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April 1st, 2009:

A Second Look | JFP News, 4/1: The problem of asset bubbles

Apr 1st, 2009
by Tom.
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Just Foreign Policy wrote:

JFP News, 4/1:


From: Just Foreign Policy [info@justforeignpolicy.org]
Sent: Wednesday, April 01, 2009 2:16 PM
To: Tom
Subject: JFP News, 4/1: The problem of asset bubbles

6) The problem of asset bubbles – like the US housing and stock market bubbles – did not even make it into the G20′s draft communiqué, notes Mark Weisbrot in the Guardian. But it is the economic issues of the developing world that are most obscured and neglected. Since 1980, there has been a sharp slowdown in economic growth in the vast majority of low- and middle-income countries. As would be expected during a long period of reduced economic growth, there was also reduced progress in the areas of life expectancy, infant and child mortality and other social indicators. A likely explanation for this massive economic failure is that it had something to do with the neoliberal economic policy reforms that were introduced since the 1980s: the abandonment of development strategies, the introduction of much more restrictive monetary and fiscal policies, an indiscriminate opening to international trade and capital flows, and of course the de-regulation and excesses of the financial sector that the world is now forced to recognize as harmful.

The economic plight of the developing countries is the most neglected. The down-turn in growth of the poorest countries can be attributed to the economic policies initiated by Reagan and continued through Clinton and both Bushes. NAFTA was heralded by Clinton as a cure for the impoverished of the world because of its language that recognized the huge discrepancy in wage earnings.

NAFTA was promised as a leveler of those conditions, but as of today it has failed miserably because there has been no effort from any U.S. administration to pressure for, or offer monetary support of, wage increases in even favored trading partners like Mexico and China. Our labor force has also born the weight of free trade instead of fair trade with poorer countries.

Since the playing field is no longer being leveled by tariffs, our manufacturers race to move to poorer countries thereby exploiting cheap labor and leaving behind our unionized labor force. These manufacturers have upped their profit margins but the prices of goods have risen and they have not passed the savings onto anyone except their CEOs.

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A Second Look | ENVIRONMENT — REPUBLICANS FALSELY CLAIM CLIMATE LEGISLATION WOULD IMPOSE $3,100 TAX ON FAMILIES

Apr 1st, 2009
by Tom.
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The Progress Report wrote:

The New Af-Pak Strategy

From: The Progress Report [progress@americanprogressaction.org]
Sent: Wednesday, April 01, 2009 9:52 AM
To: Tom
Subject: The New Af-Pak Strategy

UNDER THE RADAR

GOP Leaders Boehner and McConnell

ENVIRONMENT — REPUBLICANS FALSELY CLAIM CLIMATE LEGISLATION WOULD IMPOSE $3,100 TAX ON FAMILIES:Congressional Republican leaders such as Rep. John Boehner (R-OH) and Sen. Mitch McConnell (R-KY) are attacking the cap-and-trade proposal before Congress by claiming that it would “cost every American family up to $3,100 per year in higher energy prices.” However, their objections are based on a bogus statistic. It appears that they are getting this number from an intentional misinterpretation of a 2007 study performed by a group of researchers at the Massachusetts Institute of Technology. In an interview with PolitiFact, MIT professor John Reilly — one of the authors of the 2007 study — said the $3,100 tax claim is “wrong in so many ways it’s hard to begin.” “Someone from the House Republicans had called me (March 20) and asked about this,” Reilly said. “I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time.” In fact, the study had actually determined that the net welfare effect on a typical family and the burden would be less than 1/40th what Mitchell and Boehner claim, and wouldn’t occur until 2015. PolitiFact explained: “The report did include an estimate of the net cost to individuals, called the ‘welfare’ cost. It would be $30.89 per person in 2015, or $79 per family if you use the same average household size the Republicans used of 2.56 people.”

I’ve been reading today’s release of the new Republican Road to Recovery, their counter proposal for the President’s budget. They very much want to gain the upper hand in the credibility race with their fiscal propaganda, but it becomes increasingly difficult to believe them when they flaunt falsehoods like this “welfare” cost of the cap-and-trade legislation. It once again proves that the Republicans never let the facts get in the way when they attempt to persuade voters. They were told the truth of the MIT study by the one of the authors of the study yet they insist on repeating the lie. If they want their budget proposals to be believed, then they should back-track this cap-and-trade lie. Publicly.

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A Second Look | Going over First Half of GOP Budget & More Republicanease!

Apr 1st, 2009
by Tom.
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via http://big.assets.huffingtonpost.com/GOPBudget.pdf

I don’t have time to review all of this now, but from what I’ve read so far the GOP alternative plan is to lighten the load of the wealthy. Again.

GOP Leaders Boehner and McConnell

There’s only one thing sort of different from Bush here, and I say sort of different because it is really a rehashed proposal from the presidential candidate who LOST, and that different thing is a John McCain spending freeze only bigger. A spending freeze! How original. Remember Nixon? It didn’t work then and it won’t work now especially when we need spending on infrastructure so badly.

To any rate, here’s some basic fiscal principles that the GOP hope you’ll all swallow.

In addition, the 10-year component of this budget is driven by several basic fiscal principles.

1. Spending is the Problem. Every budgetary consequence starts with spending, and current spending trends are on a path to outpace even the substantial tax increases planned by the President and Democratic Majority. Controlling spending is the key to fiscal sustainability.

2. A Recession is No Time to Raise Taxes. The President likes to contend that his proposed tax hikes will not occur until after the current recession has passed. But to threaten future tax increases will discourage businesses today from making the investments in expansion and job creation that are needed to restore economic growth.

3. Inaction is Not an Option. Some of the most valued government programs – especially those with the mission of health and retirement security – are destined to collapse as currently structured. Those who cling to the status quo, claiming to “protect” these programs, are only assuring their demise. Strengthening those programs demands reform – reform that should start now.

Well, you know how I feel about spending. I’ve said it here many times that spending creates immediate jobs. We have been hemorrhaging jobs at such an alarming rate that no one is willing to invest money for fear the unemployment numbers will tank more than they already have, driving the share values down even further. It is like a circular firing squad, or a race down the toilet. The lack of jobs creates more unemployment in many different ways, the major ones being the stifling effect it has on our publicly traded markets and the downward pull it has on the demand of goods and services. The only thing that can cut off the head of this self-eating snake is government spending.

You know what? Recession or no recession, those folks making over $250,000 are going to remain wealthy no matter if their tax rate is 25% or 35%. Those folks making over $250,000 are personally unaffected by this recession. They can loose few hundred grand on their portfolios and still be rich. They are so well off they cannot even tell that a recession is happening.

It’s the same on the other end you know. There are some folks that live right here in America that are so poor they can’t tell the difference either.

The last of the principles mentioned above speaks of “strengthening retirement security”. That is Republicanease for “it will be better for everyone if those big, beautiful pools of hard cash were in the hands of private investors”.

America has flatly rejected all the above principles.

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