution

It's about time, really. Again, it's great that the Obama administration is starting to talk tough, but it's been a month. The time wasted accepting BP's word and the additional environmental destruction is hard to fathom. On issue after issue, Obama concedes much too much ground to companies like this and somehow believes that they will act in the best interest of anyone besides themselves. Didn't the Wall Street bailout teach them anything? How about the health care story when Big Pharma promised to help? This team needs to wake up and quit being so gullible. Even now, how much faith should anyone have in this team for the next crisis? How long can they keep riding with training wheels?

The crisis management of this administration remains pathetic and is more of the same as opposed to change. How many more times will the Obama administration have complete faith in these businesses to do what's in the best interest of the US as opposed to their bloated salaries and bonus schemes? How naive is this team?

BP, whose shares have dropped from £6.50 to £5.17 since the disaster began, is now blocking the EPA from publishing the reasons it has given for refusing to stop using Corexit, citing commercial confidentiality. The agency is therefore "evaluating all legal options".

Company executives may soon have to worry about the prospect of criminal charges. The White House says Justice Department officials are also in the region following President Obama's announcement on Saturday of a formal inquiry, which he said could lead to possible prosecutions.

Critics have repeatedly accused BP of trying to keep the public in the dark about the full scale of the disaster, and the steps it took to minimise risk. When the spill first occurred, on 20 April, the firm said only 1,000 barrels a day of oil were leaking into the Gulf. However, it was later forced to revise that figure upwards to 5,000.

The firm was also reluctant to allow the public to see underwater videos of the gushing well. When it eventually relented to political pressure to stream live footage on its website, its server crashed, prompting a Democratic member of the House of Representatives to comment that BP had "lost all credibility".

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Governor Bobby Jindal threatens legal action for more government intervention

These Republicans make me laugh. And here I thought all government was evil and all links had to be cut so business can be unleashed from the shackles of government tyranny. And threats of legal action? Isn't that what liberals do? Doesn't that drive up costs? Which is it, Bobby? Is government evil or can it be used as a force for good? Sounds like he's your run of the mill fraud and opportunist:

Louisiana state and local officials continued to hammer BP and the federal agencies responding to the Gulf of Mexico oil spill on Sunday, repeatedly threatening to “take matters into our own hands” if the response fell short.

At a news conference at a marina here, Gov. Bobby Jindal recited a timeline of his requests to BP and the Coast Guard for containment boom, skimmers and other supplies, saying that the resources were still far from adequate weeks later.

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Monday Morning Open Thread

Good morning.

This is the a very, very big week in the effort to repeal Don't Ask, Don't Tell. The House of Representatives should vote on repeal language as an amendment to the 2011 Defense authorization bill. Rep. Patrick Murphy is leading the effort in the House. The Senate Armed Services Committee will be marking up its version of that authorization bill and will vote to include the repeal language. Senator Carl Levin, Chairman of Armed Services, and Senator Lieberman, are the key players on the Committee.

The White House has been silent and on the sidelines about on what's going on -- despite Obama's promise in the State of the Union to finally end DADT this year. But, Secretary Gates sent a letter to the Hill on April 30th stating that he doesn't want a repeal this year. That's the stated position of the administration. Yet, Congress is moving ahead anyway. The President is meeting with Secretary Gates today at 4:30 PM.

If you want DADT repealed, call your members of Congress today. Servicembers United has a launched a "Give 'em hell" campaign to get calls to the Hill. Servicemembers Legal Defense Network (SLDN) also launched an action alert last week. Hill offices really need to hear from our side. Too many members of Congress can be spineless, so help give them a spine. Call your Senators and House member. The main switchboard for the Capitol is 202-224-3121. As SLDN's Aubrey Sarvis told Kerry Eleveld:

“This is our ‘all hands on deck’ moment.”

Make the calls. At this point, it matters.

Apparently, the big news isn't that oil continues to gush into the Gulf of Mexico and there seems to be no real plan to stop it. It's an unprecedented ecological disaster, yet the response isn't meeting the magnitude of the crisis. No, the big news is that a member of the British royal family has done something scandalous. The TODAY Show is agog about it and I suspect we'll see this story all over cable news today. Who cares? Really.

Okay, busy week ahead. Make your calls (yes, even if you're members are on our side, call them. The other side is burning up the phone lines.) Read the rest of this post...

Eyjafjallajökull is settling down

But everyone is still holding their breath on the much larger neighbor, Katla. Historically, when Eyjafjallajökull blows, so does Katla. Air travel still sounds questionable and is likely to stay in this state for months to come.

There has been a marked drop in the volcanic activity in Iceland that has disrupted flights across Europe for more than a month, and observers say the volcano "appears to be dormant".

Icelandic scientists said that their latest readings at Eyjafjallajökull found little eruption activity, although they warned it was too early to say it was completely over.

Heat camera footage from early indicated that the temperature inside the crater had dropped to 100C, meaning the volcano is now producing steam rather than magma and ash, according to the status report issued by the Icelandic Met Office and Institute of Earth Sciences, University of Iceland.

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Champs Elysées transformed into country farm

French farmers organized a massive event on the Champs Elysées yesterday that will continue today, during the long weekend holiday. I generally avoid that area at all costs because it's overpriced, sterile and is a magnet for crime. It's been quite a hit and has drawn large crowds. French farms still have a small, family farm feel compared to the massive, corporate owned farms of the US but it's changing. More from The Guardian:

By bringing in 8,000 plots of earth and 150,000 plants to the city and installing them, amid sheep and cattle, along three-quarters of a mile of the thoroughfare, struggling farmers are attempting to highlight an aspect of French life which they believe is too often overlooked by Paris.

In the ravages of a crisis which has seen production costs soar and product prices fall, representatives of the agricultural sector say farmers are being brought to their knees.

But William Villeneuve, president of the young farmers' union, insisted the greening of the Champs Elysées was more a celebration than a protest.

"We are not here to bemoan our plight," he said. "We are here to promote our trade." The farmers wanted to make French consumers reflect on "what they have on their plates" and how it got there, he added.

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