Incoming! (Alarming New House Chairmen)

Among the incoming new House Chairmen are some particularly alarming ones:

Rep Fred Upton (R-MI) is ascending to the Chairmanship of the House Energy Committee.  Great news, right?  Afterall, he's "admitted in the past that greenhouse emissions should be reduced."  But that's the old Upton.  After the transformative effect of attacks from Beck and the Tea Party stirred with hefty contributions from the pollution profiteering Koch Industries, there's a new Upton.  Now Rep Upton is co-writing articles with Tim Phillips of the AFP, a front-group the Kock brother's use to direct the Tea Party against government regulation that might otherwise force them to be responsible businessmen.

Rep Spencer Bachus (R-AL) snagged the House Financial Services Committee chairmanship, covering the banking industry.  Great new, right?  After all, he got slightly less in contributions over the 2009-10 election cycle from the finance/insurance/real estate sector than the outgoing Chairman Frank (D-MA) picked up over the last two years.  Ah, but here's the rub:  Rep Frank looked at his contributions and remembered not to be too terribly harsh to the banks -- important to the economy and such -- while writing regulations to make them conform to safer standards and make them more stable companies.  Rep Bachus, by contrast, says "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks."  He further explained that he meant he want to ensure we don't micromanage banks.  After deregulation and avoidance of new CDO regulation gave us this huge mess, haven't we had enough trouble from the Republican hands-off approach to oversight of the finance industry?

Then there's the new House Judiciary Committee's subcommittee on immigration issues chairman, Rep Steve King (R-IA).  According to the Huffington Post, "King calls illegal immigration a 'slow motion terrorist attack' and is generally in favor of the most drastic measures to curb it. He has some interesting ideas as to how illegal immigrants can be sussed out, involving shoes and ESP. And he's leading the charge against the 14th Amendment and birthright citizenship as well."

Sure, some of the incoming chairmen aren't quite as alarming as these.  (Others are -- but aren't as easy to sum up.)  But even if these were the only worrisome ones, these are bad enough.

Additions 01/06/2011:

Then there's the new chair of the science committee, the guy who brought us the headline "GOP Kills Science Jobs Bill By Forcing Dems To Vote For Porn"

Party of Lincoln?

In the old days, the Republican party used to believe in using taxes to build infrastructure for prosperity, protect domestic industry, and carry out the work of the nation.

President Lincoln signed the Revenue Act of 1861 to create the first US federal income tax. That program included a higher rate on those living outside the country. Then in 1862, Lincoln topped that with our first progressive rate income tax by signing the Revenue Act of 1862. Each of these were passed by the 37th United States Congress, with Republican majorities in both the House and Senate. In 2008 dollars, the higher rate of the 1862 provision applied to those earning the equivalent of around $221 thousand. To collect that revenue, President Lincoln created the office of the Commissioner of Internal Revenue. That position eventually became the head of the Internal Revenue Service (IRS).

Republicans largely brought about the First Transcontinental Railroad with such measures as the 1862 Pacific Railway Act (and related acts of 1863 through 1866). Among other steps, they issued government bonds to cover the cost. The bonds were repaid with interest by the railroads, rather like the corporate repayment of bailout money seen after the recent Great Recession that in some parts turned a profit for the taxpayer ... except the railroad project of the 1860s did not require an emergency to trigger action.

The Republican Congress and President Lincoln also gave us the land-grant colleges, under the Morrill Act of 1862. The establishment of land-grant colleges represented a major investment in education. This system of colleges still continues to meet the needs of many of today's employers for a wide variety of skills and to usually offer a relatively low cost of tuition compared to other institutions.

"Republicans are for both the man and the dollar, but in case of conflict the man before the dollar." -- Lincoln

Today's GOP placed tax cuts for the wealthiest 2% as their top priority such that they would block everything else -- no matter how that else might help the common man -- until they got that top 2% their extra dollars. It would be hard to be in more direct opposition to President Lincoln's ideals than the Republicans of today.

Ike on tax cuts

“Every dollar spent by the government must be paid for either by taxes or by more borrowing with greater debt. The only way to make more tax cuts now is to have bigger and bigger deficits and to borrow more and more money. Either we or our children will have to bear the burden of this debt. This is one kind of chicken that always comes home to roost. An unwise tax cutter, my fellow citizens, is no real friend of the taxpayer."

- Dwight D. Eisenhower (old-school Republican)

What saved the 9/11 first responder bill?

Great news: a 9/11 health bill passed the Senate! But wait, what changed? Why did GOP opposition go away? Most reports on the new version of the 9/11 bill appear content with the low-hanging fruit and what the Republicans want you to see as their main objection. If you just skim the headlines, you might think it was John Stewart shaming Congressional Republicans combined with the new version lowering the cost estimate versus the original version.

Dig deeper. The big, hairy deal for the Republicans was the change in how we're paying for it ... and not in an entirely good way. The old bill was paid for by closing a tax loophole benefiting foreign corporations. As the Financial Times put it, "But the revenue offsets could prove to be significant irritants in economic ties with China and India." So the Chamber of Commerce, with significant dues coming from China and India, lobbied against the bill for that reason. As previously detailed, the GOP listens to the Chamber. Pressure from John Stewart or no, the Republicans weren't about to accept any bill closing that tax loophole and making the Chamber -- by far the top spending lobbying group -- less eager to campaign for the GOP. The new version instead sets up a fee on government procurement contracts with countries that haven't signed onto a WTO agreement and extends visa fees. That's less offensive to the Chamber, so it's OK with the Republicans.

I suppose the new way of paying for it is OK. At first glance, it at least sounds better than not implementing those fees. But imagine if the GOP weren't so influenced by the Chamber. Maybe in that alternate world we would have done both: closed the loophole and implemented the fees.

A Cycle: the GOP, the Chamber, and China

What cycle could wrap together the Republican party, the Chamber of Commerce, and China (among other foreign interests)?  The natural cycle of money, influence, and power, of course.  China is just one of the homes of the foreign companies behind the US Chamber of Commerce.  We can't tell how many of the Chamber's dues-paying members are from each foreign country; although given the size of China's economy, we can guess that a fair amount of the dues probably come from China.  (China is the world's 2nd largest economy and of the top 50 economies, China is by far the fastest growing.)  The Chamber in turn funds much of the political campaign effort for the Republican party, operating in the interest of their members as best they can.  For their part, the Republicans seek to promote the causes of their donors.

The steps of the cycle:

1. Of the dues that make up the general budget of the US Chamber of Commerce, the biggest spending lobbying organization in the United States, much comes from foreign members.  (Such as operations in China and India to whom we outsource work from American companies.)
2. The Chamber of Commerce funded many of the campaign commercials that lead to Republican wins in the 2010 elections, enough that a Republican would have to be fully brain-dead to not understand that the Chamber is a big source of the power the party has.
3. The Chamber of Commerce lobbied
1. against the 9/11 health bill to "keep open a tax loophole benefiting foreign corporations", which makes perfect sense given that many of their members are foreign corporations
2. against the DISCLOSE act, which would have shed light on their funding situation and campaign activity
3. on behalf of foreign companies that are some of the highest growth investment opportunities and thus likely to get a lot of investment money from the upper class tax cuts
4. The GOP voted
1. against the 9/11 health bill (most House Republicans voted against the bill; the Senate Republicans successfully filibustered it)
2. against the DISCLOSE act
3. for upper class tax cuts.  That's an understatement:  they didn't just vote for it, they made it their top priority and refused to let anything else through the Senate until they got it.  It'll mean more money for the wealthy to invest wherever they choose, which might be in foreign companies ... especially if they decide to invest where there's the highest potential rate of return.
5. The Republican efforts bring more money to foreign business.
6. Foreign businesses pay more dues to the Chamber, which feeds back into step #1

Foreign business gives cash to the Chamber, the Chamber gets the GOP elected, the GOP supports foreign business, foreign business has more cash to give to the Chamber, repeat ad nauseum.

I'm not saying the Republicans have thought this out and realize all the implications, but there they are.

It's not a conspiracy.  Let's be clear about that.  A conspiracy would require that those responsible were knowingly working together towards a common goal.  A cycle just means that individual parts are acting in a manner where the set of relationships feed into each other in a repeating chain.  It's a cycle.

Anyone else find this to be a rather bad cycle?

After the photo op (how the GOP turned their backs on 9/11 first responders)

The story in the House of the bill to care for 9/11 first responders is well told by the folks at Crooks and Liars in "Republicans to 9/11 Responders: Die, and Die Quickly". They include a list of the mostly Republican set of House members who voted against it. There's also a good video of Rep Weiner standing up for what's right, not just in supporting the bill but also in how things should be done.

"If you believe that it's right, you vote yes. You don't hide behind procedure and give cover to your pals." -- Rep. Anthony Weiner

Here's are the Republican Senators who effectively stood against the 9/11 first responders by filibustering the James Zadroga 9/11 Health and Compensation Act of 2010:

NAYs ---42
Alexander (R-TN) Barrasso (R-WY) Bennett (R-UT) Bond (R-MO) Brown (R-MA) Bunning (R-KY) Burr (R-NC) Chambliss (R-GA) Coburn (R-OK) Cochran (R-MS) Collins (R-ME) Corker (R-TN) Cornyn (R-TX) Crapo (R-ID)	DeMint (R-SC) Ensign (R-NV) Enzi (R-WY) Graham (R-SC) Grassley (R-IA) Gregg (R-NH) Hatch (R-UT) Hutchison (R-TX) Inhofe (R-OK) Isakson (R-GA) Johanns (R-NE) Kirk (R-IL) Kyl (R-AZ) LeMieux (R-FL)	Lugar (R-IN) McCain (R-AZ) McConnell (R-KY) Murkowski (R-AK) Risch (R-ID) Roberts (R-KS) Sessions (R-AL) Shelby (R-AL) Snowe (R-ME) Thune (R-SD) Vitter (R-LA) Voinovich (R-OH) Wicker (R-MS)

Not Voting - 1

Brownback (R-KS) While the majority leader also technically voted against closure, he's the one Senator who had good excuse. With the abuse of the filibuster, it has become common for the majority leader to switch his vote to "no" at the last minute in order to retain the ability to reintroduce the bill later. The rest of them -- all those Republicans -- should have their names inscribed and displayed as the main exhibit in a museum of shame and hypocrisy.

The Golden Fleece

The drums sound. The town crier roars, "Fleecing the rich! Fleecing the rich!"

But who is fleecing whom? And is the only fleece here just wool for pulling over eyes?

Fleecing the rich is a red herring. We have a demand-driven economy. There aren't enough folks in the very top to take care of all the demand. If the middle and lower classes combined don't have enough money, they can't keep commerce flowing fast enough. That matters, because jobs come from spending. Sure, they come directly from business, but business gets its money from spending at that business. Without enough spending, we can't support as many jobs. There's a minimum level of spending the economy needs for businesses to bring in enough money to need the current workforce to meet the demand. More commerce than that level means more jobs are needed. Less commerce than that level means fewer jobs are needed.

"But wait", the supply-siders say, "the wealthy will buy more Bentleys with their tax cuts or vacation more or something and cover that commerce."

Will they? Let's leave aside the fact that Bentley Motors Limited, like Rolls-Royce, is a British manufacturer and a Bentley purchase may not be as likely to create American jobs as a Fiesta or a Cruze purchase. Even more importantly, each wealthy person only needs so many cars, even if they were purchasing American made cars. The 400ish billionaires in the US can only wear so many clothes, eat so much food, or use so much of anything themselves. Yes, there are more millionaires -- several million of them -- but still, they only need so much each. It's the hundreds of millions of people who are less affluent who will always make up the bulk of need for goods and services. It's not strictly for any lack of patriotism among millionaires; it's just that there aren't enough people at the top to need enough goods and services themselves to keep everyone employed.

With the amount of wealth held by the middle and lower classes declining, we have a serious problem. That's all of us ... not just the middle and lower classes, but the wealthy too. The rich may be more insulated from unemployment and stagnant wages than the rest of us, but if the level of commerce falls too low it can fail to sustain their investments. And the bigger argument for those of us who would like to join the ranks of the wealthy: if commerce is shrinking rather than growing, there's not much chance for new members of the upper class. In order to have rising affluence, you have to have a healthy economy. In order to have a healthy economy, the middle class can't be declining ... because the middle class is the core of spending and the heart of the economy.

"But wait," they defenders of trickle-down say, "if we cut they're taxes, they'll have more money to invest. You're saying that if people have more money to invest then the natural inclination is to NOT invest that money? You're saying that if there's an opportunity for a greater return on that investment, people are less likely to invest that money?"

Sure, they'll invest. Many of them will sink the cash in things that don't create jobs (or at least not in significant numbers) such as buying stocks, foreign bonds, money markets, and commodities like gold. If one billionaire buys a zillion shares of Corporation X from another billionaire, that's generally 0 jobs created ... although it may help maintain a job at a brokerage and then the broker's income may help create or sustain a few other jobs (but still, effectively close enough to no jobs versus what certain other uses for that money could do).

Some few of them might invest in venture capital funds that specialize in US startups or expansions. Some few of them might directly invest in US entrepreneurship. But with raw no-strings-attached tax cuts there's no guarantee that any of them will. If other investments look more profitable, most of them won't invest in such American job-creating investments.

Some might also invest in venture capital or direct entrepreneurship in other countries that compete with our own ... thus destroying American jobs. It is entirely possible that some large amount -- potentially even 100% -- of the tax cuts for the top 1% could end up being invested in foreign companies that will end up killing jobs here. It's not likely that every penny will go abroad, but there's no guarantee that any of it will stay. And it is very likely that at least some of it will go to foreign investments that compete with us. Growth in China is currently high, so odds are good that quite a few of them will risk the possible Chinese housing bubble and such in order to capitalize on their high growth rate. Chinese entrepreneurs are probably thrilled that we're considering borrowing money from China to free up no-strings-attached cash from our wealthy such that some of our wealthy will have more money to invest in China.

Of course, it's probably just a coincidence that this is coming right after Republican wins that saw large chunks of their add money coming from the US Chamber of Commerce that gets large chunks of their money from foreign members such as state-owned Chinese companies. Surely it's entirely unrelated that some of the most lucrative investments around are Chinese companies that compete with American companies. I'm not saying there's any cause and effect there. Probably a coincidence, but a very unpleasant one for our prospects of this tax cut for the wealthy being a good thing for the nation.

Perhaps the most interesting potential: The top bracket could all invest the cuts into Treasuries, so we'd be freeing up money for them to lend back to us at interest to cover the money we gave 'em interest free. Merry Christmas to them, eh?

But the long and short of all this is that while tax cuts for the wealthy will mean more investment, that investment won't necessarily help the American economy and may in fact hurt ... because the bulk of it could be investment in our competitors.

Republican Accomplishments

12/09/2010, the Senate Republicans voted against funding our soldiers' wages and equipment, some national security programs, improvements to military family housing units, the authorization to allow ending DADT, and a bunch of other important things in the National Defense Authorization Act for Fiscal Year 2011.

12/09/2010, the Senate Republicans voted to deny health benefits and compensation for Ground Zero rescue and recovery workers under the James Zadroga 9/11 Health and Compensation Act of 2010.

12/08/2010, the Senate Republicans voted to deny "seniors and disabled veterans a $250 emergency payment to make up for the lack of a cost-of-living increase in Social Security benefits for a second year in a row."  Meanwhile, 141 House Republicans united with 12 House Democrats to block the House version (under fast-track rules, 2/3 majority was needed).

12/08/2010, the Senate Republicans voted to deny fire fighters and police officers "the same right to discuss workplace issues with their employer that the federal government grants to most other workers."

12/02/2010, although they didn't quite manage to stop it, 168 House Republicans united together to vote against helping the economy and preserving the middle class with the Middle Class Tax Relief Act of 2010.  Rep. Levin said of the bill, "Provisions in this bill will lower taxes for every American taxpayer and small business to help them grow and create jobs."

12/01/2010, although they didn't quite manage to stop it, 162 House Republicans united together to vote against the Healthy, Hunger-Free Kids Act to avoid improving access to nutritious meals for children in a manner that was entirely paid for with several money-saving measures.  Only one Republican voted for the measure.

11/30/2010, 15 Senate Republicans broke ranks to pass the FDA Food Safety Modernization Act.  25 Republicans (and no Democrats) voted against the act.

11/17/2010, the Senate Republicans voted to deny more effective remedies to victims of discrimination in the payment of wages on the basis of sex (the Paycheck Fairness Act)

09/29/2010, although the measure passed, 157 House Republicans united to deny health benefits and compensation for Ground Zero rescue and recovery workers under the James Zadroga 9/11 Health and Compensation Act of 2010.

09/28/2010, the Senate Republicans voted against the Creating American Jobs and Ending Offshoring Act.

09/23/2010, the Senate Republicans voted to deny us the opportunity to know who funds adds under the Democracy is Strengthened by Casting Light on Spending in Elections Act (DISCLOSE).

09/21/2010, the Senate Republicans voted against funding our soldiers' wages and equipment, some national security programs, improvements to military family housing units, the authorization to allow ending DADT, and a bunch of other important things in the National Defense Authorization Act for Fiscal Year 2011.

07/27/2010, the Senate Republicans voted to deny us the opportunity to know who funds adds under the Democracy is Strengthened by Casting Light on Spending in Elections Act (DISCLOSE).

Taxes and Jobs, part 2

My earlier chart showed that lowering taxes has not bought us improved job growth. So what would?

From the figures for tax rates and job growth alone, one might think that we could just raise the marginal tax rate on the top bracket and the rock would crack, jobs would flow forth, and everyone would dance around with leprechauns showering us in cash. Sadly, while some of my relatives have been suspected of being leprechauns, showers of cash don't tend to come quite that simply. (And beside, those relatives are too busy with small farms to shower anybody with cash even if they had it.) Yet the answer isn't all that complex either ... it just takes more than a mere one rate.

What are the mythical arguments against high taxes on upper brackets?

1. It's not fair.
2. They'll take their money and go elsewhere.
3. They'll have less money to use to create jobs.

Myth #1: "It's not fair."

The easiest of these to address is the crying baby argument: "Wah, wah ... I worked hard for this money and I deserve it ... it's not fair to tax me more." In the upper incomes, one should beware of doing anything that invites comparison of effort to income. Does anyone really believe that a multi-million-dollar CEO works harder than a construction worker lifting heavy loads all day, a crop picker bent over the fields, or a dishwasher scouring pans? Does anyone really believe that a hedge fund manager is hundreds of times smarter and more productive than the average teacher, engineer, or computer programmer? Yes, the upper brackets may have worked to get where they are. So did most everybody else who isn't paid as much. Even more importantly, does anyone really believe that people who make a lot more money aren't benefiting a heck of a lot more from the services of our government -- e.g., protection of property -- than people who make a lot less money? The truth of the matter goes far beyond it being fair. It isn't fair to tax the upper brackets equally, because the upper brackets reap more of the benefits of our government. The upper brackets get more; it is only fair for the upper brackets to pay more. Yet, as Warren Buffet tells us, the wealthiest pay lower effective tax rates than their secretaries.

Myth #2: "They'll take their money and go elsewhere."

Where? Where exactly would they go? China is growing, but carries its own risks. (income inequality, food price inflation, a suspected housing bubble that may dwarf the one we had, etc.) Europe has the Euro, which is rather wobbly at this point. Who really wants to shift all their investments to a zone where there are credible fears that the currency may collapse and possibly have half the nations involved break away? Even if the Euro doesn't collapse, austerity measures are widespread around Europe, so they'll likely see negative growth rates around much of Europe over the coming years. Who wants to send money in for negative growth? South America has seen a number of industries nationalized. Africa? Not the most stable investment. Besides, we've got relatively low taxes. There are a lot of nations for which we'd have a lot of room to raise ours before we even matched theirs.

Myth #3: "They'll have less money to use to create jobs."

For corporations, only the profit is taxed. How does a corporation deal with low taxes? Maximize profit ... send more cash to the owners. How does a corporation deal with high taxes? Reinvest ... plow income back into the building a better company to minimize taxable profit and thus tax. Reinvestment means more jobs. You'd have to raise corporate taxes quite a bit before they'd see low enough taxes elsewhere to make it worth moving, given all the disadvantages of doing business elsewhere. So there's leeway to encourage job-creating reinvestment by raising corporate taxes.

For individuals, the tax structure doesn't work quite the same way (although it probably should). But our economy is driven by spending ... not by income. People don't generally build a widget factory just because they had some spare cash. If they're smart, people only build widget factories because they expect more demand for widgets than production of widgets. It's the buyer. The buyer makes it worth building the factory to make the product. Without a buyer to make a factory worthwhile, cash goes into gold, treasuries, money markets, etc. ... things that don't directly provide many jobs. No matter how much money you have, you only need so much actual stuff. If I had ten times my current income, I wouldn't need any more food than I need now. I might get a slightly nicer house and another car. But still, there's only so much I can use -- let alone need -- that I don't have. After about $373,650 or maybe $500,000, one quickly reaches a point where more money just means you can squirrel away more cash into gold (or whichever investment vehicle is offering the best risk/return ratio at present). But until you reach that point -- for the least wealthy (maybe 98%) of the nation -- more money means you can buy more ... and almost certainly will. For the most wealthy (c. 2%), more money just means more money.

Will the wealthy spend more if they're taxed more? Not without incentive. But what if we say that for each 1 dollar you spend on domestic job-creating investments, you can lower your taxable income by 70 cents down until you reach $500,000 (pegged for inflation, please). Imagine that. So if a billionaire spends $100 million building/expanding factories, buying equipment domestically, employee training, or hiring somebody he wasn't paying before, he might then lower his taxable income by $70 million. And keep in mind that this billionaire would own that investment, a fact unchanged by using it to lower taxes. Sound like incentive to invest in American jobs? Maybe. How about if we raise the tax rate on income over $500,000 from the current 35% to 70% or maybe even the 90% we saw under President Eisenhower? What would you do if you were faced with the choice of paying 90% tax on your extra cash (before you could buy gold with it) or investing in something that would create jobs -- something you'd own -- to avoid paying so much tax?

That high is a bit extreme. 90% wouldn't leave much exit for an entrepreneur who wished to retire, so under ordinary circumstance -- outside wartime -- it shouldn't be that high. Perhaps 70% might be high enough. But if we really, really wanted to get people with money to plow it into jobs over the coming year and drop unemployment quick, imagine what a 90% rate on the top bracket (with a job creation taxable-income adjustment) for a year or two might do to lower our unemployment rate.  If we create strong incentive to invest domestically instead of abroad, the investors will find places to make it work.

There is, of course, a catch.  The catch means we should be very careful about putting such a strong incentive to invest into play for very long.  In our crisis shocked market, caution stands so high that supply and demand are strongly linked.  Companies now hesitate to invest in expanded supply until the demand clearly surpasses their production capacity.  Demand growth is slow, and so supply growth is slow.  For stability, this is great.  That stance helps avoid new bubbles.  But for fixing our unemployment problem, such caution hurts.  High unemployment drags on the economy, demanding repair.  The costs of high unemployment to our market's strength require that we get things rolling faster to trim those costs.  To do that, we need to risk encouraging supply to worry less about demand, at least for a while.  Just for a little while ... just long enough to get things rolling.

If folks who can make these changes ever embrace this idea, better ready the leprechauns...

Rewarding misbehavior?

I have to wonder, what does President Obama do when his children throw tantrums?

Following the official GOP tantrum in the Senate, "we'll continue blocking everything unless you give more cash to the wealthy", I expected their next move would be to lay down on the Senate floor and flail their arms when Reid insisted on dealing with things that actually make sense.  But no, apparently President Obama couldn't stand the screaming and crying and offered them a pony, a saddle, riding lessons, and a nice new hat if they'd just stop crying so he could concentrate on writing out a check to cover the interest on their previous gifts.  It seems the Republican's next move was to call their friends to revel in how well the tantrum worked.

But there's still the 111th Congress.  Maybe they'll realize there are better uses for all that money.  Maybe they're the kind of people who would hold out through the tantrum instead of blowing the kid's college fund to appease them for a few minutes.

Austerity: just painful? Or insane?

"Tensions Rise in Greece as Austerity Measures Backfire"

A glimpse of the future? Those folks screaming for focus on deficit reduction -- massive budget cuts -- if they succeed, they may be sending us down the path that Greece is currently taking into the abyss. Austerity is dangerous, especially in a slow economy.

"In Ireland, a Picture of the High Cost of Austerity"

Ireland, Greece, ... the other side of the Atlantic is giving us plenty of dire example for what can happen when you focus on deficit reduction while your economy is running slow. In slow times, cuts may take away what little demand there is ... which means less payroll tax income ... which can mean bigger deficits. Ironic, eh?

Update 01/06/2011:

Germany has joined the club of pain and protests have started there.

UK: UK labor unions warn of surge in strikes

Italy: Italian students are protecting austerity measures. The NY Times reports, "Giuliano Amato, an economist and former Italian prime minister, was even more blunt. “By now, only a few people refuse to understand that youth protests aren’t a protest against the university reform, but against a general situation in which the older generations have eaten the future of the younger ones,” he recently told Corriere della Sera, Italy’s largest newspaper."

Spain: "New austerity measures in Spain, where the overall unemployment rate is 20 percent, the highest in the European Union, are further narrowing the employment window. Spain has pledged to raise its retirement age to 67 from 65, but incrementally over the next 20 years."

All because they're embracing austerity rather than splitting up the currency and having the struggling economies apply the medicine they really need.

Financial Crisis: Just One of Many

Just another one of many: some folks have likened this latest financial crisis to the Great Depression, or at least billed it as the worst financial crisis since then. It may have been as much or more like the Panic of 1873.

Of course, parts of the Panic of 1857 sound really familiar too: "...by July 1856, banks began to lend far more money than they could back up..."

Taxes and Jobs

Check out this chart of taxes and jobs in Presidential administrations back to the Great Depression. The middle number is the average tax % for the top tier. The third number is the average annual job growth.

If you buy that job creation is tied to the taxes on the wealthy, then from these figures the ideal top tax rate would be somewhere in the area of 75% ... certainly in the 70 to 89% range. According to the notion that job creation is tied to taxes on the wealthy, clearly we need to at least double the taxes on the top bracket in order to ramp up job creation.

[I don't necessarily believe that notion, but even without that it still looks like we've dropped taxes on the wealthy too low.]

Figures from http://en.wikipedia.org/wiki/Jobs_created_during_U.S._presidential_terms and http://www.ntu.org/tax-basics/history-of-federal-individual-1.html