So, NPR requested to speak to some of the potential “victims” of the surtax:
We wanted to talk to business owners who would be affected. So, NPR requested help from numerous Republican congressional offices, including House and Senate leadership. They were unable to produce a single millionaire job creator for us to interview.
Undefeated, NPR next requested the same thing from business groups that have also fought the proposal. Again, no example could be produced.
Eventually, the reporters placed a request for business owners that would be affected by the tax to respond, and they did — only the answers they got were mostly like Jason Burger, co-owner of a company called CSS International Holdings.
Mr. Burger’s company is an international “infrastructure contractor”:
“If my taxes go up, I have slightly less disposable income, yes…But that has nothing to do with what my business does. What my business does is based on the contracts that it wins and the demand for its services.”
Burger says his Michigan-based company is hiring like crazy, and he’d be perfectly willing to pay the surtax.
“It’s only fair that I put back into the system that is the entire reason for my success,” said Burger.
So again, Republicans are manufacturing disastrous consequences for policy proposals that are quite sound.
Now, it is possible that the businesspeople who responded to NPR on Facebook are prone to be more liberal, but the fact that both the Republican party and business trade groups couldn’t provide a single example of an small entrepreneur who would decide not to hire based on his personal taxes is illustrative of how the conservative mind works.
Thinks are true because I feel they are true. Damn the evidence.
- GOP backs payroll tax extension but rejects surtax on millionaires (politicalticker.blogs.cnn.com)
- Does the GOP Really Love You? (inc.com)
Today Ezra Klein posted an interesting piece about the Euro crisis that confirms what I have thought for some time.
You may have heard the standard right-wing talking point that the current economic woes in Europe are directly tied to entitlements. Conservatives made a similar claim about the US deficit, which is why we’ve been talking about that side of the equation instead of higher taxes until recently (thank you OWS).
Both claims, of course stretch the truth — a lot.
The economic downturn (due to the subprime mortgage disaster) and tax cuts for the wealthy are the prime factors in the US deficit.
Entitlements are also not the boogeyman in the European crisis.
Klein’s piece, “A larger welfare state can mean a lower deficit” highlights the case of Germany, which has a hefty welfare state — but didn’t suffer from any of the problems faced by Greece and other Euro-zone countries:
Take Germany. They have a pretty big welfare state: pensions, health care, paid vacations, unemployment benefits equal to two-thirds of one’s income. Indeed, the Organization for Economic Cooperation and Development keeps track of social spending — unemployment, old-age pensions, health care, etc — as a percentage of GDP. In 2007, Germany spent 25.2 percent of their GDP on such things. Greece spent 21.3 percent on social policies. Yet Greece is in crisis, and Germany is fine.
As recently as 1965, the cost of those two systems competed neck-and-neck. That year, Canada spent 5.9 percent of its GDP on health care. The United States spent 5.7 percent. But around that time, Canada was transitioning to its current single-payer system. Over the next four decades, the growth of health-care costs slowed in Canada while it accelerated in the United States. By 2009, Canada was spending 11 percent of its GDP on health care — and covering everyone. The United States was spending 17.4 percent of its GDP and leaving 45 million uninsured. In dollar terms, we’re spending $3,600 more per person, per year, than Canada.
I’m not an economist, but there seems to be some consensus in the articles that I have read that what Klein states is true.
I have seen no convincing evidence that European woes are principally caused by entitlement spending.
In fact, Klein makes a good argument that a strong healthcare system could act as a bulwark against deficit:
If the United States had Canada’s health-care system, and Canada’s per capita health-care costs, we would have a much “larger” welfare state, but we wouldn’t have a deficit problem. Assuming we weren’t spending that money elsewhere, we wouldn’t even have a deficit. Likewise, if any country in the euro zone maintained the United States’s health-care system and our health-care spending, it would have a smaller welfare state, but it would be sagging beneath a debt burden far more onerous than anything anyone in Europe is facing today.
- Contrary To Republican Rhetoric, Europe Is Not In Trouble Because Of Spending And Debt (thinkprogress.org)
- The European Debt Crisis in Three Graphs (bostongazette.wordpress.com)
- A Bankrupt Uncle Sam Hypocritically Lectures Europe On Debt (forbes.com)
This insightful article in CFO Magazine alerts employers avoid the (apparently common) pitfall of paying employees too much:
The example they use is of a person earning $12.50 an hour for work that the rest of the market only pays $8.50 for.
Here are the perilous dangers, as noted by writers Doug White and Polly White:
- Overpaid employees don’t know they are being overpaid!
- Because they don’t know they are overpaid, they live beyond their realistic means
- When the inevitable layoff occurs, the sad employee cannot adjust to earning what he or she actually “deserves” to earn
“Paying significantly above market rates to employees who cannot justify the premium through increased output is not only irresponsible, it’s an abrogation of the company’s fiduciary responsibility to its shareholders.
Most people who find themselves out of work will try to replace the income they have just lost. They believe they can, because they think they are worth what they were making. Refusal to accept lower-paying jobs lengthens unemployment and makes matters worse. They try to hang on to the lifestyle they built, not realizing they will never again attain their former level of income. We’ve seen cars repossessed, foreclosures on homes, broken marriages, and even suicide.”
Note the paternalistic condescension. Wrap your brain around the assumptions made in this article.
Do the authors imagine that with the “extra” $4.00 an hour difference between the “overpaid” and the “properly paid” employee will mean the difference between a used Honda Civic and a Ferrari?
Unbeknownst to the likes of people who write for CFO Magazine, people making the wages described are quite capable and practiced at making the most of their meager wages.
The authors give no word on how overpaying CEOs of companies that lose tons of money is unfair to the all-important shareholders or to the poor CEOs.
I guess that’s because in the current corporate world, CEOs are like migrant farm workers, moving from place to place collecting a crop of benefits, stock options and bonus compensation without worry of having to adjust their lifestyles one iota — even after fucking things up royally.
It sounds to me that the compensation package of the Whites should be scrutinized to make sure they aren’t earning more than the market bears for shovelling bullshit.
We wouldn’t want to be unfair to them.
Via The Business Insider.
60 Minutes had a nice segment reported by Steve Kroft this Sunday.
The reporting makes clear that the notion that the Community Reinvestment Act (CRA) caused the subprime mortgage debacle is getting more and more ridiculous.
Eileen Foster was a senior executive at Countrywide Financial before the bubble burst.
On the program, Foster, who was in charge of finding and investigating fraud at Countrywide, said, “from what I saw, the types of things I saw, it was — it appeared systemic. It, it wasn’t just one individual or two or three individuals, it was branches of individuals, it was regions of individuals.”
It appears there was a gold rush on for selling as much “product” up the chain in the casino that was the deregulated derivatives market.
In overstuffed recycling bins she says she found signatures that had obviously been cut and pasted from old paperwork onto new mortgage documents — an obviously fraudulent practice.
Describing an environment in which employees were encouraged to process bad loans, she provides motive for what drove the systemic corruption:
“The loan officers received bonuses, commissions. They were compensated regardless of the quality of the loan. There’s no incentive for quality. The incentive was to fund the loan. And that’s — that’s gonna drive that type of behavior.”
Yeah. No mention of the poor people and minorities forcing them to make bad loans.
- Prosecuting Wall Street (cbsnews.com)
- Ex-Countrywide Financial Executive: Mortgage Fraud Was ‘Systemic’ (huffingtonpost.com)
- CBS 60 Minutes, 12-4-11: Prosecuting Wall Street (2012indyinfo.com)
- At Countrywide, protecting mortgage fraud involved firing whistleblowers (dailykos.com)
“It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again” – Venture Capitalist Nick Hanaeur
Hanauer has put his name on a growing list of 1 percenters who are boldly stating what most economists already recognize.
Writing on Bloomberg’s website, Hanauer observed:
We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.
“The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.” “We cannot cut our way to greatness,” she added.
I hope this is the dawning of a new capitalist idea.
We have lived too long in the shadow of timid CEOs and their sycophants who look no further than the next quarter.
In order for capitalism to be sustainable, a robust middle class must exist.
The article goes on to note that one of the major factors driving income inequality is the outrageous compensation and bonuses given to the top tier of huge corporations.
Instituting practices that reward performance and sustainability would go a long way toward creating a healthy economy.
- Morgan Stanley Executive Calls For Higher Taxes On The Rich: ‘We Cannot Cut Our Way To Greatness’ (thinkprogress.org)
- Silicon Alley Insider: Venture Capitalist Shreds The Idea That Taxing The Rich Is A Job Killer (businessinsider.com)
- Millionaire Nick Hanauer Shoots Down Neil Cavuto’s Straw Men as He Explains Why His Taxes Should be Raised (crooksandliars.com)
- Who creates jobs? The middle class (dailykos.com)
- Study backs up “Buffett Rule” claims (cbsnews.com)
I am always amazed when I see young people in college supporting Ron Paul.
Many Facebook acquaintances are fervent Paul supporters, posting his rantings about doing away with government interference with the market.
I happen to know that many of these kids have loans and scholarships funded by taxpayer dollars to study such things as history, music and other arts.
Here’s Paul’s response to the question, “Would you abolish all federal student aid”:
“Yes, because there’s no authority to do this, and just think of all this willingness to want to help every student get a college education. So they’re a trillion dollars in debt, we don’t have any jobs for them, the quality of education has gone down, so it’s a failed program. I went to school when we had none of those. I could work my way through college and medical school because it wasn’t so expensive. So when you run up debt, you print money, costs go up in the areas that the government gets involved in: education, medical care, and housing. So it’s artificial and distorts the economy.”
So, put your money where your mouth is. Let’s have the money back with interest, you freeloaders.
In a November 19 post, Reich gives the following advice to the Deficit Supercommittee (which has since disbanded, after failing to reach an agreement):
1. Make no cuts before unemployment is back under control (down to 5%).
2. Make the boost big enough. We need a huge jobs program with components like the New Deal’s Civilian Conservation Corps and Work Progress Administration to restore our infrastructure.
3. Raise taxes on the super rich and tax all income (capital gains included) at the same rate. Restore the tax structure to pre-1980 levels and put a 2% surcharge on income over $5 million.
4. Cut the real welfare — military spending and corporate subsidies. Savings = $400 billion annually.
Reich’s closing plea, of course, fell on deaf ears:
Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you’ll make things much, much worse.
Unfortunately, there’s not a chance any of this will get through in this political climate.
It seems like we are constantly in a battle to mitigate damage from bad policy and those actively on a misguided crusade to make things much worse, and not making any headway in actually fixing the problem.
Some good stuff there, covering a gamut from lists of good science fiction books for teens to a post eviscerating Frank Miller’s “The 300” in response to Miller’s nasty swipe at the Occupy Wall Street protesters.
* Ask your “ostrich” friends: “Tell us how to avoid “class war” now that 400 families own a greater share of our wealth than 50% of Americans. Is there some disparity that would finally make you worry? When they own more than 75%…Perhaps more than 90%? WHEN will you admit that we’ve returned to the normal condition that reigned in 99% of human cultures? Then will you admit that FDR wasn’t Satan, or that our parents in the “greatest generation” weren’t complete idiots, after all?”
He’s promised to take on the film version of Atlas Shrugged and Avatar, which should be interesting.
I highly recommend taking a look!
While the country faces a real crisis in terms of the debt and the budget deficit (slow progress is being made at the federal level in agreeing on $4 Trillion in spending cuts over 10-12 years), Republican state governors have declared war on unions and workers.
The war continues apace in Wisconsin, New Hampshire and Missouri, with measures to strip collective bargaining rights and stifle the formation of unions at the top of the GOP agenda.
Unfortunately, these measures do little to nothing to solve the economic problems of states and the federal government.
They make them problems worse.
Robert Reich posted a good analysis of what these type of measures mean for the economy on his blog Tuesday.
In looking back at what he calls “The Great Prosperity”, Reich outlines how unions were essential to creating the middle class and a stable economy. He goes further to look at a current example of how labor is buoying at least one European economy:
Germany is growing much faster than the United States. Its unemployment rate is now only 6.1 percent (we’re now at 9.1 percent).
What’s Germany’s secret? In sharp contrast to the decades of stagnant wages in America, real average hourly pay has risen almost 30 percent there since 1985. Germany has been investing substantially in education and infrastructure.
How did German workers do it? A big part of the story is German labor unions are still powerful enough to insist that German workers get their fair share of the economy’s gains.
That’s why pay at the top in Germany hasn’t risen any faster than pay in the middle. As David Leonhardt reported in the New York Times recently, the top 1 percent of German households earns about 11 percent of all income – a percent that hasn’t changed in four decades.
In the US, the top 1 percent take home over 20 percent of the nation’s income.
Unless we invest in infrastructure (broadband, smart electrical grid, roads, bridges, etc.) and education, we are really doing little more than bailing water out of the front of the boat into the back.
Coupled with the above, shrinking union representation in the workplace has seen wages that have been in stasis since the early 1980’s.
The wound of wage stagnation creates a cycle that keeps prosperity out of reach of most Americans. How is a worker supposed to purchase the products and services that fuel the economy if they aren’t paid a decent wage? An economy needs consumers. Where are they supposed to come from?
Either our goal as a nation is to raise all boats through good wages and a strong middle class, or it’s to purposely create wealth disparity favoring an increasingly tiny wealthy elite.
This system bears a strong resemblance to what southerners were defending in the Civil War — A plantation economy with the vast majority occupying the lowest rung (low paid workers and slaves) and the miniscule landed gentry reaping all the benefits.
In this type of economy, most of the rungs in the middle are empty or missing.
Such a system is in direct opposition to the generally shared conception of the American Dream — that perseverance and hard work leads to upwards mobility and prosperity.
This certainly is not my vision of America, and I don’t think it’s what a majority of Americans – blue or red – want for the nation.
I couldn’t put it better than Reich:
The current Republican assault on workers’ rights continues a thirty-year war on American workers’ wages. That long-term war has finally taken its toll on the American economy.
It’s time to fight back.
Low tax rates. Profits for so-called “job creators.” Spending cuts. The three things that conservatives say are most necessary for achieving a healthy economy are all occurring at historic levels. If conservatives were right, there could be no way that the economic situation could be this bad on either side of the pond. But it is, and that leads to one inescapable logical conclusion: conservative economic policies are not good for job creation or the overall economy.
Yesterday I listened to a conservative on a radio talk show argue that we haven’t cut taxes deeply enough.
The Ryan plan and GOP policies overall put America more in debt and help balloon the deficit.
The evidence clearly shows that conservative policies have led to lost jobs, stagnant wages, a crappy economy and a lower standard of living.
I think there is a significant movement within conservative circles to create a plantation economy that benefits the wealthy.
No reading of tea leaves is necessary to reach this conclusion — it’s the logical end game of the central policies being pushed by the right.
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