Home > Cande = Conjecture & Exaggeration, Fande = Fact & Evidence, Original Thought, The Economy > FAH-Q Harvard University Economics Department

FAH-Q Harvard University Economics Department

FAH-Q = For All to Hear & Question. ; )

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Following the thinking of a New York Times Op-Ed by Harvard University professor of economics, Robert J. Barro, who flogs the dead horse of a proven wrongheaded economic theory, called “Trickle-down” economics…

Here’s!… Jeffrey Miron!

* Jeffrey Miron is the Director of Undergraduate Studies in the economics department at Harvard University. Mr. Miron is also a fellow at the Cato Institute, and the author of the book, Libertarianism A to Z.

source: http://finance.yahoo.com/blogs/daily-ticker/harvard-jeffrey-miron-blames-anti-business-democrats-lack-171746551.html?sec=topStories&pos=8&asset=&ccode=

According to the report from The Daily Ticker, the only solutions Jeffrey Miron offers in order to create jobs are (1) “lower corporate taxes” (2) reduce spending on infrastructure projects, such as roads and bridges and…

(3)  

“‘The anti-business atmosphere in the United States – the dislike of capitalism, the soak the rich attitude that a lot of Democrats seem to be embracing these days; that is the major impediment to businesses wanting to do more investment, do more hiring,’ Miron declares.” That’s according to The Daily Ticker.

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Here’s the Fande:

(1) Lowering corporate taxes does not necessarily lead to job creation. “Trickle-down” economics did not work to benefit the majority of Americans when Ronald Reagan tried it in the 1980s and “Trickle-down” did not work to benefit the majority of Americans when George W. Bush tried it with his Bush Tax Cuts in 2001 and 2003. What the majority of Americans got were multiple recessions and stagnant wages.

(2) Spending on upkeep and maintenance of our roads and bridges provides jobs that provide safety for our travels. We don’t want another interstate highway bridge to collapse, like the one in Minnesota that killed 13 people and injured 45 others (this was during George W. Bush’s presidency). We, as a country, also need to fund inspections of roads and bridges after construction is complete. To reiterate: Spending on upkeep and maintenance of our roads and bridges provides jobs that provide safety for our travels.

source: http://articles.cnn.com/2008-11-14/us/bridge.collapse_1_gusset-plates-bridge-collapse-bridge-designs?_s=PM:US

(3) This is just gibberish from Jeffrey Miron:

“The anti-business atmosphere in the United States – the dislike of capitalism, the soak the rich attitude that a lot of Democrats seem to be embracing these days; that is the major impediment to businesses wanting to do more investment, do more hiring.”

* All we are talking about doing is readjusting tax levels to when Clinton was President and everybody was flush with $Cash$. It’s not soaking the rich. It’s having the Superwealthy pay their fair share. Because while the average American’s wages were stagnant for the past decade, the Superwealthy top 1-2% increased their share of wealth. That’s for real! We need tax revenue in order to invest in our schools, hospitals, roads, bridges, and on and on.

** Also, U.S. corporations are sitting on a record $2 Trillion cash-on-hand, but are not using those record profits to hire more employees. Instead, corporations are squeezing more productivity out of their downsized labor force – more hours for less pay.

*** Jeffrey Miron does not propose a single workable solution for creating jobs. Let me repeat that, a member of Harvard University’s department of economics does not propose a single workable solution for creating jobs.

FAH-Q Jeffrey Miron!

http://www.economics.harvard.edu/faculty/miron

http://www.cato.org/people/jeffrey-miron  

http://jeffreymiron.com/the-book/

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Read more: https://fandecande.wordpress.com/2011/09/11/fallacies-of-logic-from-harvard-university-professor-of-economics-robert-j-barro/

Fallacies of Logic from Harvard University Professor of Economics, Robert J. Barro

September 11, 2011

 
Nothing Is Sacred when Getting It Right. ; )

http://www.economics.harvard.edu/faculty/barro/bio

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From the Op-Ed written by Professor Barro and published in The New York Times, Sunday, September 11, 2011:

http://www.nytimes.com/2011/09/11/opinion/sunday/how-to-really-save-the-economy.html

EXCERPTS:

“….We could get more revenue and improve economic efficiency by abolishing the corporate income tax and relying instead on a VAT….introducing a tax on consumer spending, like the value-added tax (or VAT) common in other rich countries; and abolishing federal corporate taxes and estate taxes..”

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Of course, being a Harvard University Professor of Economics, Mr. Barro would know that Consumer Spending makes up roughly 70 percent of the United States’ economy. His idea is to Shift the Burden to the Consumer, thereby discouraging the majority of the U.S. economy.

* Remember, U.S corporations provide a paltry (approximately) 20 percent of U.S. jobs. In fact, small businesses that are not corporations generate the majority of U.S. jobs. So eliminating the corporate tax would help a small privileged slice of American employers. Also, remember that U.S corporations are sitting on a record $2 Trillion cash-on-hand and at the same time are deciding not to hire.

Mr. Barro’s other ideas also teeter on rickety support beams of incoherent logic. He often alludes to dogma – assertion without proof – such as Tax Cuts being a cure-all for every economic ailment. He speaks in code, but I will break it down for you.

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EXCERPTS:

“Today’s priority has to be austerity, not stimulus….fiscal discipline has to start now….I propose a consumption tax…and elimination of the corporate income tax.”

Code for: “Consumers pay more, corporations pay less.”

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* It does not have to be that way just because Mr. Barro writes it. He is making assertions, but where is he going with these assertions?

EXCERPTS:

“…investment by businesses and households.

What drives investment? Stable expectations of a sound economic environment, including the long-run path of tax rates, regulations and so on. And employment is akin to investment in that hiring decisions take into account the long-run economic climate.“

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First of all, “the long-run path of tax rates” is Code for: “Continue the Bush Tax Cuts.” Secondly, the Bush Tax Cuts mainly benefited the Superwealthy and resulted in nearly $2 Trillion of lost revenue for our roads, bridges, schools, hospitals, and on and on. Thirdly, and most importantly, there is no causality correlation between tax rates and employment, as Warren Buffett pointed out in his New York Times Op-Ed (read more: https://fandecande.wordpress.com/?s=warren+buffett).

Mr. Burro is peddling the same quack-economic theories of “Trickle-down” economics. The idea is that lower taxes and lower regulation allow investment and growth in companies, which, as the theory goes, benefits investors, pensions and employees. But in reality “trickle-down” did not work: the rich got richer and the rest of us got stagnant wages and multiple recessions. Ronald Reagan tried “trickle-down” in the 1980s and, even though it did not benefit the majority of Americans the first time, George W. Bush tried “trickle-down” economics again in the 2000s–Bush Tax Cuts for the Superwealthy in 2001 and 2003.

Without sufficient tax revenues, how do we, as a country, invest in our roads, bridges, schools, hospitals, and on and on? Corporations need to start paying their fair share. Reminder: most corporations do not pay any taxes.

Most Of Corporate America NOT PAYING TAXES…

Follow the link to find sources, such as the Associated Press, the Wall Street Journal, and CBS News. 

http://academic.udayton.edu/clarakim/inequality/articles/6-economic/corporate_tax_evasion.htm

EXCERPTS:

“Two-thirds [66 percent] of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress [the study by the Government Accountability Office]….

Over 8 in 10 corporations have tax havens.”

However, Mr. Barro omits the fact that most corporations do not pay taxes in the next excerpt from today’s Op-Ed in The New York Times.
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“In 2009-10, taxes on corporate profits averaged 1.4 percent of G.D.P. and 8.6 percent of total federal receipts. Even from 2000 to 2008, when corporations were more profitable, these taxes averaged only 1.9 percent of G.D.P. and 10.3 percent of federal receipts. If we could get past the political fallout, we could get more revenue and improve economic efficiency by abolishing the corporate income tax and relying instead on a VAT.”

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Mr. Barro is blinded by his own sophistry. Concerning his assertion that a value-added tax on consumer spending would be the best solution, he writes “I see no reasonable alternative.” How about readjusting tax levels to the Clinton years when everybody was flush with $Cash$? That’s a reasonable alternative: have the corporations and the Superwealthy pay their fair share of taxes, which they have not been doing.

* If corporations and the Superwealthy pay their fair share, we can increase tax revenues, which we need in order to invest in our roads, bridges, schools, hospitals, and on and on.

Then Mr. Barro goes after America’s Pension: Social Security. He recommends “increasing ages of eligibility,” meaning Americans would be getting less of the money they paid into the system for the majority of their lives. Again: How about readjusting tax levels to the Clinton years when everybody was flush with $Cash$? That’s a reasonable alternative: have the corporations and the Superwealthy pay their fair share of taxes, which they have not been doing.

Mr. Barro compliments Presidents Reagan and Clinton as “the two presidential heroes of the American economy since World War II.” However, he fails to mention that Ronald Reagan’s use of “trickle-down” economics left U.S. with record deficits.

Hammering home the square peg into the round hole, Mr. Barro envisions “a Republican president far more committed to the principles of free markets and limited government than Mr. Bush ever was.” It is a perversion of thinking if Mr. Barro means to cause more economic destruction than the Bush administration. Because the Bush Securities and Exchange Commission allowed “self-regulation” by the Wall Street banks concerning the buying and selling of Subprime-mortgage-backed securities. How much more “free markets and limited government” do you want to go? 

Mr. Barro is talking crazy talk, or writing it, rather. At the end of his Op-Ed he writes “I had a dream that Mr. Obama and Congress enacted this fiscal reform package — triggering a surge in the stock market and a boom in investment and G.D.P. — and that he was re-elected.”

Then he cleverly contorts the story into a piece of pro-corporate propaganda:

“This dream could become reality if our leader were Ronald Reagan or Bill Clinton — the two presidential heroes of the American economy since World War II — but Mr. Obama is another story. To become market-friendly, he would have to abandon most of his core economic and political principles.”

Must Obama confess at the altar of Wall street? And what is he to confess? Mr. Barro has not defined what he believes to be Obama’s core economic and political principles. He leaves the warning hanging in the air like a ploy from a demagogue who plays on the emotional prejudices of his audience, if they can catch his drift. In reality, Republicans caused the economic messes that require deficit spending. Mr. Barro provides a mixed bag of economic measures, some of which Obama touted during his campaign, like ending the Bush Tax Cuts (“promises to raise future taxes on the rich” in Mr. Barro’s words) and promtoing Renewable Energy jobs (“added spending on infrastructure” and “job training”). Ending the Bush Tax Cuts is recommended as a way to raise revenue by many economists, including the rating agency Standards & Poor’s, in its report to downgrade the credit rating of the United States of America. The rest of the list provided by Mr. Barro – “an expansion of payroll-tax cuts, short-term tax credits…unemployment benefits” – are measures being used to combat The Great Recession left in the wake of Republican-party Rule.

Reminder: Tax levels were higher when Bill Clinton was President of the United States and we enjoyed one of the longest, most profitable stretches of time in our country’s history. What is happening right now is that President Barack Obama is cleaning up the multiple messes left behind by a profligately spending Republican White House and Republican-majority Congress for 6 out of the 8 years of George W. Bush’s mismanagement of our economy.

IMPORTANT: the $700 BILLION BAILOUT of the Wall Street banks started in September 2008 under George W. Bush. Then Barack Obama was sworn in as President in January of 2009. We are now digging our way out of a deep hole. Keep that in perspective.   

Side note:

Mr. Barro writes, “Liberals love the idea of a levy on evil corporations.” Wow! That is a clever way to use the words “love”; “evil”; “liberals”; and “corporations” in an order that makes it seem as if all liberals think all corporations are evil. That is a fallacy of logic known as a “blanket generalization.” Not all corporations are evil. Rather, some corporations are evil, like Enron.

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For more perspective:

Both Warren Buffett and Robert Reich argue for increased taxes on the Super-Rich, in order to increase revenue for the federal government.

source: http://www.businessinsider.com/the-great-switch-by-the-super-rich-2011-5#ixzz1VgSHrNn3

“The great irony is if America’s super rich financed the U.S. government the way they used to – by paying taxes rather than lending the government money – that long-term budget deficit would be far lower.

This is why a tax increase on the super rich must be part of any budget agreement. Otherwise the great switch by the super rich will make the income and wealth gap far wider.

Worse yet, average working Americans who can least afford it will either lose the services they depend on, or end up with a tax burden they cannot bear.”

source: http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html

“To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes….

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”

There is no direct correlation between taxes and job creation. That is the Republican false claim, called “Trickle-down” economics. The idea is that lower taxes and lower regulation allow investment and growth in companies, which, as the theory goes, benefits investors, pensions and employees. But in reality “trickle-down” did not work: the rich got richer and the rest of us got stagnant wages and multiple recessions. Ronald Reagan tried “trickle-down” in the 1980s and, even though it did not benefit the majority of Americans the first time, George W. Bush tried “trickle-down” economics again in the 2000s–Bush Tax Cuts for the Superwealthy in 2001 and 2003.

Read the original Op-Ed from Warren Buffett…

source: http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html

“Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.”

Buffett is stating that there is no direct correlation between taxes and job creation. He presents the evidence that we had lower taxes on the Superwealthy for 10 years but had “far lower job creation” during that same time period. He also points out that during a 20-year period (1980-2000) when we had higher taxes on the Superwealthy we also had 40 million new jobs. However, Buffett is not making the claim that higher taxes necessarily lead to more jobs. I do not believe Democrats believe higher taxes equal more jobs. I do, however, believe that the Democrats in Congress and in the White House believe correctly that higher taxes on the Superwealthy will create more revenue, which will enable us to pay for services that the majority of Americans depend upon and at the same time help us to lower our national deficit.

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Don Peck, of The Atlantic magazine, bringing the Fande! Mr. Peck’s new book is called Pinched: How the Great Recession Has Narrowed Our Futures & What We Can Do About It.

source: http://www.theatlantic.com/magazine/archive/2011/09/can-the-middle-class-be-saved/8600/

EXCERPTS:

“Yet for all their outsize presence, multinationals [corporations] have been puny as engines of job creation. Over the past 20 years, they have accounted for 41 percent of all gains in U.S. labor productivity—but just 11 percent of private-sector job gains. And in the latter half of that period, the picture grew uglier: according to the economist Martin Sullivan, from 1999 through 2008, U.S. multinationals actually shrank their domestic workforce by about 1.9 million people, while increasing foreign employment by about 2.4 million…. 

‘The Great Recession has quantitatively but not qualitatively changed the trend toward employment polarization’ in the United States, wrote the MIT economist David Autor in a 2010 white paper. Job losses have been ‘far more severe in middle-skilled white- and blue-collar jobs than in either high-skill, white-collar jobs or in low-skill service occupations.’ Indeed, from 2007 through 2009, total employment in professional, managerial, and highly skilled technical positions was essentially unchanged. Jobs in low-skill service occupations such as food preparation, personal care, and house cleaning were also fairly stable. Overwhelmingly, the recession has destroyed the jobs in between. Almost one of every 12 white-collar jobs in sales, administrative support, and nonmanagerial office work vanished in the first two years of the recession; one of every six blue-collar jobs in production, craft, repair, and machine operation did the same….
 
In 2007, the economist Alan Blinder, a former vice chairman of the Federal Reserve, estimated that between 22 and 29 percent of all jobs in the United States had the potential to be moved overseas within the next couple of decades. With the recession, the offshoring of jobs only seems to have gained steam. The financial crisis of 2008 was global, but job losses hit America especially hard. According to the International Monetary Fund, one of every four jobs lost worldwide was lost in the United States….

Edmund Phelps and Leo Tilman, professors at Columbia University, have proposed the creation of a National Innovation Bank that would invest in, or lend to, innovative start-ups—bringing more money to bear than venture-capital funds could, and at a lower cost of capital, which would promote more investment and enable the funding of somewhat riskier ventures. The broader idea behind such a bank is that because innovation carries so many ambient benefits—from job creation to the experience gained by even failed entrepreneurs and the people around them—we should be willing to fund it more liberally as a society than private actors would individually.

Removing bureaucratic obstacles to innovation is as important as pushing more public funds toward it. As Wall Street has amply demonstrated, not every industry was overregulated in the aughts….

Over time, the United States has expected less and less of its elite, even as society has oriented itself in a way that is most likely to maximize their income. The top income-tax rate was 91 percent in 1960, 70 percent in 1980, 50 percent in 1986, and 39.6 percent in 2000, and is now 35 percent. Income from investments is taxed at a rate of 15 percent. The estate tax has been gutted….

High earners should pay considerably more in taxes than they do now. Top tax rates of even 50 percent for incomes in the seven-figure range would still be considerably lower than their level throughout the boom years of the post-war era, and should not be out of the question—nor should an estate-tax rate of similar size, for large estates….

None of the tax changes recommended here would create an excessive tax burden on high earners. If a few financiers choose to decamp for some small island-state in search of the smallest possible tax bill, we should wish them good luck….

The rich have not become that way while living in a vacuum. Technological advance, freer trade, and wider markets—along with the policies that promote them—always benefit some people and harm others. Economic theory is quite clear that the winners gain more than the losers lose, and therefore the people who suffer as a result of these forces can be fully compensated for their losses—society as a whole still gains. This precept has guided U.S. government policy for 30 years. Yet in practice, the losers are seldom compensated, not fully and not for long. And while many of the gains from trade and technological progress are widely spread among consumers, the pressures on wages that result from these same forces have been felt very differently by different classes of Americans.

What’s more, some of the policies that have most benefited the rich have little to do with greater competition or economic efficiency. Fortunes on Wall Street have grown so large in part because of implicit government protection against catastrophic losses, combined with the steady elimination of government measures to limit excessive risk-taking, from the 1980s right on through the crash of 2008.

As America’s winners have been separated more starkly from its losers, the idea of compensating the latter out of the pockets of the former has met stiff resistance: that would run afoul of another economic theory, dulling the winners’ incentives and squashing their entrepreneurial spirit; some, we are reminded, might even leave the country. And so, in a neat and perhaps unconscious two-step, many elites have pushed policies that benefit them, by touting theoretical gains to society—then ruled out measures that would distribute those gains widely.

Even as we continue to strive to perfect the meritocracy, signs that things may be moving in the other direction are proliferating. The increasing segregation of Americans by education and income, and the widening cultural divide between families with college-educated parents and those without them, suggests that built-in advantages and disadvantages may be growing. And the concentration of wealth in relatively few hands opens the possibility that much of the next generation’s elite might achieve their status through inheritance, not hard or innovative work….

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Read more:

source: http://motherjones.com/politics/2011/06/speed-up-american-workers-long-hours?page=1

EXCERPT:

‎”Yes, year after year, Americans wring even more value out of each minute on the job than we did the year before. U-S-A! U-S-A!

Except what’s good for American business isn’t necessarily good for Americans. We’re not just working smarter, but harder. And harder. And harder, to the point where the driver is no longer American industriousness, but something much more predatory….

Consider a recent Wall Street Journal story about ‘superjobs,’ a nifty euphemism for employees doing more than one job’s worth of work—more than half of all workers surveyed said their jobs had expanded, usually without a raise or bonus.

In all the chatter about our ‘jobless recovery,’ how often does someone explain the simple feat by which this is actually accomplished? US productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute. To repeat: Up. Twenty-two. Percent.

This is nothing short of a sea change. As University of California-Berkeley economist Brad DeLong notes, until not long ago, ‘businesses would hold on to workers in downturns even when there wasn’t enough for them to do—would put them to work painting the factory—because businesses did not want to see their skilled, experienced workers drift away and then have to go through the expense and loss of training new ones. That era is over. These days firms take advantage of downturns in demand to rationalize operations and increase labor productivity, pleading business necessity to their workers.’

How does corporate America have the gall? You pretty much know the answer, but for official confirmation let’s turn to Erica Groshen, a vice president at the Federal Reserve Bank of New York: It’s easier here than in, say, the UK or Germany ‘for employers to avoid adding permanent jobs,’ she told the AP recently. ‘They’re less constrained by traditional human-resources practices [translation: decency] or union contracts.’ In plainer English, here’s Rutgers political scientist Carl Van Horn: ‘Everything is tilted in favor of the employers. The employee has no leverage. If your boss says, ‘I want you to come in the next two Saturdays,’ what are you going to say—no?’

And lest CNBC hornswoggle you, this is not just a product of the recession. Throughout the past decade, salaries stagnated and workloads grew, but Wall Street’s bubble allowed us to drown our sorrows in credit. (Sure, I’m working crazy hours and our pension fund is history, but check out my granite countertop!) Then came the crash, and the speedup…speeded up….

Even among college grads, unemployment is twice what it was in 2007, and those statistics don’t take note of all the B.A.’s stocking shelves and answering phones. McDonald’s recently announced that it had gotten more than a million applicants for 62,000 new positions. Enough said.

Meanwhile, what’s passed off as the growing pains of a modern economy is—not to go all Marxist on you—simply about redistribution. For 90 percent of American workers, incomes have stagnated or fallen for the past three decades, while they’ve ballooned at the top, and exploded at the very tippy-top: By 2008, the wealthiest 0.1 percent were making 6.4 times as much as they did in 1980 (adjusted for inflation). And just to further fuel your outrage, that 22 percent increase in profits? Most of it accrued to a single industry: finance.

In other words, all that extra work you’ve taken on—the late nights, the skipped lunch hours, the missed soccer games—paid off. For them….

European companies face the same pressures that ours do—yet in Germany’s vigorous economy, for example, six weeks of vacation are de rigueur, weekend work is a last resort, and companies’ response to a downturn is not to fire everyone, but to institute Kurzarbeit—temporarily reducing hours and snapping back when things start looking up (PDF). Sure, they lag ever so slightly behind us in productivity. But ask yourself: Who does our No. 1 spot benefit?

Exactly. So maybe it’s time to come out of the speedup closet. Rant to a friend, neighbor, coworker. Hear them say, ‘Me too.’ That might sound a little cheesy, and it’s not going to lance Mitch McConnell from the body politic of America. But if you’re in an abusive relationship—which 90-plus percent of America currently is—the first step toward recovery is to admit you have a problem.”

source: http://www.nytimes.com/2011/08/13/opinion/blow-genuflecting-to-the-tea-party.html?src=ISMR_AP_LO_MST_FB

EXCERPT:

“I must confess that every time Representative Michele Bachmann uttered the phrase ‘as president of the United States’ during Thursday’s Republican presidential debate I blacked out a little bit, so I’m sure that I missed some things.

But one thing that I didn’t miss was the moment when all the candidates raised their hands, confirming that they felt so strongly about not raising taxes that they would all walk away from a hypothetical deficit-reduction deal that was as extreme as 10 parts spending cuts to one part tax increases.

That moment should tell every voter in America everything about this current crop of Know-Nothings — no person who would take such a stance is fit to be president of the United States or any developed country.”

source: http://www.nytimes.com/2011/08/13/opinion/magical-unrealism.html?hp

“That has been the nature of every Republican debate this cycle: deny the truth or tell an outrageous lie with such bellicosity that no one dares to challenge it.”

source: http://thecaucus.blogs.nytimes.com/2011/08/11/fact-check-the-republican-debate/?hp

EXCERPTS:

“Representative Michele Bachmann of Minnesota repeated her assertion that ‘we should not have increased the debt ceiling’ — which would have led the nation to default.

Mrs. Bachmann misrepresented the debt ceiling deal when she complained that Congress had given a ‘blank check’ to President Obama by raising it. The debt limit had to be raised to pay for the bills that Congress had already approved, not future spending. And the final deal required reducing the deficit by some $2.1 trillion over the next decade.

Her gloss of the warning issued by Standard & Poor’s, the agency that lowered the nation’s rating, was off as well. ‘When they dropped our credit rating, what they said was we don’t have an ability to repay our debt,’ she said.

That is not what it said. Standard & Poor’s has carefully avoided partisan finger-pointing in its comments. But some of the factors it cited — from the ‘political brinkmanship’ that left the nation at the precipice of default to its concerns that the deficit-cutting deal ‘falls short’ of what is needed — can be attributed to Republicans in Congress as much as, or even more than, President Obama.

The ratings agency lamented in its report on the downgrade that ‘the statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.’

It was Republicans in Congress who made it a bargaining chip. They balked at raising the debt limit unless the White House agreed to a new package of spending cuts. The Obama administration initially sought a ‘clean’ bill to raise the debt limit, but the Republicans prevailed.

When a bill to reduce the deficit and raise the debt ceiling was finally passed this month, the nation was just hours away from a default that economists warned would have harmed the fragile economy.

Of course, President Obama acted similarly to Mrs. Bachmann when he was in the Senate: he voted against raising the debt limit in 2006, a vote his aides say he regrets.

But prominent economists and business leaders have said a failure to raise the debt ceiling would have led to a default that would have hurt the economy. Ben S. Bernanke, the Federal Reserve chairman, testified that it would probably be ‘a recovery-ending event.’

Several Republicans assailed President Obama at the debate for not cutting spending enough. Standard & Poor’s warned that the final agreement ‘falls short of the amount that we believe is necessary.’

But President Obama pushed for a plan to cut the deficit by more — $4 trillion, with cuts to entitlement programs including Medicare and Medicaid, as well as some $1 trillion in new revenues. It was House Republicans who rejected it, opposing any tax increases and ultimately pushing for the smaller measure.

Mrs. Bachmann claimed that the deal had led to only ‘$21 billion in illusory cuts.’ That was the amount projected for the very short term. The nonpartisan Congressional Budget Office found that the deal would cut the deficit by at least $2.1 trillion over the next decade.

Her complaint that the cuts were illusory also clashed with her own critique of the debt ceiling deal from last week, when The Des Moines Register quoted her as saying: ‘Under this debt-ceiling bill, do you know how this works? The first thing that gets whacked and with a hatchet is defense.’”

source: http://latimesblogs.latimes.com/showtracker/2011/08/late-night-jon-stewart-calls-foxs-megyn-kelly-a-hypocrite-.html

EXCERPT:

Jon Stewart: “They’re really only ‘entitlements’ when they’re something other people want. When it’s something you want, they’re a a hallmark of a civilized society, the foundation of a great people. ‘I just had a baby, and found out that maternity leave strengthens society, but since I still have a job, unemployment benefits are clearly socialism.”

* That’s sarcasm, folks.

More from Matt Taibbi...

EXCERPT:

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

http://broadcatching.wordpress.com/2009/04/06/matt-taiibi-the-big-takeover-rolling-stone-magazine/

“The situation worsened in 2004, in an extraordinary move toward deregulation that never even got to a vote. At the time, the European Union was threatening to more strictly regulate the foreign operations of America’s big investment banks if the U.S. didn’t strengthen its own oversight. So the top five investment banks got together on April 28th of that year and — with the helpful assistance of then-Goldman Sachs chief and future Treasury Secretary Hank Paulson — made a pitch to George Bush’s SEC chief at the time, William Donaldson, himself a former investment banker. The banks generously volunteered to submit to new rules restricting them from engaging in excessively risky activity. In exchange, they asked to be released from any lending restrictions. The discussion about the new rules lasted just 55 minutes, and there was not a single representative of a major media outlet there to record the fateful decision.

Donaldson OK’d the proposal, and the new rules were enough to get the EU to drop its threat to regulate the five firms. The only catch was, neither Donaldson nor his successor, Christopher Cox, actually did any regulating of the banks. They named a commission of seven people to oversee the five companies, whose combined assets came to total more than $4 trillion. But in the last year and a half of Cox’s tenure, the group had no director and did not complete a single inspection. Great deal for the banks, which originally complained about being regulated by both Europe and the SEC, and ended up being regulated by no one.

Once the capital requirements were gone, those top five banks went hog-wild, jumping ass-first into the then-raging housing bubble. One of those was Bear Stearns, which used its freedom to drown itself in bad mortgage loans. In the short period between the 2004 change and Bear’s collapse, the firm’s debt-to-equity ratio soared from 12-1 to an insane 33-1. Another culprit was Goldman Sachs, which also had the good fortune, around then, to see its CEO, a bald-headed Frankensteinian goon named Hank Paulson (who received an estimated $200 million tax deferral by joining the government), ascend to Treasury secretary.

And the Fed isn’t the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn’t — particularly the first $350 billion given out under Bush appointee Hank Paulson.

The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded — and this isn’t a joke — by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.

‘Do you believe that?’ she says incredulously. ‘That’s not what we had in mind.’

Another member of Congress, who asked not to be named, offers his own theory about the TARP process. ‘I think basically if you knew Hank Paulson, you got the money,’ he says….

That’s the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers’ credit card.”

Read more: https://fandecande.wordpress.com/?s=taibbi

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Remember: Republicans and Conservatives will lie, cheat and steal.

Fande = Fact & Evidence; Cande = Conjecture & Exaggeration

Bring your Fande, leave your Cande!

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