Sunday, September 26, 2010

Today's Best Reads

1--Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth': Study, Huffington Post

Excerpt: Americans vastly underestimate the degree of wealth inequality in America, and we believe that the distribution should be far more equitable than it actually is, according to a new study.

Or, as the study's authors put it: "All demographic groups -- even those not usually associated with wealth redistribution such as Republicans and the wealthy -- desired a more equal distribution of wealth than the status quo." (Yup)

2--Obama coddles the banksters, Doug Henwood, LBO news from Doug Henwood

Excerpt: In internal administration battles, Geithner “successfully fought against” stricter rules on executive pay, and beat back the attempts to replace top management.

Of course, to say that Geithner won these battles is to say that Obama agreed with him. Once again, the embodiment of hope and change went with the status quo when he didn’t really have to. There would have been little political price to pay for putting the screws to the banksters.

And it looks like the Treasury and the Fed will pump up some $250-500 billion to help hedge funds buy bad assets – with the FDIC guaranteeing the buyers against losses....At this point, the only thing that makes any sense is to nationalize the weakest banks, kick out management, wipe out the shareholders, clear the decks, and start over with a tightly regulated system. This isn’t even all that radical a position anymore – and it may be inevitable, if these sick and devious “public-private partnership” schemes don’t work out, which seems likely. (Good stuff)

3--So, how did the Bush tax cuts work out for the economy? David Cay, economist's view

Excerpt: Total income was $2.74 trillion less during the eight Bush years than if incomes had stayed at 2000 levels...Average incomes fell. Average taxpayer income was down $3,512, or 5.7 percent, in 2008 compared with 2000, President Bush's own benchmark year for his promises of prosperity through tax cuts. ...

The tax cuts cost $1.8 trillion in the first eight years, according to an analysis by the Tax Policy Center, whose reliability the last administration went out of its way to praise.

Examining performance against the promises, what do we find? Overwhelming evidence that the tax cuts of 2001 and 2003 made us much worse off.

4--Liberal blogger directly confronts David Axelrod, accuses White House of "hippie punching", Washington Post

Excerpt: Top Obama adviser David Axelrod got an earful of the liberal blogosphere's anger at the White House moments ago, when a blogger on a conference call directly called out Axelrod over White House criticism of the left, accusing the administration of "hippie punching."

"We're the girl you'll take under the bleachers but you won't be seen with in the light of day," the blogger, Susan Madrak of Crooks and Liars, pointedly told Axelrod on the call, which was organzied for liberal bloggers and progressive media. (Uh oh. The base is starting to growl)

5--Obama invokes 'state secrets' claim to dismiss suit against targeting of U.S. citizen al-Aulaqi, Washington Post

Excerpt: The Obama administration urged a federal judge early Saturday to dismiss a lawsuit over its targeting of a U.S. citizen for killing overseas, saying that the case would reveal state secrets.

Government lawyers called the state-secrets argument a last resort to toss out the case, and it seems likely to revive a debate over the reach of a president's powers in the global war against al-Qaeda. (Obama defends the president's right to kill US citizens.)

6--The Way Out of the Slump, Paul Krugman and Robin Wells, New York Review of Books

Excerpt: Koo argues that today, with the world as a whole in balance-sheet recession, the governments of major economies need precisely to run large fiscal deficits, and to continue doing so until the private sector is ready to spend again. Only then, with the economy no longer dependent on government support, would it be appropriate to shift to deficit reduction.

But can governments really continue to borrow and spend? Yes, says Koo: like the world Keynes saw in the 1930s, today’s world is awash in savings with nowhere to go:

Even in low-savings countries such as the US and the UK, the current recession is the result of the private sector saving more at a time when there are not enough borrowers to go around. In other words, the savings necessary to finance deficit spending are actually generated domestically. Nor is there any risk of crowding out—financial institutions are happy to lend the $100 to the last borrower standing…. (Yes, this is a repeat. But the point needs to be made again and again)

7--Guns Drawn, FBI Raids Peace Activist's Apartment, (Interviews with victims of FBI raids.)

8--A proposal to repair the US mortgage mess, William Wheaton, VOX

Excerpt: "Consider the dilemma of an owner whose original house and loan were established at $100,000, but whose house is currently worth only $60,000. The loan is thus 40% underwater. When restructured, the loan would be divided into a $60,000 traditional mortgage and a claim of, for example, 50% of the future appreciation – capped at $40,000. The borrower’s payments would fall by 40% but later when they moved and the property sold for, say $90,000, they would surrender $15,000 of the sales proceeds. The lender might even recover all its money if farther into the future the property sold for $140,000. The owner’s gain in this case would be reduced from $80,000 to $40,000. Since the claim is in “current” dollars, inflation alone holds out the prospect for eventual loan recovery." (A bad deal for homeowners overall)

9--The mega payoff of increased immigration is lost on the pols, Ezra Klein, Washington Post

Excerpt: I have a plan that will raise wages, lower prices, increase the nation's stock of scientists and engineers, and maybe even create the next Google. Better yet, this plan won't cost the government a dime. In fact, it'll save money. A lot of money. But few politicians are going to want to touch it.

Here's the plan: More immigration. A pathway to legal status for undocumented immigrants. And a recognition that immigration policy is economic policy and needs to be thought of as such.

See what I meant about politicians not liking it?

Economists will tell you that immigrants raise wages for native-born Americans. They'll tell you that they make things cheaper for us to buy here, and that if we didn't have immigrants for some of these jobs, the jobs would move to other countries. (Behold, the voice of sanity)

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