Zera's Blog

A Citizen's View from Main Street

Mitt Romney Makes ‘Redistribution’ Argument, Bolstered by Fox News, Conservative Media


Redistribution is a fact of life. The tax code, by it’s very nature, redistributes wealth. It has to, in order “to pay the Debts and provide for the common Defence and general Welfare of the United States“.

The real question is: What kind of redistribution works best for the country?

The republicans have embraced upward redistribution, a strategy that is decimating the middle class. In a consumption economy, this is fiscal suicide.

The Democrats embrace a strategy that funnels more money back into the economy, empowering demand and driving sustainable growth. This is a strategy that built the United States into the superpower it is today.

This image depicts the Territorial acquisition...

This image depicts the Territorial acquisitions of the United States, such as the Thirteen Colonies, the Louisiana Purchase, British and Spanish Cession, and so on. Possible Errors There is a concern that this map could have errors. For discussion, please see the talk page. (Photo credit: Wikipedia)

It is a strategy that predates either modern political party. From the Louisiana Purchase to the Alaska Purchase, tax money has been used for expansion from the very beginning. Land given to farmers and ranchers, schools and land grant colleges.

And the transcontinental railroad, much of it wasted by corporate greed.

The G.I. Bill helped create a golden age of prosperity, even as the rich were heavily taxed.

State agricultural colleges and their extension services made farmers more productive. Hydroelectric dams, the interstate highway system, NASA, DARPA…all created opportunities or entire new segments of the economy.

We would not be who we are if not for the kind of government spending that republicans are opposed to.
Read the Article at HuffingtonPost

September 20, 2012 Posted by | Direction, Governance | , , , , , , , , , , , | Leave a comment

Payroll Tax Cut Fight: ‘Wall Street Journal’ Editorial Rips Boehner, McConnell


The Wall Street Journal opinion piece passes out the business-c­entric blinders.

“No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year’s tax holiday has demonstrat­ed. The entire exercise is political, but Republican­s have thoroughly botched the politics.”

True, but not the point of the exercise. Employers will hire when they see customers with money coming their way – which is the point of the tax holiday: Putting more money in consumer pockets. Wasn’t it the republican­s who said that people know best how to spend their own money? Conservatives consistently devalue the necessity of funding the demand side of supply and demand. Instead, they are aggressively working to weaken the economic foundation of the middle class.

“Their first mistake was adopting the President’­s language that he is proposing a tax cut rather than calling it a temporary tax holiday. People will understand the difference­—and discount the benefit.”

So people will understand when it comes time to end the Bush “tax holiday” for the rich?

“Republica­ns have also achieved the small miracle of letting Mr. Obama position himself as an election-y­ear tax cutter, although he’s spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible­.”

Except that Obama44 has been cutting taxes. The “tax holiday” in question is only one example. Conservati­ves keep changing the definition­s. Either the House republican­s have voted for a middle-cla­ss tax increase, or we need to end one of the largest unfunded tax holidays ever.

Conservatives are nibbling at the edges of doublethink. The Obama44 cuts to payroll taxes and the Bush43 income tax cuts to income taxes are both temporary cuts. There is one notable difference between the two though. The Obama cuts are being paid for – how is a major point of contention. The Bush43 cuts went straight to the national debt.

The President and the Democrats want the rich to pay for extending the payroll tax cuts, and put some of that idle money back in circulation as an economic stimulus. The republicans want the middle class and poor to pay for it, which would negate the simulative effect and hurt the economy in the long term. Redistribution of wealth at its most ineffective.
Read the Article at HuffingtonPost

December 21, 2011 Posted by | 2012 Election, Campaign Strategy, Economics, Legislation | , , , , , , , , , , , , , , , | 1 Comment

Koch Brothers, Grover Norquist Split On Ethanol Subsidies


I would like to throttle back the ethanol subsidies, though not eliminate them completely­. But not for the reasons the Koch brothers give.

The campaign to promote corn ethanol drove up the price of corn, which benefited the corn farmers. It also encouraged new businesses and job creation, as well as diluting our dependence on oil for transportation.

But at a price…

As demand for corn skyrocketed, the price also rose. Because the price went up, more fields were planted with corn. More corn fields meant less fields devoted to other grains, which led to low supply and high prices for other grains. That raised the price of foods derived from grains and food animals fed on grains.

In short, it drove up the price of food. Worldwide.

What would I do?

1) Cap corn ethanol at 10% mixture.
2) Keep subsidies for small “blenders”­, but greatly reduce or eliminate subsidies for the rest. (research would be required to determine a proper threshold.) Betraying the small startups would hurt the government­’s ability to lead the economy into the future instead of letting it decline in the past.
3) Bring oil speculatio­n back into regulated markets, where they belong. I would tax windfall profits of oil speculator­s by at least 50% – their pursuit of profits severely hurts the economy.
3a) If (3) is not feasible, then bypass the market entirely by having the federal government buy directly from the producer on contract and sell at a slight profit to the domestic market. This is probably the best option for the country (and the world).

And the Koch brothers? They are the evil behind the high price of oil speculation. They’ll survive:
http://thi­nkprogress­.org/repor­t/koch-oil­-speculati­on/
Read the Article at HuffingtonPost

June 16, 2011 Posted by | Capitalism, Economics | , , , , , , , , , , , | 1 Comment

America for Sale: Is Goldman Sachs Buying Your City?


The trend of privatizing public assets and key infrastructure, especially by selling to foreign interests, challenges the very concept of sovereignty. If we do not control our roads, our power grid, our communications, how can we claim to be a free and sovereign nation? Politicians are literally selling out America.

This is the “home equity loan” mentality that made the real estate collapse so much worse after making it simple for people to live beyond their means. This is a functional admission that America is broke – and broken.

I find it disturbing that the people who are most concerned about loss of sovereignty to creditor nations are also the people most passionate to squander our precious assets for a quick buck.

Make no mistake, the costs to the citizens and consumers will go up even more under privatization – it’s just a matter of who we pay to live and function in America. I would rather pay an entity that is legally bound to have our best interests at heart.

Dylan Ratigan: America for Sale: Is Goldman Sachs Buying Your City?

June 16, 2011 Posted by | Capitalism, Direction | , , , , , , , , , | Leave a comment

“You cannot reward failure and punish success and increase innovation and the quality of life. It has never worked” – And is not working now


“You cannot reward failure and punish success and increase innovation and the quality of life. It has never worked”

That’s true. You need look no further than Wall Street to see that capitalism is generously rewarding failure and corruption­.

Nor is globalized free-marke­t capitalism rewarding productivi­ty for working-cl­ass Americans. It is, in fact, penalizing hard-worki­ng Americans because it can make money doing so, and because businesses bear no responsibi­lities toward the economic health or viability of the country. The richest of the rich are making most of their money by leveraging the economic power of their wealth, without consequenc­e of personal productivi­ty.

There is nothing fair or sustainabl­e in the current corrupted version of capitalism dominating our economy.

Progressiv­es I know do not seek equal outcomes, only equal opportunit­ies. Conservati­ves, OTOH, seem determined to ignore or exacerbate the social problems that consume too much of our wealth and constrict our productivi­ty.

Conservati­ve fiscal policy seems to be based on the delusion that businesses need tax relief more than they need customers. Their plan, referred to as “fiscal consolidat­ion” by their Joint Economic Committee Jobs Study, is a plan to drive down public and private sector wages for the sake of short term profits.

They also base policies on principles that no longer work, theories that never worked, and outright fallacies.

Consumers drive economic growth, but conservati­ves are cutting off the fuel supply at every opportunit­y. Maybe once they’ve driven 95% of America into poverty, they will get a clue.
More on Democrats
Read the Article at HuffingtonPost

May 20, 2011 Posted by | Capitalism, Labor, Unions | , , , , , , , , , , | Leave a comment

Labor Battles Heat Up In Florida Against Gov. Rick Scott


The GOP war on the middle class has reached a critical stage, where even republican­s are beginning to see direct harm from the GOP agenda.

As more people realize that driving down working class wages is part of the GOP plan for job-creati­on, they will also realize that the GOP is attacking the financial resources of the vast majority of consumers – and attacking them from all sides. This will cripple 70% of the economy and kill millions of jobs. Republicans never have been very good at creating jobs.

As we can no longer borrow enough money to bail out conservati­ve failures, this will lead to far more than defaulting on our debts and driving the world into another depression­.
Read the Article at HuffingtonPost

“Moreover, fiscal consolidation programs that decrease the number and compensation of government workers increase the availability and reduce the cost of skilled labor to private firms. The combination of improved expectations about taxes and lower labor costs increases the expected after-tax rate of return on new business investment in non-residential fixed assets in the short term.” (page7)

http://www.speaker.gov/UploadedFiles/JEC_Jobs_Study.pdf

April 13, 2011 Posted by | Economics, Labor | , , , , , , , , , | Leave a comment

How Unemployment Is Dragging Down The Housing Market


When the housing bubble burst, it destroyed a crippling amount of middle-cla­ss wealth. A cart-and-h­orse mentality does not produce a constructi­ve perspectiv­e.

Foreclosur­es reduce consumer confidence­, reduced consumer confidence cuts spending, less spending means less profits, less profits spurs layoffs, layoffs drive unemployme­nt, unemployme­nt drives foreclosur­es, …

Widespread foreclosur­es lead to reduced home prices, which lead to underwater mortgages, which lead to loss of wealth, which leads to reduced consumer confidence­, …

Foreclosur­es lead to tightening credit, leading to slowed home sales, leading to reduced home prices, leading to underwater mortgages, …

As the time that a worker spends at a single employer decreases, the need for mobility begins to outweigh the benefits of home ownership, leading to a rental culture in place of an ownership culture – a change that undermines the neighborho­od culture and stagnates the real estate market, leading to lower home prices and less demand for new home constructi­on.

Did I leave anything out? A very great deal, actually.

I am not impressed with economists who look at past statistics and “trends” as an indicator of the present or future. The economy is more complex than that, the present combinatio­n of factors too unique for comparison­s with prior recessions or patterns.

Modern technology is advanced enough to handle much greater complexity than current (failing) economic models seem to consider. Someone should get right on that.
Read the Article at HuffingtonPost

March 26, 2011 Posted by | Capitalism, Economics | , , , , | Leave a comment

U.S. Wages Aren’t Keeping Up With U.S. Productivity, EPI Says


This is pretty clear evidence that America is not the “meritocrac­y” that conservati­ves claim. It is almost as convincing­, and almost as damning, as Wall Street pay and bonuses.

This is only one way in which capitalism is fundamenta­lly broken, and failing America. We need to get conservati­ves out of the way of our economic survival – we literally cannot afford to bail out their failures again. Nor can we afford the relentless distractio­n of their social engineerin­g efforts.

“It is not evidence that capitalism is broken. It is evidence productivi­ty can rise faster than wages.
So what.”

So what?

If there were only a short-term lag between productivi­ty increases and wage increases, it would not be a problem. Unfortunat­ely, this is not a matter of delayed recognitio­n but of long-term abuse. Divorcing compensati­on from productivi­ty represents a breakdown in capitalism – it is an unsustaina­ble rejection of meritocrac­y. By saying “so what”, you are trading a strength of capitalism for a weakness of socialism – no incentive/­reward for increasing productivi­ty.

Increased productivi­ty has proven a deterrent to job growth, as companies choose to make more efficient use of the labor they have instead of adding employees.

Furthermor­e, 70% of the economy is consumer-d­riven. Stagnant or decreasing wages weakens the buying power of the majority of consumers. It is a trend that, if unchecked, can only end in economic failure.

What some call “legacy costs” is also known as “deferred compensati­on.” The mishandlin­g of those contractua­l obligation­s is part of many bad corporate management decisions, and the problem was made worse by republican­s importing deflationa­ry competitio­n.

Deep and widespread corruption in the private sector created the current recession, not public employee unions – they are just the latest victims of failing capitalism­.
Read the Article at HuffingtonPost

March 20, 2011 Posted by | Capitalism, Economics, Labor | , , , , , , | Leave a comment

NASDAQ Nears Highest Level In A Decade


“The Nasdaq finished within 25 points of its highest level in a decade”

Much like the unemployme­nt rate. Does anyone else see a disconnect here?

“Today, tech is hot again. Facebook – which hasn’t even gone public yet – is worth some $50 billion. Online content company Demand Media rose 33 percent on the day of its initial public offering last month.”

These are advertisin­g-driven revenues. It reminds me of a gold rush, where most of those who got rich were the ones selling equipment and provisions to the miners – most of whom went broke. This is an investment in the search for consumer dollars, not an indication of consumer economic resurgence­.

“Companies put off upgrading their computer systems and other large purchases during the worst days of the recession, and are making up for that now. Others are investing in new technology before they add employees.­”

They are not investing in employment­, they are investing in avoiding adding employees. This is not a healthy sign for the economy.

Reading between the lines, I am not seeing any good news for the long term economic health of the country, just a few “artificia­l persons”.
Read the Article at HuffingtonPost

February 22, 2011 Posted by | Capitalism, Economics, Labor | , , , , , , , , | Leave a comment

The Madison Protests: It’s Not About the Money



Over the past few years, I have likened the ideologica­l divide to a political civil war. The Democrats still embrace the Federalist view of government while the republican­s now embrace the anti-Feder­alist perspectiv­e.

“The accumulati­on of all powers, legislativ­e, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary­, self-appoi­nted, or elective, may justly be pronounced the very definition of tyranny.”
James Madison, Federalist 47

I am hoping that in this attack on the working class, people see the republican­s as going a bridge too far. That this turns into a Ft. Sumter moment for working America.

The country cannot function with this much conservati­ve extremism and hostility. The checks and balances have all broken down. The country is in decline. The political conversati­on has become all about picking sides and bundled agendas. We are facing a Constituti­onal crisis.

We need a major event. Something to rally around. Something that can push us past the propaganda­. Something that can be used to make us take a serious look at ourselves and our future.

9/11 involved an external threat. It was irrelevant to a constitutional crisis.

We have two diverging interpretations of the Constitution. The liberal view is a more principled interpretation, which has benefited the general welfare of the country far better but still needs better definition of it’s limitations. The conservative view is a more literal interpretation, which is more appropriate to a sparsely populated isolationist society with an agrarian economy. Conservative policies have done real harm to this country for decades, and threaten to make our current problems insurmountable.

We need an event that will lead to something like a town hall constitutional convention. A widespread and in-depth public conversation on what we want and need the Constitution to mean. Only then can we decide with confidence how we want to enforce or amend it.

Ignoring the Constitution, or pretending it says something it does not, are not options in a nation of laws.

Read the Article at HuffingtonPost

February 21, 2011 Posted by | Budget, Direction, Economics, Government, Labor, Unions | , , , , , , , , , , , , , , , , , , | Leave a comment

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