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The U.S. Military invaded Afghanistan 9-1/2 years ago to topple the Taliban and capture Osama bin Laden.  Our number one reason for being there vacated the caves of Tora Bora just months after we arrived and, since then, the mission has been one of keeping the Taliban at bay and instituting some form of modern democracy in a country populated by people that aren’t to keen about change. 

Obama’s strategy has been to stabilize the country, get the Afghan military trained well enough to do the job themselves, and then get out. 

But today we learned that there’s gold in them there hills!  Well not so much gold, but a lot of other minerals that we need to keep our high-tech, battery powered economy going.  Today’s NYT reports:

The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys.

The vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists. The Afghan government and President Hamid Karzai were recently briefed, American officials said.

…

So far, the biggest mineral deposits discovered are of iron and copper, and the quantities are large enough to make Afghanistan a major world producer of both, United States officials said. Other finds include large deposits of niobium, a soft metal used in producing superconducting steel, rare earth elements and large gold deposits in Pashtun areas of southern Afghanistan.

Just this month, American geologists working with the Pentagon team have been conducting ground surveys on dry salt lakes in western Afghanistan where they believe there are large deposits of lithium. Pentagon officials said that their initial analysis at one location in Ghazni Province showed the potential for lithium deposits as large of those of Bolivia, which now has the world’s largest known lithium reserves.

Finally a reason to get greedy extraction-industry corporations interested enough in this war to wanna fight harder.   Maybe they’ll even be willing to help pay for it.

Mr. Fish delivers the news perfectly with this comic about the importance of what we’ve discovered that “was hidden beneath the feet of the worthless population” of Afghanistan.

You may have read a story last week about how nearly half of the 2009 tax filers will pay no federal income tax.  That of course got Fox News and all their ignorant viewers in a huff.  They cried foul because they think the temporary stimulus tax breaks benefited low income families to too great of a degree.  Funny… you never hear them complaining about the Bush tax cuts that lowered taxes for the richest 5% in the country by trillions of dollars.  Those tax cuts will expire this year, and Republicans want to see them extended or even lowered.

But, not all extremely rich people are lobbying to make the budget-busting Bush tax cuts permanent.  Many of them have organized to send a message to congress that asks for higher taxes.  The Seattle Times reports:

Judy Pigott, a Seattle author, philanthropist and an heir to the Paccar fortune, is among the group of wealthy individuals calling on Congress to end tax breaks that have enriched people like her.

They have signed a Tax Fairness Pledge to take the money they saved as part of tax cuts enacted under President George W. Bush and donate it to groups working to overturn those policies.

The tax cuts were “based on the erroneous assumption that the trickle-down effect would somehow benefit everyone,” Pigott said. “What we have now is the greatest wealth disparity since the Great Depression.”

She is part of a group called Responsible Wealth Network, a project of the nonprofit United for a Fair Economy. The network of 700 people who are among the wealthiest 5 percent in the U.S. includes Jeffrey Hollender, the co-founder of Seventh Generation natural products, and Eric Schoenberg, an economist at Columbia University and former investment banker.

…

They want Congress to restore the 39.6 percent and 36 percent rates on the highest income earners and end special treatment of dividends and capital gains.

People in the top 5 percent received almost half of the Bush tax cuts, Pigott said, a figure that amounts to more than half of the current $1.5 billion deficit.

That’s right, the federal government is running huge deficits right now, and Fox News and their Tea Party audience are blaming it on the Democrats for the bank bailout (that was Bush not Obama) and Obama’s stimulus spending package. 

This chart tells the real story.

The real budget busters are Bush’s tax cuts for the wealthy, two wars that were put on our national credit card, and an economic recession brought to you by Bush, Inc.  The temporary stimulus package designed to put money in people’s pockets to help jump start the economy has a negligible effect.

Of course the rich can choose to donate their trillions in tax savings to worthy causes, so why would they want to pay more taxes rather than direct their money to whomever they see fit?  Pigott explains: 

“I think it is the national government that can deal with clean air, water, national transportation systems, education,” she said. “I see those things are in trouble on a state level and on a national level because we don’t have the money. Yes, we can do a lot, but we can’t do what the federal government can do.”

And then there’s the guilt factor:

[Arul] Menezes said he has stepped up his charitable giving. But that won’t have the same effect as reworking the tax system, he said.

“It embarrasses me to go into a grocery store and know that the person at the checkout stand is paying a higher tax rate than I am,” he said.

So like I’ve said before, the super rich have benefited for way too long.  It’s time to raise their taxes.

The New York Times reports the top five as:

$4,000,000,000  David Tepper, Appaloosa Management

$3,300,000,000  George Soros, Soros Fund Management 

$2,500,000,000  James Simons, Renaissance Technologies 

$2,300,000,000  John Paulson, Paulson and Company

$1,400,000,000  Steve Cohen, SAC Capital Advisors 

How did David Tepper win the contest for Greediest Person of the Year?

“We bet on the country’s revival,” Mr. Tepper, who describes his trading technique as a mix of deep analysis and common sense, said Wednesday in an interview. “Those who keep their heads while others are panicking usually do well.”

…

Undaunted by that drop — and by the bankruptcy and liquidation of Lehman Brothers — Mr. Tepper loaded up on the preferred shares and bonds of the big banks in late 2008 and early 2009, correctly assuming that the government would not permit bigger institutions to fail.

It did not hurt that the Treasury Department was a fellow investor, buying preferred stock and warrants to help steady the faltering balance sheets of the banks. The government has since sold many of its bank stakes at a considerable profit.

Mr. Tepper, who manages about $12 billion for investors, also benefited from a successful investment in bonds of American International Group, the giant insurance company that was also rescued by the government.

He made a bet that the government would rescue the financial institutions that were too big to fail.  He won big.  Your average middle class, tax paying citizen is left with the bailout bill.

Okay, these guys pay taxes too.  They make obscene amounts of money, so they should be subject to the highest tax rates, right?

Wrong:

If there is one tax loophole that looks dead in the water, it’s the law that lets hedge fund and private equity managers pay a 15-percent capital-gains rate on the multimillion-dollar fees they collect — substantially less than the top income tax rates paid by their secretaries, chauffeurs, and the pilots of their private jets.

On the surface, the stars are aligned. There is a newly elected Democrat in the White House who is desperate to raise revenues. His budget calls for killing this tax break to raise $14.75 billion over five years and $23.89 billion over ten years. In addition, there are Democratic House and Senate majorities – representing the party of working people – and what could be more unfair than letting billionaires pay taxes at a fraction of the rate of the guy with the lunch pail? (Huffington Post, 02-26-2009)

Good question.  And why haven’t the Democrats closed the loophole that allows multi-billionaires to pay a lesser tax rate than I do?  It might have something to do with Democratic congressmen being in the pockets of the hedge fund managers.  That’s right, if you read that Huffington Post article you’ll find a chart that shows the hedge funds donated at about a 2-1 ratio in favor of Democrats. 

2009 was record year for these greedy bastards.  Maybe this time they scraped a little too much money off the top of our depressed economy, and maybe it was enough to draw the ire of of a populace that feels like it’s bearing too much of the tax load.  Will there be any gatherings in Washington D.C. to protest the special budget-busting tax treatment given to these billionaires?  We’ll have to wait and see what happens.

Scanning through the April 2010 Harper’s Index, a couple of numbers with lots of zeros stood out.

$38,900,000,000  That’s the estimated amount that all U.S. banks charged their customers in overdraft fees in 2009.  How much did you chip in?

$2,100,000,000,000  That’s the amount that President Obama has added to America’s “brand value” according to the Nation Brands Index.  We’re Number One!

I don’t even know how to say that number.  What comes after trillions?  I’ll look it up.

Quadrillion.  $2.1 quadrillion gained.  I wonder what the loss attributed to Bush was.

Hello readers.  Do you all remember this post from March of last year about how the richest of the rich in our country were taking the lion’s share of all the country’s income?  That post includes charts that shows just how much of the country’s growth in incomes from 2002 through 2006 the top earners kept for themselves.  You might want to go back and take a look at those charts, but be warned – they’re not pretty.

And 2007 wasn’t any prettier.  Some new IRS data was released this week for 2007, and guess what?  The rich got even richer!  From BusinessWeek:

Feb. 17 (Bloomberg) — The average income reported by the 400 highest-earning U.S. households grew to almost $345 million in 2007, up 31 percent from a year earlier, Internal Revenue Service statistics show.

The figures for 2007, the last year of an economic expansion, show that average income reported by the top 400 earners more than doubled from $131.1 million in 2001. That year, Congress adopted tax cuts urged by then-President George W. Bush that Democrats say disproportionately benefits the wealthy.

Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992, the statistics show. Their average effective tax rate was about half the 29.4 percent in 1993, the first year of President Bill Clinton’s administration, when taxes were increased.

The statistics underscore “two long-term trends: that income at the very top has exploded and their taxes have been cut dramatically,” said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a Washington research group that supports increasing taxes on high-income individuals.

So next time you hear a Teabagger going all crazy about huge deficits and high taxes, you might want to recite a few facts from this article and some more from last year’s post about how the wealthy are grossly undertaxed.  Had they not received trillions in tax cuts from the Bush Republicans, we might even have collected enough to pay for the two wars that are still going on. 

For more about how today’s deficit problems are the result of the tax-law changes enacted under the Bush Administration, read this article on the Center on Budget and Policy Priorities website:

Some of President Obama’s critics and political opponents have launched a line of argument that Obama is mostly to blame for the large federal budget deficits projected for the coming decade and that his Administration’s role in swelling deficits and debt dwarfs that of the previous administration. [1] The critics cite what they present as proof: the fact that the deficit this year and in the years ahead will be much larger than the average deficits under President George W. Bush and that the increase in the national debt thus will be much larger under Obama than Bush.

But asserting that the deficits that lie ahead are primarily the result of policies enacted since President Obama took office is Orwellian. It stands truth on its head.

Republicans have never had any regard for the truth.  They’ve always twisted things upside down, inside out, and backwards; and they’ve almost always gotten away with it.  They get away with it because they own all the mainstream media outlets, or because the American people are uninformed and very gullible.  Or both.  This time, don’t let them get away with it. Spread some truth around.

While tens of millions of hard working Americans struggled to keep their jobs and pay their mortgages and ever increasing health insurance premiums, the for-profit health insurance industry increased their profits by billions over the last year.  From today’s Seattle Times:

WASHINGTON — As the nation struggled last year with rising health-care costs and a recession, the five largest health-insurance companies racked up combined profits of $12.2 billion, up 56 percent over 2008, according to a new report.

Based on company financial reports for 2009 filed with the Securities and Exchange Commission, the report said insurers WellPoint, UnitedHealth Group, Cigna, Aetna and Humana covered 2.7 million fewer people than they did the previous year.

The report also said three of the five insurers cut the proportion of premiums they spent on customers’ medical care, committing relatively more to salaries, administrative expenses and profits.

Prepared by Health Care for America Now, a coalition of liberal advocacy groups and labor unions, the report was aimed at bolstering the drive by Democrats to complete work on a health-care overhaul, which insurers have vigorously opposed.

Industry representatives criticized the report’s approach, noting that 2008 was a bad year financially across many industries, skewing the 2009 comparison.

“It is disingenuous to look at the profits at one company today compared to where it was in the depth of a recession,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s Washington, D.C.-based lobbying arm.

While all five companies indeed reported lower profits between 2007 and 2008, a Seattle Times review of financial statements shows that the profits of three of them — WellPoint, Cigna and Humana — were higher in 2009 than in 2007, before the recession.  Outside factors such as the sales of assets can affect those numbers, however.

…

Industry analyst Sheryl Skolnick, a senior vice president at CRT Capital Group, said many of the insurance companies likely would benefit from more customers.

But they are driven to increase prices for their products to satisfy investors, which in turn drives away more and more customers.

“It is a terrible thing to run your business for Wall Street,” Skolnick said. “It creates very bad incentives, and it ultimately prevents you from doing the thing that is in the best long-term interest of your business. … There is no way that as long as these businesses are publicly traded, they can have the best interest of their customers at heart.”

Sounds to me like the greedy corporate health insurance providers could use a little competition from a lower-priced, more efficient, government-run plan.  So why is the Public Option off the table? 

Only answer I can come up with is to make the rich richer.

It’s difficult to describe how disappointed I am with our government right now, especially congress.  We elected a Democratic majority last November, and a “progressive” Democratic president.  We all wanted change.  What we have so far with regard to health-care reform is at best just a tepid shift from the status quo.

Here’s what Howard Dean wrote about the Senate bill in yesterday’s Washington Post:

Any measure that expands private insurers’ monopoly over health care and transfers millions of taxpayer dollars to private corporations is not real health-care reform. Real reform would insert competition into insurance markets, force insurers to cut unnecessary administrative expenses and spend health-care dollars caring for people. Real reform would significantly lower costs, improve the delivery of health care and give all Americans a meaningful choice of coverage. The current Senate bill accomplishes none of these.

Real health-care reform is supposed to eliminate discrimination based on preexisting conditions. But the legislation allows insurance companies to charge older Americans up to three times as much as younger Americans, pricing them out of coverage. The bill was supposed to give Americans choices about what kind of system they wanted to enroll in. Instead, it fines Americans if they do not sign up with an insurance company, which may take up to 30 percent of your premium dollars and spend it on CEO salaries — in the range of $20 million a year — and on return on equity for the company’s shareholders.

He’s right.  We are never going to get an affordable health-care system in this country as long as it remains a monopoly run by greedy insurance companies.  The only way we can make significant cuts in medical expenses is to first do away with the obscene profits, and second have the government negotiate prices for services.  Giving the people the choice of a government-run public option would be a great start in that direction, but that idea is dead in the water.

Today I read Paul Krugman’s column, and he thinks we should push through passage of this bill even though it is very weak.  Here’s what he has to say:

A message to progressives: By all means, hang Senator Joe Lieberman in effigy.  Declare that you’re disappointed in and/or disgusted with President Obama.  Demand a change in Senate rules that, combined with the Republican strategy of total obstructionism, are in the process of making America ungovernable.

But meanwhile, pass the health care bill.

…

At its core, the bill would do two things. First, it would prohibit discrimination by insurance companies on the basis of medical condition or history: Americans could no longer be denied health insurance because of a pre-existing condition, or have their insurance canceled when they get sick. Second, the bill would provide substantial financial aid to those who don’t get insurance through their employers, as well as tax breaks for small employers that do provide insurance.

…

Look, I understand the anger here: supporting this weakened bill feels like giving in to blackmail — because it is. Or to use an even more accurate metaphor suggested by Ezra Klein of The Washington Post, we’re paying a ransom to hostage-takers. Some of us, including a majority of senators, really, really want to cover the uninsured; but to make that happen we need the votes of a handful of senators who see failure of reform as an acceptable outcome, and demand a steep price for their support.

The question, then, is whether to pay the ransom by giving in to the demands of those senators, accepting a flawed bill, or hang tough and let the hostage — that is, health reform — die.

Okay, I get it, but I don’t like it.  Neither does our fellow contributor Mr. N.J. Barnes who sent me an email this morning:

I actually believe now it’s going to fail. Incredibly, incomprehensively fail. Thanks to Nelson.  Thanks to Liebermann.  Thanks to the Republicans being good at parliamentary stalling and pr even as they are brain-dead in every other way.
 
It’s actually likely to fail.
 
You know, this country and the GOP deserve each other.  They really do.

Yes… the Grand Old Party.  The obstructionist Republicans.  They ruined our country while they were in power, and they continue to ruin it even when they are in what is supposed to be controllable minority.  (Read more about that in Krugman’s column.)

Anyway, the Senate health-care bill leaves a very bad taste in my mouth.  I kind of liken it to buying a very good bottle of Bordeaux a year ago and storing it in the cellar to improve it with some bottle age.  Now it’s time to open it and enjoy it, but it doesn’t pass the sniff test.  The bottle is corked and the wine tastes like shit.  Krugman says drink it anyway.  Dean says select a different bottle.  I have to agree with Dean.

Via Paul Krugman’s blog, via Frank Rich’s column, I came upon a study of income gaps titled Striking it Richer.  The report includes several graphs of income disparity, including this one that shows what percentage of total income the top o.o1% took from 1913 through 2007:

The top .01% (top 14,988 US families, making at least $11.5m in 2007) share increased from 5.46% in 2006 to 6.04% in 2007 leaving well behind the 1928 peak of 5.04 percent (Figure 3). This shows that 2007 was an incredibly good year for the super rich.

2007 wasn’t too bad for the rest of us either, but not near as good as it was for our overlords.

Everything changed in 2008, but the data is not available yet, so no graphs.  The report does make a prediction though.

The economic landscape has obviously changed dramatically since 2007 which marks the peak of Bush expansion. We know from National Account statistics that real incomes per family will fall in 2008 and 2009. Evidence from past recessions suggests that, in general, the top percentile income share falls during recessions, as business profits, realized capital gains, and stock option exercises fall faster than average income. Therefore, the most likely outcome is that income concentration will fall in 2008 and 2009. 

Based on the US historical record, falls in income concentration due to recessions are temporary unless drastic policy changes, such as financial regulation or significantly more progressive taxation, are implemented and prevent income concentration from bouncing back. Such policy changes took place after the Great Depression during the New Deal and permanently reduced income concentration till the 1970s (Figures 2, 3).

Last week the House passed a financial regulation bill that not one Republican supported.  Apparently everything is okay with the Repugnicans.  They think we don’t need to do anything prevent another financial catastrophe that will require the bottom 90% of us to bail out the billionaires who gamble with our money and lose.

Krugman explains:

Talk to conservatives about the financial crisis and you enter an alternative, bizarro universe in which government bureaucrats, not greedy bankers, caused the meltdown. It’s a universe in which government-sponsored lending agencies triggered the crisis, even though private lenders actually made the vast majority of subprime loans. It’s a universe in which regulators coerced bankers into making loans to unqualified borrowers, even though only one of the top 25 subprime lenders was subject to the regulations in question.

Oh, and conservatives simply ignore the catastrophe in commercial real estate: in their universe the only bad loans were those made to poor people and members of minority groups, because bad loans to developers of shopping malls and office towers don’t fit the narrative.

In part, the prevalence of this narrative reflects the principle enunciated by Upton Sinclair: “It is difficult to get a man to understand something when his salary depends on his not understanding it.” As Democrats have pointed out, three days before the House vote on banking reform Republican leaders met with more than 100 financial-industry lobbyists to coordinate strategies. But it also reflects the extent to which the modern Republican Party is committed to a bankrupt ideology, one that won’t let it face up to the reality of what happened to the U.S. economy.

Come on Democrats!  That includes you Blue Dogs in the Senate.  Start acting like you won something last November.  We voted for change, and we want it.

I’ve been thinking about an article I read yesterday morning while skimming through the newspaper.  The story was about how the House voted to extend popular tax breaks like mortgage interest and sales-tax deductions.  It also mentioned how it was going increase the tax rate on income earned by hedge-fund managers from 15% to 35%. 

I’ve heard that hedge-fund managers made hundreds of millions or even billions of dollars every year, but I wasn’t sure how much, so I searched the internet and found this list.  The highest paid hedge fund manager in 2008 was James Harris Simon, who runs Renaissance Technologies Corporation.  He “earned” $2,500,000,000.  He paid a lesser income tax rate than I did and what I presume is much lesser than many of you readers did.  The next three highest paid managers on the list all earned over a billion dollars. 

Who is this guy and what does he do to make so much money?  He’s a mathematician.  He used to teach at MIT and Harvard, and he also did communicatioins research for the Defense Department.  He probably was compensated fairly well for those services, and his work was what we might call “productive.”  He educated people and he developed new mathematical theorems to improve science, and he probably helped the DOD in some way.

Over twenty years ago he figured out how to use his mathematical genius to develop “computer-based models to predict price changes in easily-traded financial instruments.”  Those models run on computers that buy and sell stocks and commodities all over the world.  His models must work extremely well if he can earn high profits for his investors and pay himself 2.5 billion dollars in one year. 

But what he’s doing is not “productive.”  It’s more like rape.  Instead of using his brilliant mind as a rocket scientist or an engineer of some sort, he’s basically using it to satisfy his lust for money by skimming billions of dollars off assets all around the world. 

And thanks to George W. Bush and his loyal cabal of Republican brown shirts, he has paid a lower tax rate than me since 2001.

What are the Republican congressmen saying about the House Bill?

Republicans called it a tax on investment.

“It is nothing short of a new tax on the various investments needed to start the new business and create economic growth,” said Rep. Dave Camp, the top Republican on the tax-writing House Ways and Means Committee.

Republicans hate taxes.  They love cutting them, and because they had been in power so long since Reagan was elected, they’d cut taxes on obscenely rich people from 90% during the Eisenhower era to just 15% for Mr. Simons and company. 

This whole idea that it’s wrong for the top 1% of earners in our country to be taxed at very high rates is one of the many reasons are country is so far in the hole.  These people are taking all the money and paying much less income tax than if all that money was spread amongst people who paid normal income taxes.

What if Mr. Simons was taxed at a rate of 90% like he would have been during the Eisenhower era?  How much would he have left to live on each year?  $250,000,000.  Oh… that’s too bad.  And could our government use the $2,250,000,000 that it would have collected every year?  I think so.

I’ve said it before and I’ll say it again:  IT’S NOT WRONG TO TAX THE RICH!  Increasing the rate on hedge-fund managers from 15% to 35% is a step in the right direction, but they really ought to be paying well over 50%.

Well as long as we’ve got Paul Krugman up on the site, let’s talk about today’s column titled “The Joy of Sachs.” Paul’s always been good at puns, but he’s best at clearly describing what’s going on in our economy, how it affects us, and what needs to be changed.

Krugman’s column is about how and why Goldman Sachs is making billions again and is about to reward its employees with huge bonuses.  How can this be?  We haven’t even seen the worst of this recession yet. How can they possibly be making so much money again?  Paul gives you three reasons:

1.  They are really good at what they do – making money out of nothing.

2.  The compensation system for financial “wizards” hasn’t gone away.

3.  Government hasn’t yet done anything to protect us from another crisis.

Krugman writes:

Financial firms, we now know, directed vast quantities of capital into the construction of unsellable houses and empty shopping malls.  They increased risk rather than reducing it, and concentrated risk rather than spreading it. In effect, the industry was selling dangerous patent medicine to gullible consumers.

Goldman’s role in the financialization of America was similar to that of other players, except for one thing: Goldman didn’t believe its own hype.  Other banks invested heavily in the same toxic waste they were selling to the public at large.  Goldman, famously, made a lot of money selling securities backed by subprime mortgages — then made a lot more money by selling mortgage-backed securities short, just before their value crashed.  All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.

And Wall Streeters have every incentive to keep playing that kind of game.

…

Now the last time there was a comparable expansion of the financial safety net, the creation of federal deposit insurance in the 1930s, it was accompanied by much tighter regulation, to ensure that banks didn’t abuse their privileges.  This time, new regulations are still in the drawing-board stage — and the finance lobby is already fighting against even the most basic protections for consumers.

Who do you think will win the battle? I’m betting on the greedheads.  They always win, and everybody else loses.

The only way they don’t win is with tight government regulations that make the “perfectly legal” things they do now – making money off the lies they tell us - a felony, and then the greedy bastards get prosecuted, their assets get forfeited, and they get thrown in jail.