Aug 092010
 
Example of state employee furloughs in 2009 be...
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Like all good Republicans, in order for Meg Whitman to execute her tax-reduction-for-the-rich strategy, she must reduce spending. According to Whitman’s campaign, this has to be done regardless. Citing recent spending increases, they claim that in the decade preceding the recession, “State spending had increased by nearly 80 percent.” This is true, but it’s also disingenuous. What Whitman fails to mention is that while spending did increase, so did the GDP. The whole truth is that spending rose a much more modest 30 percent when viewed as a portion of the GDP.

Of course, citing the gross increase in spending isn’t, in and of itself, a big issue. But, when it’s used to substantiate their indictment of what they term, a “spending binge,” and then they turn around and offer a GDP-based cap as the solution — well . . . the smell of burnt rubber flowing from the spin is stifling.

But, spin aside, nobody can deny that the State budget needs serious work. Pushing forward the deficit has become standard procedure, and Whitman has a plan to address it. She will “defend the two-thirds budget requirement,” her logic being that to require only a simple majority would be “nothing more than a license for Sacramento to raise our taxes.” The potential for tax increases being Whitman’s number one concern, she’ll fight to keep it from happening, even if it means perpetuating the State Legislature’s inability to develop a budget in a timely fashion.

Judging from her plan, Meg Whitman seems to be oblivious to the detrimental effects of running a state without a budget. Most people would like to avoid the State paying its bills with IOUs or cutting 200,000 worker’s salaries to minimum wage. Does Ms. Whitman understand the situation? Does she care? Maybe it’s just the fact that she had no interest in state politics prior to deciding to run for governor that leaves her so naïve. Perhaps she just didn’t notice that the state had missed its constitutional deadline for a budget 19 times in the past 25 years. It is possible, since she’s rarely even bothered to register to vote for that entire period of time, and more.

Whitman’s prior disregard to fulfill her duty as a voter might also help explain her naïveté concerning California’s budget woes. The state really had no trouble developing budgets prior to 1978 and the passage of Prop-13, which has reduced local tax revenues by an estimated $200 billion over time. These cuts hit education hard and eventually brought about Prop-98, which requires a complex calculation that typically commits 40% of the budget to education. But even though California has the 13th lowest property tax rate in the country, Whitman, and conservatives in general, adamantly oppose any increase in taxes, even one that often results in one neighbor paying 20 times more for identical property.

No, Whitman insists that the only path to a balanced budget is through the unholy pair of both spending and tax cuts. If this seems a bit contrary, especially amidst a recession, it’s because it is. Nobel Prize-winning economist, Joseph Stiglitz, provided his analysis on the matter in 2008. According to Stiglitz, when the economy is weak, “Economic theory and evidence gives a clear and unambiguous answer: It is economically preferable to raise taxes on those with high incomes than to cut state expenditures.”

Stiglitz is very clear about state spending: “Every dollar of state and local government spending enters the local economy right away, generating a greater economic impact. The impact is especially large when the money goes for salaries of teachers, policemen and firemen, doctors and nurses and others that provide vital services to our communities.” Yet Whitman’s plan is 180 degrees off from the sage advice of this renowned economist, and most others.

Whitman will lower taxes on the rich instead of raising them, and will trump that action with deep spending cuts. Little detail is available regarding the cuts she will target, but when employee compensation and retirement forms the largest single piece of the budget pie, there’s no doubt where her axe will have to cut. One such cut that may not break the hearts of many Californians is her planned initiative for a constitutional amendment to make the State Legislature part-time. Such a move is obviously more political than practical, as the savings would be minimal.

But never fear, Queen Meg will get that budget balanced no matter what sacrifice has to be made by average Californians. She has yet to tell anyone which programs will suffer, but the Red Queen has at least given us some notice — she will be ordering “off with their heads” for more than 40,000 state employees.

So, Whitman will create jobs and balance the budget by lowering taxes on the rich and cutting workers from the state payroll. Then, with lower revenues and fewer people, she will move on to her third priority — to “fix education.” More about that in the next part of the Whitman story.


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Aug 082010
 

This White House has “vilified industries,” complains the Chamber of Commerce. America is burdened with “an anti-business president,” moans The Weekly Standard.

Would that all presidents were this anti-business: according to the St. Louis Federal Reserve, corporate profits hit $1.37 trillion in the first quarter—an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter, and is up by 13 percent against 2009. The Obama administration has dropped taxes for small businesses and big ones alike. Maybe the president could be anti-me for a while. I could use the money.

Ezra Klein, Newsweek

Wall Street, Manhattan, New York, USA
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It doesn’t matter how much Obama does for business, or how well business is doing. Republicans have proven that they care nothing about truth, facts or the American people — so as long as conservative voters will buy their lies, they’ll keep spinning Obama as anti-business. This is all a given; the perplexing part is how to get conservative voters to actually look at the facts.

As Ezra Klein stated, “corporate profits hit $1.37 trillion in the first quarter — an all-time high.” Business is doing fine and the GDP continues to rise, but average Americans see no improvement. It’s a jobless recovery, and it’s being sustained by Republican obstruction and subterfuge.

The Republican message is that, although business is sitting on a ton of money, $2 trillion according to Klein — they will not hire until there is more certainty about the future. There’s much truth in this statement, but it falls short of telling the “whole truth,” which includes the fact that it’s the Republicans who are creating the uncertainty, and they’re doing so for their own selfish gains.

They could work with the President toward real solutions, but instead they block anything that can help anyone except the upper 2%.  The vast majority of Republicans have voted against extending unemployment benefits, against providing aid to prevent teacher layoffs, against funding COBRA benefits for the unemployed, against providing stimulus to the economy . . . all in the name of fiscal accountability. Yet those same elected officials support extending the Bush tax cuts for the rich, a move that all economists agree will increase the deficit and do very little to stimulate anything but the further concentration of wealth in America.

Conservative voters would be well served to understand that you can support business without completely sacrificing the wellbeing of The People. Being pro-business does not require solidarity with the Republicans who consistently show their total devotion to profits over people. Republican unity against increasing the liability limits for the disaster in the Gulf, against reforming the Wall Street casino, against disclosure of campaign donations . . . against anything that might reduce corporate profits, is not pro-business — it’s pro-mega-business.

Since the Wall Street thieves and gamblers brought down the economy, there have only been 3 initiatives to gain strong Republican support: bailout the banks, cut taxes for the rich, and fund the Military Industrial Complex. If this is where your priorities are, then by all means vote Republican, but do so knowing that you’re supporting only the biggest businesses and the most wealthy people. The real truth is that both parties are pro-business, but the Republicans stand alone in being anti-American-People — well, really only 98% of the people.


Read the Article at Newsweek

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Aug 062010
 
Jobless not hopeless, Ask for my resume - Chri...
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The Labor Department released its latest employment numbers this morning, and the only good news is that the situation hasn’t gotten any worse. Official unemployment (BLS-U3) still sits at 9.5%, and real unemployment (BLS-U6) — which includes both the underemployed and those who have stopped looking — is stuck at 16.5%. Here at home in Contra Costa County, it’s even worse with the “official” rate up slightly for June at 11.1%, but still better than California overall, which remains over 12%.

Sadly, as job growth remains stagnant, more and more people forget how we came to the disaster that we now face. Memory of the policies that gutted federal tax revenues, sent millions of American jobs overseas, and culminated in an economic crash that extracted a third of the wealth of the middle class and gave it to Wall Street fat cats, has become obscured. The awareness that drove the American populace to reject conservative politics just 20 months ago has somehow been crowded out by impatience and clouded out by Republican propaganda.

We are living today in an America designed and produced by Republican policy. Concentration of wealth is at its highest level since the Great Depression. The GDP continues to grow but unemployment is steady and wages are dropping. We’re told that we have a “jobless recovery,” which for all but the most wealthy means NO RECOVERY AT ALL. The very term is oxymoronic and should cause fits of cognitive dissonance. When the metrics used to gauge the economy show improvement but the quality of life for most Americans continues to decline, it should be clear to everyone that we’re focused on the wrong target.

But even in the pits of massive unemployment, distraction and subterfuge prevail. The Republicans continue their fight for the upper 2%, even to the extreme of deliberately sabotaging progress for the middle and working classes — and still people remain oblivious. They’ve bought the lie and embrace those who seek to exploit them while rejecting the very vehicle established to ensure their prosperity.

It’s Operation MindCrime, and it started 30 years ago, when Reagan sold the notion that government is the problem. Belief in that myth still lingers today, providing the fertile ground for the misinformation machine known as the Republican Party. They know that the true power does still reside with The People, but they also understand that the power is only realized in unity, and that The People can be divided through the unethical use of lies and distortions intended to play on fears and prejudices.

It doesn’t take an economist to understand what’s happened over the past 30 years, what conservative politics has wrought. It doesn’t even take an intelligent person; it simply requires a pause to look at the actual evidence.

The record is clear: the deficit originated with Reaganomics under the pretense of “trickle-down” which was later even refuted by the elder Bush and termed “voodoo economics.” But still, in spite of its detrimental effect on the well being of most Americans, the Republican Party has maintained loyalty to the self-serving fallacy. This allegiance has done nothing to help anyone but the upper 2%. It has resulted in concentrating more wealth in the upper 1% than the bottom 90%, the slowest rate of average job growth of any cycle since 1945, the first decline in median household income of any cycle since 1967, and the 2008 crash and present “jobless recovery.”

This is class warfare, plain and simple. It’s between the top 2% and everyone else. Sadly, far too many conservative middle class Americans have mistakenly taken the wrong side. They’ve bought the lies and fight toward their own demise. The solution is not in raging against these people but in understanding their concerns and sharing the facts with them. The line has been drawn in the sand, and although this truth is too often swept up in the maelstrom of conservative misinformation, it needs to be communicated.

The Democrats certainly have their share of issues, but they alone promote policies that will benefit 98% of Americans. Voters will have another chance in November to put an end to corporate exploitation of our nation. They already know what Republican policy will produce — we’re living in it! They need to open their eyes and give the Democrats a real chance to turn things around.

When speaking earlier this week at the AFL-CIO, President Obama summarized the decision to be made. He first reminded people that it took a decade to drive us into the ditch, and that it will likely take that long to dig us out. He then offered an analogy, “When you’re in a car and you want to go forward, you put it in D. You want to go back in the ditch, you put it on R.” Which direction do you want to go?


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