Americans Don’t Turn Their Backs On Americans In Need
As our economy struggles to regain its footing after the worst recession in the lifetime of most Americans, some Republicans in Congress seem determined to erect barriers to economic recovery. They threatened the full faith and credit of the United States. They brought our government to the brink of a shutdown. They have consistently failed to offer meaningful legislation to encourage job creation. And most recently, they refused to ask our nation’s wealthiest individuals and corporations to pay their fair share toward our national security and other vital public services.
Now, in the midst of the holiday season, many unemployed Americans and their families are left wondering if Republicans will once again undercut consumer demand and business confidence. At the end of December, the federal unemployment insurance programs will begin to shut down, despite the fact that there are still roughly 6.5 million fewer jobs in the economy today than when the Great Recession started in December of 2007. As a result, over 6 million will have their benefits terminated by the end of 2012.
My legislation, the Emergency Unemployment Compensation Extension Act, would ensure that this does not happen.
Termination of extended federal unemployment coverage would deal a devastating blow to Americans who have lost their jobs through no fault of their own and who depend on this lifeline until they can again make ends meet. And make no mistake—allowing these families to fall through the safety net would also hurt our economy. Depriving jobless Americans of the money they need to put food on the table, shoes on their children, and keep a roof over their head will cut consumer demand for thousands of local businesses and increase the number of home foreclosures. According to the Economic Policy Institute, cutting off unemployment benefits would cost over 500,000 jobs.
Nonetheless, some Republicans suggest we cannot afford to maintain assistance for the unemployed. That’s right, the same crowd that continues to promote big tax breaks for the wealthiest few, while preserving multinational corporate tax loopholes, argues that helping the unemployed is just too high a mountain for our country to climb.
These are the same Republicans who blame unemployment on the unemployed. Never mind that unemployment insurance replaces less than half of a worker’s former wages and the average unemployment check fails to get a family of four above 70 percent of the poverty level. There are over four unemployed workers for every job opening, meaning that even if every single available job was taken by an unemployed worker there would still be over 10 million of our fellow citizens without work.
As Congress debates my bill, I hope representatives don’t recall just the numbers, but the real people behind them, people like Lynnette, an unemployed worker: “I’m fifty now. It’s the first time I’ve drawn unemployment in my life. I’m tired, I’m demoralized. It was extremely hard for me to get where I was. I strived and fought and suffered. I paid more than my share of dues. I did everything I was supposed to do…Please extend the benefits. Please be aware that this country didn’t suddenly become filled with lazy folks who don’t want to work.”
Americans don’t turn their backs on Americans in need. The time to extend this critical program that serves as a lifeline for so many families is now.
By: U. S. Rep Lloyd Doggett, 25th District of Texas, U. S. News and World Report, December 9, 2011
Morgan Stanley Executive Calls For Higher Taxes On The Rich: ‘We Cannot Cut Our Way To Greatness’
Several wealthy bankers, investors, and entrepreneurs have called for higher taxes on the rich as an important part of reducing the nation’s deficit, led most prominently by Warren Buffett. “It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again,” wrote wealthy entrepreneur Nick Hanauer in an op-ed last week. “Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.”
Joining the list of those in financial positions of power that are calling for higher taxes on the rich is Morgan Stanley Chief Financial Officer Ruth Porat who, as the Huffington Post’s Bonnie Kavoussi reported, said over the weekend that it’s “inappropriate” that income inequality in the country is continuing to grow while taxes on the rich stay low:
“The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.” “We cannot cut our way to greatness,” she added.
The rising compensation of executives and those in the banking industry is one of the major factors driving the nation’s income inequality. And at the same time that the rich have been getting richer, their tax rates have been plummeting. It’s refreshing to hear someone in the banking industry acknowledge these truths and want to rectify them, rather than decrying higher taxes on the rich as akin to the Nazi invasion of Poland.
By: Pat Garofalo, Think Progress, December 5, 2011
Grover Norquist Tells GOP That Raising Taxes On The Middle Class Doesn’t Count As A Tax Increase
Anti-tax zealot Grover Norquist, the president of Americans For Tax Reform and author of the radical anti-tax pledge that has played a significant role in hamstringing budget and deficit-reduction negotiations, has said that it is unacceptable for those who have signed his pledge to vote in favor of any tax increase. But now that President Obama and congressional Democrats are backing a tax cut aimed at stimulating economic growth, Norquist has changed his tune.
Norquist met with Republican members today to let them know that opposing the extension of the payroll tax cut — which would provide many families an extra $1,000 a year — would not amount to supporting a tax increase, National Journal’s Billy House reported today:
That stands in contrast, however, to Norquist’s position on tax cuts for the wealthy. Norquist has repeatedly warned GOP members about voting in favor of repealing the Bush tax cuts for the rich or tax hikes on millionaires, even verbally sparring with a member of a group of millionaires advocating for higher taxes on themselves last month in Washington, D.C. And yet, when it comes to tax cuts for the middle class meant to drive economic recovery, Norquist clearly takes a different stance.
Republicans who have defended those tax breaks for the wealthy aren’t so sure about holding the Norquist position, though. House Majority Leader Eric Cantor (R-VA) warned his rank and file this morning about opposing the extension, telling them that “taxes are a Republican issue and you aren’t a Republican if you want to raise taxes on struggling families to fund bigger government.” Multiple Republican senators, meanwhile, have come out in favor of the extension, and Sen. Sue Collins (R-ME) even proposed raising taxes on some wealthy Americans to pay for it.
By: Travis Waldron, Think Progress, December 1, 2011
The GOP “Wet Blanket” Fetish
The six Republicans from the failed super-committee, in an op-ed today:
The 2001 and 2003 changes to the tax code reduced marginal rates for all taxpayers as well as the rates for capital gains, dividends and the death tax. For technical reasons, all of these provisions expire at the end of next year — meaning that if Congress does not act, Americans will face the largest tax increase in our history. This prospect has put a wet blanket over job creation and economic recovery.
House Speaker John Boehner (R-Ohio), three weeks ago:
“I think the budget deficit and our debt serves as a wet blanket over our economy.
Sen. Susan Collins (R-Maine), in late September:
“Business owners are reluctant to create jobs today when they’re going to need to pay more tomorrow to comply with onerous new regulations. That’s what employers mean when they say that uncertainty generated by Washington is a big wet blanket on our economy.”
Former Sen. George Allen (R-Va.), seeking a comeback, in mid September:
” [T]ax hikes that President Obama has been pushing since he was elected and they will put a heavy, wet blanket on an economy.”
So, to review, Republicans believe the possibility of potential tax increases, regulations, the debt, the deficit, and uncertainty are all a “wet blanket.” I can only assume some focus group somewhere told pollsters they like this metaphor, which is why it’s being used so incessantly.
Let’s make this plain, shall we? The laws of supply and demand are not subject to a Republican filibuster. The economy is struggling because businesses don’t have enough customers. We have high unemployment and depressed wages, which lead to less demand, slower growth, and fewer new jobs. It’s really not that complicated.
Republicans, who should be able to understand these basics, are eager to make matters worse, undermining demand when we should be doing the opposite. And that’s the real wet blanket we should be talking about.
By: Steve Benen, Contributing Writer, Washington Monthly, November 26, 2011
Soaring Inequality: “It’s Time To Take The Crony Out Of Capitalism”
Whenever I write about Occupy Wall Street, some readers ask me if the protesters really are half-naked Communists aiming to bring down the American economic system when they’re not doing drugs or having sex in public.
The answer is no. That alarmist view of the movement is a credit to the (prurient) imagination of its critics, and voyeurs of Occupy Wall Street will be disappointed. More important, while alarmists seem to think that the movement is a “mob” trying to overthrow capitalism, one can make a case that, on the contrary, it highlights the need to restore basic capitalist principles like accountability.
To put it another way, this is a chance to save capitalism from crony capitalists.
I’m as passionate a believer in capitalism as anyone. My Krzysztofowicz cousins (who didn’t shorten the family name) lived in Poland, and their experience with Communism taught me that the way to raise living standards is capitalism.
But, in recent years, some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us. They’re not evil at all. But when the system allows you more than your fair share, it’s human to grab. That’s what explains featherbedding by both unions and tycoons, and both are impediments to a well-functioning market economy.
When I lived in Asia and covered the financial crisis there in the late 1990s, American government officials spoke scathingly about “crony capitalism” in the region. As Lawrence Summers, then a deputy Treasury secretary, put it in a speech in August 1998: “In Asia, the problems related to ‘crony capitalism’ are at the heart of this crisis, and that is why structural reforms must be a major part” of the International Monetary Fund’s solution.
The American critique of the Asian crisis was correct. The countries involved were nominally capitalist but needed major reforms to create accountability and competitive markets.
Something similar is true today of the United States.
So I’d like to invite the finance ministers of Thailand, South Korea and Indonesia — whom I and other Americans deemed emblems of crony capitalism in the 1990s — to stand up and denounce American crony capitalism today.
Capitalism is so successful an economic system partly because of an internal discipline that allows for loss and even bankruptcy. It’s the possibility of failure that creates the opportunity for triumph. Yet many of America’s major banks are too big to fail, so they can privatize profits while socializing risk.
The upshot is that financial institutions boost leverage in search of supersize profits and bonuses. Banks pretend that risk is eliminated because it’s securitized. Rating agencies accept money to issue an imprimatur that turns out to be meaningless. The system teeters, and then the taxpayer rushes in to bail bankers out. Where’s the accountability?
It’s not just rabble-rousers at Occupy Wall Street who are seeking to put America’s capitalists on a more capitalist footing. “Structural change is necessary,” Paul Volcker, the former chairman of the Federal Reserve, said in an important speech last month that discussed many of these themes. He called for more curbs on big banks, possibly including trimming their size, and he warned that otherwise we’re on a path of “increasingly frequent, complex and dangerous financial breakdowns.”
Likewise, Mohamed El-Erian, another pillar of the financial world who is the chief executive of Pimco, one of the world’s largest money managers, is sympathetic to aspects of the Occupy movement. He told me that the economic system needs to move toward “inclusive capitalism” and embrace broad-based job creation while curbing excessive inequality.
“You cannot be a good house in a rapidly deteriorating neighborhood,” he told me. “The credibility and the fair functioning of the neighborhood matter a great deal. Without that, the integrity of the capitalist system will weaken further.”
Lawrence Katz, a Harvard economist, adds that some inequality is necessary to create incentives in a capitalist economy but that “too much inequality can harm the efficient operation of the economy.” In particular, he says, excessive inequality can have two perverse consequences: first, the very wealthy lobby for favors, contracts and bailouts that distort markets; and, second, growing inequality undermines the ability of the poorest to invest in their own education.
“These factors mean that high inequality can generate further high inequality and eventually poor economic growth,” Professor Katz said.
Does that ring a bell?
So, yes, we face a threat to our capitalist system. But it’s not coming from half-naked anarchists manning the barricades at Occupy Wall Street protests. Rather, it comes from pinstriped apologists for a financial system that glides along without enough of the discipline of failure and that produces soaring inequality, socialist bank bailouts and unaccountable executives.
It’s time to take the crony out of capitalism, right here at home.
By: Nicholas D. Kristof, Op-Ed Columnist, The New York Times, October 26, 2011
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