The evil stepchildren that are TARP and the Stimulus, and why Bush would do it again

Two very good Op-ed pieces today from the New York Times.  The first from Nobel Prize winning Economist Paul Krugman, countering charges from Republicans that the Stimulus was too big, it spent too much, and didn't deliver, is a bunch of baloney.  As Kruman explains,

"If Democrats do as badly as expected in next week’s elections, pundits will rush to interpret the results as a referendum on ideology. President Obama moved too far to the left, most will say, even though his actual program — a health care plan very similar to past Republican proposals, a fiscal stimulus that consisted mainly of tax cuts, help for the unemployed and aid to hard-pressed states — was more conservative than his election platform."

Krugman continues to charge that the much hated Stimulus package was way too small to have the effect needed to pull the economy out of the ditch created by the Wall Street meltdown.  

The next piece comes from New York Times Op-Ed Columnist, Ross Douthat, about the red-in-the-face anger at having to bail out Wall Street, better known as TARP.  Douthat writes,

"The question is whether the program’s extraordinary unpopularity is justified. Few elected officials may be willing to argue for the bailout, but plenty of policy wonks will make the case (from the safety of their think tanks) that the Wall Street rescue package is actually “one of the most unfairly maligned policy initiatives of all time,” as the Center for American Progress’s Matthew Yglesias recently put it.



This case was strengthened by the news that the bailout might actually end up costing the taxpayer less than $50 billion over all, rather than the $700 billion originally set aside to pay for it. Moreover, it’s the auto bailout, which the TARP funds eventually underwrote as well, that’s likely to end up being responsible for the bulk of these losses. As it stands, the federal government may actually end up turning a modest profit on the money injected into Wall Street’s failing banks.


Given what seemed to be at stake in the fall of ’08, TARP’s defenders argue, that doesn’t seem like such a bad bargain: the bailout may have averted a Great Depression, and it didn’t end up costing very much at all."

It all comes back to what were the alternatives to either?  For all the anger of the Tea Party Movement, and the jabbering of the likes of Limbaugh, Beck, Hannity, Savage, O'Reilly, and all these financial and economic experts of their ilk, still no viable alternative economic plan from the Libertarian wing of the Republican Party,... except for LET THEM FAIL and more TAX CUTS FOR THE WEALTHY.  That's what would have saved our economy and prevented a "socialist government takeover" led by Obama-Pelosi-Reid. 

And then there's this from former President George W. Bush, coming out of seclusion, to give a speech in Tyler, TX.  As reported by the Associated Press and reported by Politico,

Bush said that when the markets crashed in the fall of 2008, he recognized that if his administration didn’t do “something significant,” a “depression greater than the Great Depression” could occur.



The former president said the choice to backstop many of the country’s leading financial institutions “wasn’t that hard for me.”

That says it all.  It was that bad. 

Haste to shed bad mortgages leads to shoddy foreclosure paperwork

According to CNNMoney.com, as banks raced to repossess or foreclose on scores of homes, shoddy paperwork could be compounding the problems for the U.S. housing market already struggling to recover.  The revelation of hundreds of thousands of inaccurately processed foreclosure documents has prompted almost every major bank to freeze all foreclosures and nearly every state in the United State have begun investigations into the repossession and foreclosure procedures in their respective states. 

Over the course of July, August, and September "372,445 foreclosure auctions were scheduled,... while 288,345 properties were repossessed by lenders over the same time period."  And for the first time every, over 100,000 homes were repossessed in a single month with 102,134 being taken back by the banks. 

Keep in mind, Banks were the major recipients of TARP.  The American Taxpayer bailed these guys out.  These same banks are showing record profits again, are hemming and hawing about executive compensation packages, and are funneling massive amounts of campaign money to business friendly conservatives (like there's any other type). 

So, do these folks really care if their shaky and shoddy paperwork causes the U.S. economy to take another shot to the gut again?  Here's Matt Lauer of the Today Show interviewing Jim Cramer of Mad Money about the developing problem with the Mortgage Lending Industry, again... 



According to the Business and Media Institute, Jim Cramer was singing a different tune a year ago, but he accurately bashes Wall Street for their hubris.  Again, another example of the disconnect between financial elites and the rest of Americans. 

Nobel Prize winner "not qualified" to be on Federal Reserve Board of Governors?

Yes, that's right.  NOT QUALIFIED.  This according to Senator Richard Shelby (R-AL), who is holding up the nomination of Peter Diamond, MIT Economist, to the Federal Reserve Board of Governors.  Peter Diamond is on of three who are sharing the Nobel Prize for Economics this year, for their work on "how economic policy affects the job market," by understanding "the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy."  

But, according to today's article in The Washington Monthly and the ThinkProgress blog,...

"Five current governors of the Fed, only two, Mr. Bernanke and the vice chairman, Donald L. Kohn, are academic economists who specialize in monetary economics. The other three include a former community banker, a former Wall Street executive and a legal scholar." 

Also, one of the current Federal Reserve Board members who was appointed by President Bush, "has no advanced degree in economics and has never done any academic research in the field. Shelby never raised questions about his qualifications and didn't hesitate to support that nomination." 

Oh yeah.  Totally unqualified to be on the Board of the Federal Reserve.  This explains a lot about why our economy and monetary policy are a mess.  Thank Senator Shelby!  You're a credit to conservatives the world over.  (NOT!) 

Links relating to this post:  http://econ-www.mit.edu/faculty/pdiamond/index.htm 

If this were any other year...

There are relatively normal years when "partisan bickering" meant the back and forth between Democrats and Republicans boiled down to tax cuts, social programs, and national defense.  But, if this were any other year..., we wouldn't be talking about "nullification," repeal of certain parts of the 14th Amendment, prosecuting academics for research that doesn't jive with a particular ideology, or secession from elected officials. 

If this were any other year..., the public debate wouldn't be over the rights of Americans to build a place of worship, if towns across America were being overtaken by Islamic Sharia Law, or if every brown skinned Spanish speaking person was illegally in this country. 

If this were any other year..., the thought of terminating Social Security, Medicaid, Medicare, and Unemployment Insurance would be laughed out of the room.  Or, the same medical care and coverage that members of our Armed Forces receive would be classified as "Socialized Medicine." 

But, this is not any other year.  This is the year of hyper-partisanship and extremist rhetoric.  This year, the people who are the most energized to get out and vote are the ones who finally have candidates to vote for that share these ultra-nationalistic, extremist ideologies.  These are the people that despite proof positive, a person's place of birth, citizenship, or religious affiliation isn't good enough to qualify them as a red, white, and blue American. 

Birthers, nativists, xenophobes, climate deniers, nullifiers, repeal-and-replace(ers), pro-balanced budget amendment, budget cutters, anti-tax, anti-social safety net, lock'em up advocates.  This is what's on the ballot for November 2nd.  Will Americans hold their collective noses and pull the lever, fill in the bubble, touch the screen for an ultra-conservative, nationalist agenda?  Stay tuned...

Taxes: Does taxing the wealthy endanger individual prosperity?

As conservatives, anti-tax advocates, and anyone with wealth continue to assert that increasing taxes on high income earners (those making over $250,000 per year as defined by President Obama) will kill any economic recovery, there's new data to the contrary that effectively shoots this claim out of the water.  

Thanks to the watchful eyes of a progressive tax reform group, Citizens for Tax Justice (CTJ), they came across a Wall Street Journal article that more or less dispels the myth that when taxes are raised on high income earners, or places that have higher tax rates on the same group, that wealth flees for places with lower tax rates.

As reported by the Wall Street Journal's Robert Frank, according to an annual report by Phoenix Affluent Marketing Service, "the overall number of millionaire's in the U.S. rose 8% in 2010 to roughly 5.6 million households." 

States with the highest concentration of millionaire's, Maryland and Hawaii, had some of the highest state income taxes.  As a matter of fact, the report that the Phoenix Affluent Market Service pulled their information from was from the conservative tax policy think tank the Tax Foundation.  Among the top ten states with the highest individual income taxes were: 1) New York, 2) Maryland, 3) California, 4) New Jersey, 5) Ohio, 6) Oregon, 7) Hawaii, 8) Wisconsin, 9) Iowa, 10) Vermont.  Virginia ranked around 30 in the report. 

Out of the top ten individual income tax states listed above, "...the millionaire populations and the millionaire densities of Hawaii, Maryland, New Jersey, California and New York increased in 2010 from 2009. That suggests that the states gained more millionaires than they lost."  So what is so attractive about these states with their prosperity killing individual income taxes? 

According to the Wall Street Journal article these are,

"states with large concentrations of highly educated professionals and business owners, which are key ingredients to growing wealth,” according to David Thompson, Managing Director of the Phoenix Affluent Market.  Additionally, “in general, most high-net-worth households don’t base their living decision on tax rates, but on things like quality of life, access to good education, infrastructure and culture.”

In short, high taxes on the wealthy aren't killing their prosperity or driving them out of states with high individual income taxes.  The wealthy and anti-tax advocates are pushing a total myth. 

Links of interest:  http://www.ctj.org/, http://www.taxfoundation.org/ 

Bombshell accusations linking Va. DEQ and Dominion Power

If these allegations by former Virginia Department of Environmental Quality groundwater expert Allen Brockman hold up, the effects could be far reaching.  It would call into question every ruling or favorable report issued by the Va. DEQ for energy producers and even bio-solid companies. 

While fly ash (byproduct of burnt coal from coal fired power plants) is used widely in construction materials, like cinder blocks and even in road construction, if it is used as construction fill without the proper containment process and sealant materials, the leeching from the heavy metals left in the ash will seep into the water tables. 

At this point all the information that has been released to the public, as well as reported in the Virginian Pilot, indicate Dominion Power was just trying to unload this stuff on anyone that would take it and as fast as possible.  It appears they also knew there would be problems, but chose to mislead the public about an internal report that said this very thing and presented the Chesapeake Planning Commission and City Council with a second report that was much more favorable for the use of the fly ash. 

For the latest on the Battlefield Golf Club groundwater contamination, and the allegations by Allen Brockman about the Va. DEQ's role in all this, click here.  

Image found at:  http://switchboard.nrdc.org/blogs/amall/media/Water--Hickory,%20PA.JPG 

Taxes: What if you got a Receipt instead of a Bill?

What a novel idea.  This is so simple that a 5th Grader would understand.  First reported by NPR, Third Way (a moderate to progressive Think Tank based in Washington, DC) has published an Idea Brief proposing the Federal Government provide taxpayers with a receipt for the taxes they pay. 

It would detail a list of Federal Programs that are funded by the taxes we pay.  While not an exhaustive list, the example of what this receipt would look like includes such things as Social Security, Medicare, Medicaid, Interest on the National Debt, Combat Operations in Iraq and Afghanistan, and so forth... 

The motivation behind this is that if Americans saw what their tax dollars paid for, they would think differently about how government works and if their tax dollars are being waisted. 

To learn more about Third Way, click here. 

To view Third Way's Idea Brief, click here. 

Image found at:  http://couponkatie.com/wp-content/uploads/2010/07/071410-Kroger-Receipt.jpg