RSA Animate - Crises of Capitalism

The animation/lecture lasts around 11 minutes but it's worth it when you have the time. There are no specific solutions being provided though this professor walks through many of the contributing factors that led to the current and ongoing economic crisis. An honest discussion has not yet started in Washington about this crisis though as the problem continues to drag out, it may still happen. Read the rest of this post...

Teabagger pushes wealthy NY county to brink of financial crisis

Preaching "change" and then failing to deliver isn't just a Democratic problem, apparently. In this case, the Tea Party politician has only been in office for barely one year. Coming soon to Washington, too.

Facing a huge budget deficit when he took office in January, Nassau County Executive Edward P. Mangano did not impose a hiring freeze. He did not stop borrowing to subsidize some of the richest school districts in the country. He did not eliminate the Police Department’s beloved mounted unit.

Instead, Mr. Mangano, a Republican who won one of the first upsets of the Tea Party era, did what he had promised: He cut taxes, adding $40 million to the county’s deficit, which has since reached nearly $350 million.

Now, with its bonds suddenly downgraded and a state oversight agency preparing to seize its checkbook and credit cards, Nassau is on the verge of a full-fledged fiscal crisis.

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Obama to NPR: The solution to debt & deficits is 'Social Security & Medicaid'

Here's President Obama talking with Steve Inskeep of NPR. The interview was posted Friday, December 10, 2010.

About Social Security, Obama said:

INSKEEP: Won't Republicans argue — and, in fact, won't reality argue that any cuts will have to be even deeper because this package that you're pushing for now will mean there's even less government revenue?

OBAMA: Actually, I think that if you talk to economists, both conservative and liberal, what they'll say is the problem is not next year. The problem is, how are we dealing with our medium-term debt and deficit, and how are we dealing with our long-term debt and deficit? And most of that has to do with entitlements, particularly Social Security and Medicaid.

He's coming for it. Obama (and Bowles) want to do what Clinton (and Bowles) wanted to do before Monica stopped him. (Don't believe that click? Try this click. Or this one.)

As soon as the tax cuts blow a hole in the budget, they're going to come for your money. The Social Security Wealth Transfer — "From your pocket to mine, sucker.")

But first things first. Let's see if Congress folds on the tax cuts.

GP

UPDATE: Lawrence O'Donnell has just implied the House will fold. Read the rest of this post...

Tax compromise bill passes crucial hurdle in Senate

Still not understanding why DREAM and DADT weren't tacked on to this compromise. And START, for that matter. We didn't "win" anything by getting the unemployment benefits extended. They're always extended, and the GOP wasn't planning on making its first big action, after the elections, be kicking 2m people off unemployment right before Christmas. So the Republicans didn't do us any favors by giving us those benefits. We did them a favor.

I'm still feeling like my realtor could have brokered a much better deal. (More on today's vote here.) Read the rest of this post...

'If I had to choose sides today, I'd choose the Taliban' - Afghan President Karzai

Wash Post:

As [Karzai] spoke, he grew agitated, then enraged. He told them that he now has three "main enemies" - the Taliban, the United States and the international community.

"If I had to choose sides today, I'd choose the Taliban," he fumed.

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Bloomberg poll: More than 70% want ban on Wall Street bonus

OK, so the US taxpayers saved the egotistical bankers from complete ruin and have bounced back with much stronger personal results compared to the taxpayer retirement plans. What the taxpayers ignore though is that Wall Street provides an enormous benefit to society. And by society, they mean Wall Street society. Who else is there, really? Doesn't the public know that it's expensive sending kids to private schools? Houses in the Hamptons are still not a bargain either so rally 'round and help free the bankers from this obvious attempt at wealth redistribution. It took them years and hundreds of millions of dollars of lobbyist money to redistribute wealth to themselves and now they only want to enjoy life without hassle. Bloomberg:

More than 70 percent of Americans say big bonuses should be banned this year at Wall Street firms that took taxpayer bailouts, a Bloomberg National Poll shows.

An additional one in six favors slapping a 50 percent tax on bonuses exceeding $400,000. Just 7 percent of U.S. adults say bonuses are an appropriate incentive reflecting Wall Street’s return to financial health.

A large majority also want to tax Wall Street profits to reduce the federal budget deficit. A levy on financial services firms is the top choice among more than a dozen deficit-cutting options presented to respondents.

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John Boehner rejects the word 'compromise'

From ThinkProgress:

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Federal judge finds individual mandate in health care law is unconstitutional

Major ruling today in the lawsuit brought by Virginia's Attorney General, Ken Cuccinelli, against the new health care law:

U.S. District Court Judge Henry E. Hudson found that Congress could not order individuals to buy health insurance.

In a 42-page opinion, Hudson said the provision of the law that requires most individuals to get insurance or pay a fine by 2014 is an unprecedented expansion of federal power that cannot be supported by Congress's power to regulate interstate trade.

"Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market," he wrote. "In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I [of the Constitution.]

Hudson is the first judge to rule that the individual mandate is unconstitutional. He said, however, that portions of the law that do not rest on the requirement that individuals obtain insurance are legal and can proceed. Hudson indicated there was no need for him to enjoin the law and halt its implementation, since the mandate does not go into effect until 2014.

This one will be going to the Supreme Court. Read the rest of this post...

Mark Warner believes overregulation is the problem with our economy

Really? Outside of GOP circles and conservative Democrats, few believe this. Yes, if only the US regulated less on Wall Street or Big Oil, all of our problems would be solved. What American CEO hasn't made it clear that excessive regulations and not financial rewards to fire or not hire are the root cause of the employment problem? No, yet another negative phase of the financial crisis never crossed the mind of anyone in business and the excesses of non-regulation of Wall Street is irrelevant. Where do Democrats find people like this?

Our economic recovery remains frustratingly sluggish, unemployment is still unacceptably high, and all of us should be concerned that leading U.S. corporations have remained on the economic sidelines over much of the past year instead of making new investments or hiring additional workers.

One reason often cited for this unwillingness to invest is executives' belief that Washington regulators are stifling fresh investment and discouraging innovation through new rules and requirements.

If Washington expects to partner with the private sector to lead the effort toward economic recovery, we must address the regulatory uncertainty felt by many of our small and large businesses.

Krugman is right that it's best not to even follow the Washington Post. It gets worse by the day and is nothing more than Beltway Bubble group think. Read the rest of this post...

Robert Reich on why the Clinton endorsement of tax deal is off

For those who actually believe that the economy today resembles the early Clinton economy needs their head examined. We are so far away from any economic cycle that can generate 22 million jobs and that's not even close to being a serious debate. Buying into that backwards-looking mindset reminds me again how out of touch the Obama economic team is. It's unthinkable that they can solve any real world problems if they can't even recognize the actual economy that we're in.

Get a grip and please, return back to earth. The bill has arrived for thirty years of bad policy (by Republicans and Democrats, alike) and it won't be paid any time soon.

But the analogy falls apart as soon as you realize Clinton's economy was vastly different from Obama's. The recession Clinton inherited was relatively small, and caused by the Fed raising interest rates too high to ward off inflation. So it could be reversed by the Fed lowering interest rates -- as the Fed did in 1994. By 1995, the so-called "jobless recovery" had morphed into a full-blown jobs recovery. By 1996, at pollster Dick Morris's urging, Clinton could proclaim to the American people "you've never had it so good, and you ain't seen nothing yet."

The Great Recession has been far larger, caused not by the Fed raising interest rates but by the bursting of a giant housing bubble. In 2008, the biggest asset of most middle-class people, upon which they borrowed and that they assumed would be their nest eggs for retirement, collapsed. Housing prices continue to fall in most parts of the country. The Fed has lowered interest rates all it can, and unemployment remains sky high.

Bill Clinton presided over an economic boom engineered by Fed chair Alan Greenspan, who felt confident he could drop interest rates far lower than anyone expected without risking inflation. The result was 4 percent unemployment in many parts of America, as well as the best jobs recovery in history.

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Krugman on the tax cave and why it's not the best option

There is no quick fix and there are no easy answers to fixing the problem. The tax cave will provide a small return compared to other options. But we all know that Washington doesn't do long term or complicated. "Tax cuts" is easier to spit out and repeat, even though the end result is underwhelming. Whoever it is inside the White House that has the misguided belief that we're inches away from turning the corner on this recession ought to pack their bags and leave. Now. Paul Krugman:

The point is that while the deal will cost a lot — adding more to federal debt than the original Obama stimulus — it’s likely to get very little bang for the buck. Tax cuts for the wealthy will barely be spent at all; even middle-class tax cuts won’t add much to spending. And the business tax break will, I believe, do hardly anything to spur investment given the excess capacity businesses already have.

The actual stimulus in the plan comes from the other measures, mainly unemployment benefits and the payroll tax break. And these measures (a) won’t make more than a modest dent in unemployment and (b) will fade out quickly, with the good stuff going away at the end of 2011.

The question, then, is whether a year of modestly better performance is worth $850 billion in additional debt, plus a significantly raised probability that those tax cuts for the rich will become permanent. And I say no.

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Monday Morning Open Thread

Good morning.

Should be quite a week ahead. The Senate is going to take its first vote on the Obama/GOP tax deal later today -- sometime after 2 PM ET. It's a vote to invoke cloture and all indications are that it will pass. On this one, the Senate will move to debate and final passage. Then, it's over to the House. (Can't wait to see what Bernie Sanders has planned for today.)

Once the tax bill is done, the Senate calendar should clear to provide space for other issues. START remains a top priority for the President. There will be a vote on the House-passed DREAM Act and, then, there's the DADT repeal. It's a free-standing bill so only needs an up-or-down vote. Several GOPers besides Susan Collins, including Brown and Murkowski, claim to support repeal. So, the big question is how this plays out. Should be a no-brainer. Our allies will have to file cloture, but we should have the votes needed. Let's see if Collins can deliver. If we start hearing noises about the need for amendments or a lot of time for debate, we'll know that Mitch McConnell has told his caucus that the bill won't pass. Don't forget, McConnell is really calling the shots here, not Collins.

Last Friday, SLDN and several other pro-repeal groups held a rally on Capitol Hill with the message to the Senate: Don't Go home til repeal is done. One of the speakers was 23 year old discharged Marine, Danny Hernandez. He told the crowd that he was ready to serve again -- and that he was ready to die for his country. Meet Danny. He's what this debate is about.
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Palin takes TV roadshow to Haiti

Forget the suffering people of Haiti, because this is all about Palin. When you click through to the article, there's even a photo of her having her hair adjusted before visiting a cholera treatment center. There's a very creepy, outdated (as in 100 years ago) feel to this. She's perfectly comfortable exploiting others misery for her own benefit.

Palin arrived at the invitation of Franklin Graham, a leading evangelical preacher who has drawn criticism for calling Islam a "religion of war" and for saying that Barack Obama has "the seed of Islam" in him.

Haiti, still recovering from the devastating earthquake that killed 220,000 people nearly a year ago, has recently been hit by a cholera epidemic which claimed a further 2,000 lives and is enduring further upheaval over a contested presidential election that has led to violence on the streets of Port-au-Prince and calls in Washington to end US aid to the country.

Palin emerged from one of the refugee camps housing the hundreds of thousands of Haitians who are still without homes after the earthquake, and said: "They are so full of joy. We are so fortunate in America and we are responsible for helping those less fortunate."

Ah yes. I hear the poor locals smile when you hand them a three day old crust of bread. Please. Read the rest of this post...

WikiLeaks: UK may turn over files detailing murder of Northern Ireland civil rights attorney

Remind me again why it's not important that people know about the alleged state involvement in the murder of a civil rights attorney? The Guardian:

MI5 has said that it is prepared to hand over sensitive files on one of the most high-profile murders during the Northern Ireland Troubles carried out by loyalist gunmen working with members of the British security forces.

The offer in the case of the Pat Finucane, the well-known civil rights and defence lawyer murdered in front of his wife and three young children in 1989, is contained in confidential US embassy cables passed to WikiLeaks.

Supporters of Finucane welcomed the revelation of the offer last night as "highly significant" and believe it could pave the way for a fresh inquiry into the killing that would be acceptable to the family.

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California to receive extra $624 million for high speed rail

There are some days when you really have to thank the Republicans for their extremism. LA Times:

The federal government Thursday redirected $624 million in economic stimulus funds from other states to the California high-speed rail project, bringing the total available for building the line to about $5.5 billion.

California was one of 11 states to share in the redistribution of $1.2 billion in high-speed rail money that had been approved for Ohio and Wisconsin.

When the recently elected Republican governors of the two states asked to use the funds for other proposals, U.S. Secretary of Transportation Ray LaHood denied the requests and shifted the money to high-speed rail projects in the other states. California's share was the largest.

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