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Month: August 2011

Obama Deserves Credit for Libya Success

Obama Deserves Credit for Libya Success

The apparent defeat of Muammah Gaddafi‘s loyalist forces by a Libyan rebel alliance supported by NATO is a stunning success for the United States, NATO and most of all President Obama. Unfortunately he’s getting little of the credit he deserves.

Obama took the politically risky decision to involve a war-weary America in actively supporting a populist Libyan rebellion that otherwise would have been crushed by the better trained and equipped loyalist forces of Gaddafi. In this he received tepid support from congressional Democrats, wary of another costly commitment, and outright hostility (surprise! surprise!) from a GOP that was all over the place on the issue of whether to intervene. There was the Michelle Bachmann (cuckoo’s) wing of the party who opposed any involvement, apparently content to see the rebels crushed and Gaddafi, the long ruling tyrant, maintain his reign.  At the other extreme we had the two grand interventionists, Senators Lindsey Graham and John McCain, who don’t see a Middle East country they don’t want to invade.

Obama developed a strategy that acknowledged the political realities while nevertheless pursuing the right course.  He directed the United States military to provide enough airpower in the initial stages (the degradation of Libya’s air defence network, pummelling Libyan armour and artillery)  to enable the NATO allies, ably led by the British and French, to assume the role of supporting the rebels with training, intelligence and air support.  Of equal importance, his Secretary of State launched a diplomatic offensive in which she worked along with our allies to successfully marshal international support, both material and moral, for the rebels, including within the Arab world.

Although it came to be derided as the “lead from behind” strategy (a notion which Robert Kagan in Sunday’s Washington Post debunks), it clearly worked. At minimal cost to the US and NATO, we engineered a huge victory for what we all hope will turn out to be democratic forces in Libya. The real beauty of it, however, is that the victory belonged, first and foremost, to the Libyan people who shed all of the blood, and who fought with incredible courage and determination in the face of a ruthless and professionally armed and equipped enemy. The rebels’ ace, however, was the steady, low key, but ultimately devastatingly effective support from the British, French, Qataris, Americans and others, both in and outside of NATO.  The fact that it is Libyans themselves, who won this victory on the ground whilst the allied support was mostly low-level, is a crucial element that the likes of McCain and Graham seem incapable of comprehending.

It isn’t over by any means and as Kagan points out it would be foolish to assume that we can pack our marbles and go home when so much needs to be done to help the forces of democracy to succeed in Libya. And we have no idea at this stage how that effort will turn out.

But for now, Obama’s performance warrants applause not brickbats.

Republicans Want to Raise Taxes on the Middle Class

Republicans Want to Raise Taxes on the Middle Class

Republicans, led by Eric Cantor, want to let the temporary 2% payroll tax reduction implemented by congress last year expire at the end of this year.  

The 2% payroll tax cut is a reduction of the amount employees pay into Social Security from 6.2% to 4.2%.  I can’t say I fully support this tax cut in the first place, but it was sold as an economic stimulus measure designed to put more money in the pockets of wage earners who would spend it and boost the economy.  The tax is imposed on incomes up to $106,800, so this tax cut has very little affect on the super rich, but can put a $1,000 extra dollars a year into an average workers pocket and up to $2,136 into the pocket of an upper-middle-class worker.  Republicans are not fighting to extend this tax cut.  

Republicans are fighting to extend the Bush tax cuts that have also reduced income taxes for the middle class, but not nearly to the extent that they cut taxes for the extremely wealthy. Last year they fought against letting any of the Bush tax cuts expire and this year they fought against the closing of any tax loopholes saying that any action or inaction by congress that ends up increasing federal revenue is a tax increase. 

Obama has argued for extending the Bush tax cuts for people earning under $250,000, but Republicans say letting taxes expire for the wealthy is a tax increase and they will not stand for it.  But by their own definition of what constitutes a tax increase, they will stand for increasing taxes on middle-class wage earners.

Republicans have turned their argument for tax cuts on its head by contending that increasing the federal deficit, which the payroll tax cut does by about $120 billion per year, does not create jobs in the long run – it kills jobs.  Hmmm… I seem to recall that the Bush tax cuts, which added a trillion dollars to the deficit over ten years, were sold as a job-creating measure because more money would go into the hands of the wealthy who would use their extra trillion dollars over the ten-year term of the tax cuts to create jobs. So how did that turn out?  The decade of Bush tax cuts was the worst decade in terms of job growth since The Great Depression. (See four posts down.)

Oh well… It wasn’t bad decade for the super rich “job creators,” because as their incomes more than doubled over that time period, their taxes were cut substantially.  With Republicans on their side, they come out winners every time.

Does anyone out there have any doubts that the Republican Party is of the Rich by the Rich, for the Rich?

Sexy Supermodel Linda Evangelista’s Love Child is Expensive

Sexy Supermodel Linda Evangelista’s Love Child is Expensive

If you are going to have a secret love affair with a sexy supermodel, be careful not to get her pregnant, because child support payments can be very expensive.

linda_evangelista_photo_30 Sexy Supermodel Linda Evangelista's Love Child is Expensive

That’s Linda Evangelista.  She had a secret affair with Salma Hayek‘s husband, French tycoon Francois-Henri Pinault.  Linda gave birth to their love child, Augustin James, in October 2006.  It wasn’t until July 2011 that the New York Post reported Fracois Pinault was the father.

Evangelista is  now asking Pinault to pay $46,000 per month in child support.  She says that’s just enough to provide Augustin James with a minimum level of support.

Robert Frank breaks down the cost of raising the child of a supermodel on the Wall Street Journal blog, The Wealth Report:

24/7 Nannycare:  $23,000 per month

Private pre-school: $2,400 per month

Clothing: $3,000 per month (gotta be Gucci!)

Extracurricular Activities:  $2,000 to $5,000 per month for sports, music, and language lessons

Private luxury transportation:  $6,000 to $8,000 per month

That’s $41,000 and it doesn’t even include food.

The kid is only five years old now, so the school is “cheap” at this point.  That will go up to around $6,000 or $8,000 as he grows older.

Of course he’ll need some drug money and and a therapist when he reaches his teen years, so my advice to Mr. Pinault is to settle for the $46,000 per month.  It’s a bargain!

It’s no wonder we only see supermodels hooked up with the likes of Tom Brady, Andy Roddick, Bruce Willis, and Cristiano Ronaldo – they can afford to make a mistake.  Most men can’t.

And now I can’t help but wonder how many millions it will cost Mr. Pinault to hang on to Salma Hayek or to provide her with a minimum level of support if she decides to dump him.

George McGovern asks why Republicans Hate America so Much

George McGovern asks why Republicans Hate America so Much

George McGovern wrote an open letter to Barack Obama for the September issue of Harper’s Magazine.  His letter asks Obama to step up and lead America by introducing bold initiatives like President Roosevelt did to revive the economy and build up the middle class.

McGovern describes a major hurdle in in Obama’s path that Roosevelt did not have to overcome:

Like Roosevelt, President Barack Obama has inherited a serious economic crisis, but in his first two years in office he has been met with an even worse problem: the rigid opposition of the rival party leaders to national health care and nearly every other proposal he has made.  The Republican House Appropriations Committee has even voted to terminate public funding for NPR and PBS.  Neither during my four years in the House of Representatives, when Dwight D. Eisenhower was in the White House, nor through eighteen years in the U.S. Senate, under John Kennedy, Lyndon Johnson, and Richard Nixon, have I witnessed any president thwarted by the kind of narrow partisanship that has beset Obama.  He has tried to avoid such divisions by publicly explaining his willingness to compromise, but these gestures have been spurned.  Some of his political critics have gone so far as to express the hope that the Obama Administration will fail, even avowing their determination to hasten that failure.  What has happened, one is compelled to ask, to the love of nation?

The Republicans have traded in their love of nation for their hate of Obama and their love of power.  All they want to do is thwart Obama’s every move, blame the whole ensuing fiasco on Obama, and hopefully win the 2012 election. If they do, all they’ll do is the only thing they are good at anymore:  Destroying the working class and making themselves and their billionaire donors richer.

The rest of McGovern’s column is mainly advice for Obama including six bold proposals that Obama should consider:

1.  Get out of Afghanistan this year.  No invading country has ever won there.  We won’t either.

2. Close all U.S. military bases in the Arab world.  They do more harm than good.

3. Consider withdrawing our troops from Europe.

4. Reduce the current military budget from $700 billion to $500 billion next year.

5. Repeal the Bush tax cuts for the rich and then increase their taxes above Clinton’s top rate.

6. Use the savings from ending wars and cutting defense expenditures to rebuild our infrastructure, to revive the G.I. Bill, and extend Medicare to all Americans.

I am for all of these proposals.  Come on Obama, make it happen!

(Update:  McGovern’s column is now available on the Harper’s website, but you need to be a subscriber to access it.  If you are not a subscriber, go buy the magazine.  They need more readers.)

Warren Buffett calls for Congress to Raise Taxes on the Rich

Warren Buffett calls for Congress to Raise Taxes on the Rich

Warren Buffett has not been paying enough income tax for the past decade and he’s had enough freeloading.  In a column published in today’s New York Times, he makes a strong case for congress raising taxes on the super rich.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

Warren Buffett knows the Republicans in congress won’t know what he’s talking about when he says “rich,” so he put it in terms they can understand by writing about the effect of increased marginal rates on those who invest and create jobs:

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.

There’s a post by Bryan Ganz titled “The Relationship Between Tax Rates & Job Growth” on The Civil Discourse blog with a link to all the top-marginal-tax-rate data used in his analysis.  The data shows that Mr. Buffett is correct.  From 2001 through 2010 the top marginal rate averaged 35.72% while job growth averaged -0.16%.  During President Clinton’s tenure, the average top marginal rate was 39.60% and job growth averaged 2.45%.

Mr. Ganz looked at the relationship between tax rates and job growth since the federal income tax was initiated in 1913 and this is what he found:

I looked at those years when the top rate was 70% or above (48 out of the last 97 years) and those years when the top marginal tax rate was 40% or below (37 out of the last 97 years). Together, these two periods accounted for 88% of the time since the imposition of a federal income tax in 1913. It seems that the pendulum swings back and forth, rarely stopping in the middle. The results were surprising to say the least. In those years where the top tax rate was 70% or above, GDP growth averaged 9.0% and job growth averaged 2.6%. Conversely, in those years where the tax rate was 40% or below, GDP growth was an anemic 4.4% and job growth was… well actually there was no job growth. The average for the 37 years where top tax rates were the lowest, job growth averaged zero!

Those are inconvenient facts for the defenders of the super rich “job creators.”  I urge you readers to pass these inconvenient facts on to your representatives in congress, especially if they are Republicans, and even more especially so if they are members of the bipartisan super committee tasked with developing a long-term plan to reduce our nation’s debt.  Every Republican on that committee has taken Grover Norquist’s pledge to never raise taxes, even if the increases affect only the super rich.

Warren Buffet points out just how big of a tax break the super rich have received since the Bush Tax cuts were implemented:

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

That’s a 7.7% tax decrease on the very people who saw their incomes triple during the Clinton years and then double during the Bush years.  A University of California at Santa Cruz study reports their income was much higher in 2007.  The average income of the top 400 earners was $344.8 million. (link to the UCSC study, “Who Rules America: Wealth, Income & Power,” for all the data and graphs.)

Spread the word: It’s time for the super rich to start paying way more income tax.

London’s Burning Dial 999

London’s Burning Dial 999

rioting-carousel-007 London's Burning Dial 999

Oh God save history
God save your mad parade
Oh Lord God have mercy
All crimes are paid

When there’s no future
How can there be sin
We’re the flowers in the dustbin
We’re the poison in your human machine
We’re the future, your future

From “God Save the Queen” by the Sex Pistols, 1977

And you may ask yourself:  Does any of this column written by Mary Riddell for The Telegraph sound at all familiar to us Americans?

It is no coincidence that the worst violence London has seen in many decades takes place against the backdrop of a global economy poised for freefall. The causes of recession set out by J K Galbraith in his book, The Great Crash 1929, were as follows: bad income distribution, a business sector engaged in “corporate larceny”, a weak banking structure and an import/export imbalance.

All those factors are again in play. In the bubble of the 1920s, the top 5 per cent of earners creamed off one-third of personal income. Today, Britain is less equal, in wages, wealth and life chances, than at any time since then. Last year alone, the combined fortunes of the 1,000 richest people in Britain rose by 30 per cent to £333.5 billion.

The failure of the markets goes hand in hand with human blight. Meanwhile, the view is gaining ground that social democracy, with its safety nets, its costly education and health care for all, is unsustainable in the bleak times ahead. The reality is that it is the only solution. After the Great Crash, Britain recalibrated, for a time. Income differentials fell, the welfare state was born and skills and growth increased.

That exact model is not replicable, but nor, as Adam Smith recognised, can a well-ordered society ever develop when a sizeable number of its members are miserable and, as a consequence, dangerous. This is not a gospel of determinism, for poverty does not ordain lawlessness. Nor, however, is it sufficient to heap contempt on the rioters as if they are a pariah caste.

Capsula at KEXP Barbecue August 6, 2011

Capsula at KEXP Barbecue August 6, 2011

Capsula flew in from Bilbao, Spain to play an hour-long set at the annual KEXP Barbecue on Saturday, August 6, 2011. 

Capsula’s members are: Martin Guevara: guitar/vox/effects, Coni Duchess: bass/vox, and Ignacio Villarejo: drums/percussions. 

Their name is the Spanish word for capsule, and they took their name from David Bowie’s song “Space Oddity.” Their website describes them this way: “They love guitars, fuzz, distortion. They sound like mars, dreaming hawaii, a karate fight, flower crowns, vulcano, caramel, gigant waves, turtles in chile, kitten ears. They want to touch your lives and kiss your bones.”

Here are thumbnails of photos from their performance.  Click on them for higher resolution photos.

Their driver was at the merch booth after the show selling their new cd, In the Land of Silver Souls, for the bargain price of $10.  I haven’t seen it in any of our local record stores, but it is sometimes available from Amazon.   Tulip Frenzy has a very good review of the album here.

Koch Brothers Tamper with Wisconsin Senate Recall Vote

Koch Brothers Tamper with Wisconsin Senate Recall Vote

I learned about this story last night while watching The Colbert Report.  The Koch Brothers fund the Americans for Prosperity PAC that was responsible for sending absentee ballots to Democrats in districts that are voting to recall Republican state senators.  The instructions to recipients of the packets say to mail the ballots by August 11th which is two days later than the August 9th deadline.  Americans for Prosperity claimed it was a “typo.”  Right… and then instructions also include incorrect address for mailing the ballots.

You can read all about it here and here, or you can just watch Stephen Colbert explain it to you.