Monday, July 18, 2011

Last Call

How do you end up writing for the Wall Street Journal when you actively lie about how marginal federal and state income taxes work?  Michael Boskin, a Stanford economics professor, shows his staggering ignorance:

It would be a huge mistake to imagine that the cumulative, cascading burden of many tax rates on the same income will leave the middle class untouched. Take a teacher in California earning $60,000. A current federal rate of 25%, a 9.5% California rate, and 15.3% payroll tax yield a combined income tax rate of 45%. The income tax increases to cover the CBO's projected federal deficit in 2016 raises that to 52%. Covering future Social Security and Medicare deficits brings the combined marginal tax rate on that middle-income taxpayer to an astounding 71%. That teacher working a summer job would keep just 29% of her wages. At the margin, virtually everyone would be working primarily for the government, reduced to a minority partner in their own labor.

That is such an astonishing lie, it deserves to be said again just how hollow and pathetic the Wall Street Journal has become since Rupert Murdoch took over.  The reality is only the top $23,500 would be taxed at 25%, the rest would be much lower.  At the state level, only the top $13,000 if that teacher's income would be taxed at 9.5%, again the rest much lower...and then there's deductions to lower the taxable income ever further.

Then Boskin goes on to make up numbers that would raise tax rates well above where they were during the Clinton years on all Americans, which is not what Democrats are proposing at all.  Boskin is assuming Laffer Curve idiocy which will lower revenues and require higher tax rates on everyone to meet a balanced budget.

He then throws out this whopper:

Some argue the U.S. economy can easily bear higher pre-Reagan tax rates. They point to the 1930s-1950s, when top marginal rates were between 79% and 94%, or the Carter-era 1970s, when the top rate was about 70%. But those rates applied to a much smaller fraction of taxpayers and kicked in at much higher income levels relative to today.
There were also greater opportunities for sheltering income from the income tax. The lower marginal tax rates in the 1980s led to the best quarter-century of economic performance in American history. Large increases in tax rates are a recipe for economic stagnation, socioeconomic ossification, and the loss of American global competitiveness and leadership.

Professor Richard Green at USC puts that lie to bed:

This didn't seem right to me, so I went to the National Income and Products Account web site.  For GDP growth after 1947 (the beginning of the quarterly NIPA data), the best 25 year period was between the first quarter of 1949 and the last quarter of 1973, when the economy grew by a multiple of 2.68.  This is well before Reagan took office.  The period of 25-year spells after Reagan took office is small, but the best period is the fourth quarter of 1982 until the third quarter of 2007, when the economy grew by a multiple of 2.26.

The top marginal tax rate from 1951 to 1964?   90%.   The top marginal corporate tax rate?  Around 50%.  In other words, we had a better 25 year economic growth period with high marginal tax rates than we did during the Reagan, Bush 41, Clinton, and Bush 43 years.

And when Democrats prompted legislation to put these higher marginal rates on the ultra-rich, the GOP blocked it, screaming that we had to protect our precious rich people from paying even slightly higher taxes.

In other words, Michael Boskin is lying, then he's making stuff up based on that lie to get to this "Obama will take 71% of what you earn! SOCIALIST STATE!" idiocy.

But what do you expect from Rupert Murdoch's econ rag?

Hacked Off In The UK, Part 3

Another Scotland Yard resignation happened today in the wake of the Rupert Murdoch phone hacking scandal as the man who chose not to investigate News of the World five years ago has now quit.  Deputy Commissioner John Yates has resigned in disgrace, following his boss, Sir John Stephenson.

Mr. Yates is a high profile officer who had been involved in earlier inconclusive police investigations of the scandal. The Metropolitan police announced his resignation and said he would make a statement later on Monday. He and other officers have been underscrutiny by trying to determine why the Metropolitan Police decided to strictly limit the initial phone-hacking inquiry in 2006.

Speaking in South Africa, Mr. Cameron said Parliament would be extended beyond the start of its scheduled summer recess for an emergency session on Wednesday, a day after Mr. Murdoch, his son James and Ms. Brooks are set to testify to a parliamentary inquiry into the scandal.

The announcement came a day after Sir Paul Stephenson, commissioner of the Metropolitan Police Service, commonly known as the Met, said that he had decided to step down because “the ongoing speculation and accusations relating to the Met’s links with News International at a senior level” had made it difficult for him to do his job.

But he said that he had done nothing wrong. He also said that because he had not been involved in the original phone-hacking investigation, he had had no idea that Neil Wallis, a former News of the World deputy editor who had become a public-relations consultant for the police after leaving the paper, was himself suspected of phone hacking, as the unauthorized accessing of voice mail is known.

Mr. Wallis, 60, was arrested last Thursday. 

Scotland Yard hired a former News of the World editor to advise them, only it turned out he was as crooked as the rest of them.  Meanwhile, Rebekah Brooks is indeed testifying Tuesday in front of Parliament, despite her arrest over the weekend.

Former News of the World editor Rebekah Brooks will testify before British lawmakers investigating phone hacking as scheduled Tuesday despite her weekend arrest and release by police, her spokesman told CNN Monday.

Brooks wanted to appear, and "following discussions with her lawyer her wish has prevailed," Dave Wilson said, adding: "The committee members will have to be mindful of the criminal proceedings" when asking the questions.

She's the highest-profile figure to be held over the scandal that has forced the country's top police officer to resign, closed its best-selling newspaper and called Prime Minister David Cameron's judgment into question.

Who will be the first to implicate the Murdochs, Rupert and/or his son James?  Stay tuned.

Iran, So Far Away

If it's summer, it must mean another "Iran is an imminent nuclear threat!" story, only this time the twist is that Israeli PM Benjamin Netanyahu is the one who will start the music.  MJ Rosenberg at Media Matters quotes former CIA legend Robert Baer (played by George Clooney in the movie Syriana, Baer also wrote the book the movie was based on) who went on to say that an Israeli attack on Iran could come before the end of September.

There is almost "near certainty" that Netanyahu is "planning an attack [on Iran] ... and it will probably be in September before the vote on a Palestinian state. And he's also hoping to draw the United States into the conflict," Baer explained.

The Israeli air force would attack "Natanz and other nuclear facilities to degrade their capabilities. The Iranians will strike back where they can: Basra, Baghdad," he said, and even Afghanistan. Then the United States would jump into the fight with attacks on Iranian targets. "Our special forces are already looking at Iranian targets in Iraq and across the border [in Iran] which we would strike. What we're facing here is an escalation, rather than a planned out-and-out war. It's a nightmare scenario. We don't have enough troops in the Middle East to fight a war like that." He add, "I think we are looking into the abyss."

Masters asked Baer why the U.S. military is not mobilizing to stop this war from happening. Baer responded that the military is opposed, as is former Secretary of Defense Robert Gates, who used his influence to thwart an Israeli attack during the Bush and Obama administrations. But he's gone now and "there is a warning order inside the Pentagon" to prepare for war.

It should be noted that the Iranian regime is quite capable of triggering a war with the United States through some combination of colossal stupidity and sheer hatred. In fact, as Baer explained, the Iranian Revolutionary Guard would welcome a war. They are "paranoid." They are "worried about ... what's happening to their country economically, in terms of the oil embargo and other sanctions." And they are worried about a population that increasingly despises the regime.
They need an external enemy. Because we are leaving Iraq, it's Israel. But in order to make this threat believable, they would love an attack on their nuclear facilities, love to go to war in Bahrain and Saudi Arabia and Iraq and hit us where they could. Their defense is asymmetrical. We can take out all of their armored units. It's of little difference to them, same with their surface-to-air missile sites. It would make little difference because they would use terrorism. They would do serious damage to our fleet in the Gulf.
Given all that, is it possible that the United States would allow Israel to attack when the president knows we would be forced' to join the war on Israel's side?

Baer reasons that without Robert Gates stopping Netanyahu, things could be mobilized pretty quickly as far as an Israeli military strike on Iran's nuclear facilities.  It would certainly draw the US into the conflict, Congress would insist on that.

From there, well.  Who knows?  China jumps in, possibly?  Russia?  Things could spiral out of control extremely quickly if Israel goes after Iran.  How valid Baer's assumption is, I have no idea, I'm not on the CIA's Middle East desk.  I do know that many Israeli voices have cautioned against such action, and I know relations between Netanyahu and President Obama are pretty much in the basement right now.

One would think Leon Panetta, the new Defense Secretary and former CIA director, might be cognizant of what Israel plans to do militarily.  I sure hope he has plans to put a leash on the guy, otherwise we're truly screwed.

Tinfoil Hats And Tiny Violins

Last Friday I noted that AG Eric Holder had announced a probe into the News Corp. phone voicemail hacking scandal and remarked:

The Obama justice department investigating the parent company of FOX News.

Let that sink in for a moment what that means to the conspiracy-obsessed people who think Holder is coming for their guns and precious bodily fluids.

And lo and behold over the weekend FOX News did not disappoint.  Having ignored the story for a week, the Eric Holder angle finally makes Murdochgate worthy of coverage from the folks at FOX.  Crooks & Liars recounts the crazy as New America Foundation's Jim Pinkerton plays the "politically motivated with hunt" card.

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"White House Anti-Fox News Bias:  Now There's Proof" the FOX chyron screams, while host Jon Scott is shocked -- SHOCKED! -- that anyone would equate FOX News to News of The World, just because they have the same parent company.

And you can bet the rest of the network's host will be breaking out the cries of "witch hunt" and "vendetta" and "Obama's enemies list" over the next week and probably for the foreseeable future.  Count on it.

The Netflix Conundrum: No Good Answers Yet

Here is an excellent article in which a journalist puts the tough question to Netflix: why?  The funny thing is, the answer is muddled and circular, and the journalist calls them out on it.  Just tell us why.  If there's a good reason, we'll listen.

So far, there is no good reason.

A 60% hike means they come out ahead if they lose half of the customers who subscribe to this type of service.  There is debate about whether they want to demolish DVD supplies, but Netflix denies this is the case.  They claim to be surprised by the amount of DVD demand (really??) and without any valid math to back it up say this is the best way to service their customers.

The one point I have to agree with is that it's no longer an excellent value.  I understand business and supply and demand.  To raise prices so sharply without explanation and without even a token offering of improved service is inviting a backlash like the one we are seeing.  There has been no official promise to expand streaming choices.

Netflix had better come up with something soon, or they could be reduced to a cautionary tale of killing the golden goose.

A Grand Fork-Up If I Ever Saw One

From Yahoo News:

Meet John Rolczynski: The Grand Forks, N.D., resident has been trying to tell his legislators that an error in the state's founding document means that technically, North Dakota is not a state.
Sounds like the ravings of a grumpy old man, but as it turns out, Rolczynski was right. News of uncertain statehood has put North Dakota in the spotlight and garnered big buzz.
Here's the story: Back in 1889, North Dakota was carved out of the Dakota Territory and admitted to the Union at the same time as South Dakota. Or so everyone thought.
But the state founders who drafted the constitution left out the key requirement that the governor and other top officials take an oath of office, putting the state constitution in conflict with the federal one. So Rolczynski has been arguing for the last 16 years that the omission made the state illegitimate.

The thing is... he is right.  Senator Tim Mathern has made steps to correct it once and for all.  It's amazing to think something of this magnitude went undiscovered all this time.  I guess it's a reminder that no matter how incredible it may seem, everything should be checked out with an open mind.  Speaking of open mind, the correction has to be put to a vote.  Worst case scenario, this could get really weird really fast.

There also appears to be an issue with the state's eastern border.  More to follow.

No Dealing On The Debt Ceiling, Part 38

GOP Sen. Tom Coburn of Oklahoma has decided he's had enough of this debt ceiling nonsense burning up Washington, so he's deciding to put the fire out with 30 metric gigatons of hyper-flammable extra-explosive napalm.

Republican Senator Tom Coburn said he will unveil a plan tomorrow that would cut $9 trillion from the federal budget over the next 10 years in an effort to curb spending and avoid a default on U.S. debt.

While he said he doesn’t expect his plan to pass Congress, it would offer a wide range of spending cuts and revenue increases that could be used as the basis for bipartisan negotiations on a budget compromise.

“We have $9 trillion worth of savings that are achievable over the next ten years,” Coburn said on CBS’s “Face the Nation” program. “Pick half of them. Half of them solve our problems.”

With Washington deadlocked on a strategy to cut spending and raise the nation’s borrowing limit before an Aug. 2 deadline, the Oklahoma Republican said he will offer a 10-year plan that cuts defense by $1 trillion, makes changes to Social Security and Medicare, and raises $1 trillion through changes in the tax code, among other things.

Some Republicans, including Senate Minority Whip Jon Kyl of Arizona, have resisted any talk of tax increases as part of a budget deal.

“We should focus on the real problem, the spike in spending, and not this phony problem of taxes,” Kyl said on ABC’s “This Week” program. 

It's a great plan, since President Obama showed the GOP is completely uninterested in $4 trillion in deficit reduction, Coburn's plan to shave $9 trillion by closing tax loopholes and cutting defense spending will show the GOP is even less serious about deficit reduction than before.

Not sure what Coburn's doing here other than to show the country just how good the GOP is at wasting everyone's time, but there you are.

Laughing All The Way To Gringott's Bank

The final Harry Potter film has broken all kinds of records this weekend, and Warner Bros. isn't complaining one bit.

Harry Potter and the Deathly Hallows, Part 2,” the final movie in the series based on J.K. Rowling’s books about a boy wizard, opened with a record $168.6 million in weekend ticket sales in the U.S. and Canada.

The film, in which the title character meets his nemesis Lord Voldemort in a final showdown, also set records of $43.5 million for midnight showings and $92.1 million in single-day sales on July 15, researcher Box-Office said today in an e-mailed statement.

“Deathly Hallows 2” ends a series that has generated more than $6.62 billion in worldwide ticket sales for Warner Bros. as of July 15, according to Box Office Mojo. The film, the first in the series to be shown completely in 3-D, is getting a lift from higher prices charged for the three-dimensional format and its placement in more Imax theaters.

The film’s performance was “phenomenal,” said Brandon Gray, editor of, a website that tracks box- office performance. 

Yeah, back that up.  The Harry Potter film series has grossed $6.62 billion, and will certainly top $7 billion before it ends.  Now that's some serious magic in the works folks, and Warner Bros. is going to be sad it's gone.

Me, I'm waiting for the inevitable Blu-Ray box set.  Preferably on a day Amazon decides to have one of their little massive sales.

Nuked Gingrich, Part 7

Well, we've discovered where Newt Gingrich is leaking campaign money like a sieve from.

Newt Gingrich's presidential campaign is over $1 million in debt, nearly half of which -- $451,946 -- is attributable to his preference for private jets.

That's how much the Gingrich campaign owes to Moby Dick Airways, the same company he used for flights paid for by his former 527 group, American Solutions. In April, May and June of last year, American Solutions gave $677,539 to Moby Dick Airways.

Adding in the $41,453 and $10,478 payments Gingrich's campaign already made to Moby Dick in April and May brings the total amount he paid the private plane company over the half-million mark. His list of campaign expenditures includes 30 separate travel-related payments, most of them for thousands of dollars each.

For comparison, Dave Weigel looks at the travel expenses of the Tim Pawlenty campaign, which total just $11,554.90 to airline companies, most of them commercial airliners.

No wonder Newt is so eager to keep tax deductions for private jets.  He apparently uses them to go freakin' everywhere.

Hey folks, can we stop pretending Newt Gingrich's campaign is anything other than "completely over" now?


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