No Taxation Without Repre...You Know What, Just No Taxation

How is it possible that it's far easier for a municipality to declare bankruptcy than it is to raise taxes, to the point where Chapter 9 bankruptcy isn't just the first choice, but the only choice?  Everywhere in this article I see people saying how the city of Hamtramck, Michigan can't possibly cut any more, that bankruptcy is the only option, and that bankruptcy will be used to cut as much out of city workers' contracts as possible, according to William Cooper, City Manager.

Although Mr. Cooper says he believes bankruptcy, which could allow the city to “start over” with its labor contracts, is the only solution, the authorities in the state of Michigan have so far rejected the city’s request that the governor issue an executive order allowing Hamtramck to file for bankruptcy. An official from the state’s Treasury Department said that no city in Michigan has gone through bankruptcy, and that the governor has no such authority; the state has specific provisions for authorizing a bankruptcy filing, including intervention from an emergency financial manager and an emergency loan board. The current administration, which will be departing later this week, has urged Hamtramck to seek state assistance, including a possible emergency loan. 

But nowhere in the entire article is the concept of raising taxes even brought up.  Property tax revenue forecasts are simply "anemic" like they are a victim of a permanently fixed rate.

It's like raising taxes simply doesn't exist anymore.  Hamtramck would rather be the first city in Michigan history to declare bankruptcy and use it as an excuse to arbitrarily take money away from its employees than kick up the mill rate on property taxes in the city.  This is broken economics.  You can never, ever, ever raise taxes?  Seriously?

We live in an era where the people who get shot at, the people who run into burning buildings, the people who teach our kids and the people who fix our roads are not actual human beings with families and who pay taxes too mind you, but are seen as some sort of public blight on the landscape that must be eliminated, like they are society's punishment for having a civilization.  We tolerate them at best and at worst, rise against them and say "you will pay for this.  Not all of us.  Just you."  Exactly who provides these services if we refuse to pay for them?

Except in the end we all indeed pay for it, one way or another.

An Admirable Effort

For all the "haters gonna hate" rhetoric about how Barack Obama is universally despised by most Americans, the reality is outside the right-wng echo chamber he continues to be the most admired man in America by a massive margin in Gallup's yearly poll.




Obama's numbers equal 2-10 combined.  Most sitting Presidents do well in this category, but Obama certainly has done better than most.  And among Republicans, Obama still came in second behind Dubya.

On the women's side, Hillary Clinton continues to dominate.



A total of 15 #1 rankings on this list since 1992 for her.  Palin placed third among independents and first among Republicans, while Clinton came in number one with Dems and independents, and third with Republicans (!)

For all the flack that Obama takes from the beltway set, he's still pretty well respected and admired by average Americans.

(But really, the entire country?  Beck over the Dalai Lama?  Really?)

The $100 Billion Question

What will Orange Julius slice from the budget to keep his $100 billion spending reduction promise?  Here's a hint:  it's not going to be from defense.

Republicans view their midterm electoral victory as a mandate to cut spending, and cutting $100 billion from a $3 trillion federal budget sounds like a reasonable goal.

But GOP leaders say they will focus only on non-security discretionary spending, and won't slash funding for defense, Social Security or Medicare.

That makes their task a lot harder.

Cutting non-security discretionary funds by $100 billion means a 21% annual reduction in the part of the budget that includes funding for education, health and human services and housing and urban development, among other things, according to the Center on Budget and Policy Priorities, a liberal think tank.

In other words, the sacred cows of domestic Democratic policy.

Asked which programs will be cut to get to the $100 billion target, Boehner did not offer specifics.

"But I will tell you," he told reporters earlier this month. "We are going to cut spending."

No specifics of course.  That whole 20% across the board axed from social spending isn't going to make the GOP real popular, either. Especially in this economy.  Back in July, Republicans said that cutting Pentagon spending was no longer off the table, or at least Ron Paul thought it was necessary.  Of course, that was never going to happen.

So, in this economy, Republicans see their first order of business as piling on the pain on the American people (and more tax cuts!)  Let's see those specifics, guys.  Who's getting the axe?

My guess is going to be those spending cuts are going to be a lot less than $100 billion, especially for anybody with 2012 aspirations.  Of course, that would explain why most of your 2012 GOP prospective candidates are out of office right now, but all the GOP House will be facing voters again in two years as well.  Somehow I don't think those specifics are ever going to materialize.

Well About This Time, Boss Hogg Realized He Was In A Heap Of Trouble

Josh Marshall weighs Mississippi GOP Gov. Haley Barbour's Presidential chances in 2012, and wants to know why anyone inside DC thinks anyone outside DC is even remotely considering the guy for anything other than Fastest 2012 Campaign To Crash And Burn.

In the wake of Haley Barbour's Jim Crow face plant last week various commentators are weighing in to take stock of whether it's a bump in the road or the end of his hopes of running for president in 2012.

Back on Planet Earth, though, a different story can be told.

Let's state it flat out. You have to be deeply, securely, and no doubt permanently encased in the DC cocoon ever to have thought that Haley Barbour was a serious presidential candidate. Really, people. Any number of things would have to change to make Barbour a remotely credible presidential candidate -- starting with erasing the image of Boss Hogg from the cultural memory of every American over the age of 30. And that would probably be one of the easier tasks on the list.

On first blush you might say, how is the Governor of Mississippi a creation of the DC cocoon? But the governor gig is just a recent flourish. Barbour made his career -- and a very impressive one on its own terms -- as an establishment Republican political operative and high-powered DC lobbyist. He co-founded one of the most powerful lobbying firms in the city -- now BGR Group, formerly Barbour Griffith & Rogers. And he's brought that high-flying lifestyle -- sometimes literally -- to the governor's mansion in Mississippi, one of the poorest state's in the union. Every elite journalist in DC knows Barbour -- many of them socially and over a long period of time because as you can see from his demeanor glad-handing is a big part of the guy's charm. And the same applies to pretty much everyone else from the city's power grid.

With everyone in Washington knowing him, why shouldn't he run for president? Everybody likes him. He's had a successful career. He's the governor of a state. So why not? What could go wrong?

Personally, Sarah Palin has a better shot than Haley Barbour.  And that's really, really saying something.  Barbour still has a lot of lobbyist/insider cred among the Village, so much so that people are still asking the "does he have a shot?" question seriously.

The answer is an unqualified "No way in hell."  This is Village Fail 101 that anyone is even remotely taking this clown seriously. 

Playing High Stakes 1 Vs. 100

Barry Ritholtz flags this story down about smaller TARP banks now on the edge of survival.

The WSJ reports today that nearly 100 U.S. banks that got TARP funds from the federal government in Q4 2008 are in danger of going bankrupt.

So far, 7 bailout recipients have failed, resulting in more than $2.7 billion in lost TARP funds. The balance of the remaining potential failures relatively small banks — the median size was $439 million in assets, and the median TARP infusion was $10 million apiece.

People forget that TARP helped a lot of smaller regional and community banks too.  While the big banks that got the most largess turned it around, the smaller banks got only what they needed to survive at the time.  The problem is the commercial real estate market (the bread and butter of smaller community banks) is still in deep crap.

The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.

When TARP was created in the heat of the financial crisis, government officials said it would help only healthy banks. The depth of today’s problems for some of the institutions, however, suggests that a number of them were in parlous shape from the beginning.

Nobody could have guessed, etc.  You know, except for anyone who was paying attention to this mess, and the fact that it would lead to bank consolidation by attrition, as I've been saying for 18 months now.  Commercial vacancy rates are expected to peak this spring, but that's cold comfort to the smaller banks right now.

2011 is going to be an ugly year for smaller banks.

Zandar's Thought Of The Day

So yes, we've just seen the most productive Congress in nearly 50 years draw to a close:

There is no debate, however, that the 111th Congress passed a historic volume of substantial legislation, whatever one might think about the merits of these achievements. Historian Alan Brinkley told Bloomberg yesterday that “[t]his is probably the most productive session of Congress since at least the ’60s,” for an article outlining the historic achievements of this session:

For the first time since President Theodore Roosevelt began the quest for a national health-care system more than 100 years ago, the Democrat-led House and Senate took the biggest step toward achieving that goal by giving 32 million Americans access to insurance. Congress rewrote the rules for Wall Street in the most comprehensive way since the Great Depression. It spent more than $1.67 trillion to revive an economy on the verge of a depression, including tax cuts for most Americans, jobs for more than 3 million, construction of roads and bridges and investment in alternative energy; ended an almost two-decade ban against openly gay men and women serving in the military, and today ratified a nuclear arms reduction treaty with Russia.

In addition to these headline achievements, the 111th Congress also:

– Passed the Lily Ledbetter Fair Pay Act, making it easier for women and other minorities to file equal-pay discrimination lawsuits.

– Overhauled the federal student loan system, eliminating billions of dollars of waste being paid to for-profit loan companies while expanding access to loans, especially for low-income students.

– Confirmed two Supreme Court nominees.

– Passed legislation to help Sept. 11 first responders deal with ongoing health problems.
– Expanded the Children’s Health Insurance Program to include an additional 4 million children and pregnant women, after the Bush administration denied funding increases for years.

– Passed child nutrition legislation, which expands the federal school lunch program and improves the quality of the meals.

– Enacted food safety legislation, which intends to improve safety measures and prevent food-borne illnesses.

– Approved a settlement for black and Native American farmers that were subject to discrimination by the USDA.

– Passed legislation strengthening the prosecution of hate crimes.

– Passed pro-consumer legislation further regulating abusive practices of credit card companies.

Brinkley also noted these achievements are “all the more impressive given how polarized the Congress has been.”

And yes, this Congress made a huge dent in the decades-long backlog of progressive legislation in this country.

The downside of that is the 111th Congress showed just how tremendously large that backlog has been allowed to become since the 60's.  Getting all that corrected in just two years was always going to be impossible.  Obama did over-promise, in some cases substantially (Gitmo, Iraq, Afghanistan, the stimulus).  He also came through on a number of things that were left for dead.

All of this will seem like the good times compared to the 112th Congress, however.

The New Definition Of Miller Time

Joe Miller, that is.  And that new definition:  taking time to build a windmill to tilt at.

Republican Senate candidate Joe Miller said late Sunday he is dropping his opposition to incumbent Lisa Murkowski being certified as winner in the Alaska Senate race, but will continue with a federal lawsuit.


"After careful consideration and seeking the counsel of people whose opinion I respect and trust, I have decided that the federal case must go forward. The integrity of the election is vital and ultimately the rule of law must be our standard," Miller said in a statement. "Nevertheless, I have also decided to withdraw our opposition to the certification of the election, ensuring that Alaska will have its full delegation seated when the 112th Congress convenes next month."

Last week, the Alaska Supreme Court ruled against Miller in his appeal, denying his claim that state law was not followed on counting write-in votes.

In the ruling, the Alaska Supreme Court affirmed the decision of the superior court, saying, "There are no remaining issues raised by Miller that prevent this election from being certified." At the time, a spokesman for Miller's campaign said they were "disappointed" with the decision.

"We are disappointed the Alaska Supreme Court has ignored the plain text of Alaska law and allowed the Division of Elections to effectively amend the state election code without even giving the public an opportunity for notice and comment," Miller spokesman Randy DeSoto said in a statement Wednesday.

I have no idea what Miller intends to accomplish with his federal case unless he's trying for Democrat Mark Begich's Senate seat in 2014 (quite possible).

There's also my half tongue-in-cheek proposal that Miller's goal here is to somehow make direct statewide elections of a Senator so ridiculous that it will somehow spark a backlash against the 17th Amendment's direct election of Senators.  I think it's much more likely that it will spark a backlash against Joe Miller, but there's got to be some method to the madness here, especially if he's giving up.

Most likely he is indeed trying to get Alaska voting laws changed, and has no problems with getting an appellate court or even SCOTUS involved in some national precedent designed to make voting more difficult.  Keep an eye on Joey Bag of Crazy here.

Zandar's 2010 Scorecard

Time to take a look at my 2010 predictions to see how I did.  Here's what I said would happen in 2010:

1. Democrats maintain control of the House and Senate.  The teabaggery is just too much for the middle to take and Republicans filibustering the jobs bill is just too much. Harry Reid and Chris Dodd lose however.
   
2. Thompson Prison in Illinois gets some Gitmo inmates.  The plan to close Gitmo proceeds...slowly.
3. Health care reform passes, but gets tied up in court immediately by Republicans and threatened by state efforts to nullify the law.
4. Cap and Trade dies.  It will however be the major fight in 2011.
5. Unemployment in 2010 will hit 11% at some point.  It won't be pretty.
6. Apple releases the iTablet...and nobody cares.  Also, the iPhone will be released on other networks besides AT&T.
7. Tim Geithner gets fired.  Yeah I know, I said this last year, but c'mon.
8. The stock market will turn back down again and the Dow will close under 10k on Dec 31, 2011.
9. Obama will sign another stimulus for states facing massive budget holes.
10. This blog will roll on for another year.

By my count, that's half a point, miss, called it!, called that too, not quite, major miss, nope, odds are damn good I'm wrong, he sure did, and yes.

Four and a half out of ten is still not great, but better than my two for ten performance last year.  Going into 2011 and a GOP House, I'm going to take a little more care this week to work up more realistic predictions for the 31st.

We'll see.

Having A Job To Tell Them To Take And Shove

Many of us are grateful to have jobs...but it doesn't mean we like them, either.  Five out of six American workers say they will be looking for a better job in 2011, a major increase from last year's three out of five.

Most employees have sat tight through the recession, not even considering other jobs because so few firms were hiring. For the past few years, the Labor Department's quits rate, which serves as a barometer of workers' ability to change jobs, has hovered near an all-time low.

But after years of increased work and frozen compensation, "a lot of people will be looking because they're disappointed with their current jobs," said Paul Bernard, a veteran executive coach and career management advisor who runs his own firm.

Douglas Matthews, president and chief operating officer for Right Management, a division of Manpower, called the results "a wake-up call to management. ... This finding is more about employee dissatisfaction and discontent than projected turnover," he said.

Despite a disappointing jobs report last month, experts agree that the employment picture will likely improve going forward, although hiring will be slow. 

That's both good and bad news, depending on if employers are looking to add jobs in 2011.  If, as I expect, jobs remain relatively flat and more people are joining the job-seeking market, that will mean a solid bump up in the unemployment rate, most likely above the 10% mark.

I'm still going with housing prices continuing their fall through 2011 as the Foreclosuregate mess continues.  That's going to put a big squeeze on consumers this year, and it's not going to help growth or demand as we could be in for another round of belt-tightening.

StupidiNews!

• A major blizzard continues to dump snow from Delaware to Maine today, dumping as much as 2 feet of snow in some spots.
• With the explosion of an Indian satellite rocket over the weekend, the country's space program appears to be turning toward commercial sources.
• With the SEC tied up with thousands of firms to inspect, cash-strapped states are eager to try to recover money from financial bad guys.
• The East Coast blizzard may have put a big dent in after Christmas deal shopping...
• ...But that may be driving more people to shop online deals this year.

Last Call

Every now and again, fate gives you a second chance.  Even in Washington.

Robin C. Ashton, the woman Attorney General Eric Holder just named to head of the Justice Department's internal ethics office, was reportedly herself a victim of improper politicization during the Bush administration at the hands of Regent University graduate Monica Goodling.

"As a veteran career prosecutor, Robin is uniquely qualified to serve as Counsel for Professional Responsibility, and I am confident she will lead the office with the highest standards of professionalism, integrity and dedication," Holder said in a statement.

You remember Ms. Goodling, yes?

Goodling, you may recall, arrived at DOJ at the start of the Bush administration after working as an opposition researcher for the Republican National Committee. She graduated from Regent University School of Law, the school founded by Pat Robertson, and believed that part of her job was to bring people with conservative and Christian values to the Justice Department, former colleagues said. She admitted to "crossing the line" and running afoul of civil service rules governing hiring decisions.

She thought her job in the DOJ was to purge the office of anyone who might have been a "democrat" or |"liberal", i.e. anyone to the left of Monica Goodling.   Ashton was only one of Goodling's victims.  Holder's decision shows he's serious about restoring the ethics office to actually meaning something, unlike during the Bush years.

We'll see what she can do.

State Of Decay

George Will grabs his towering hairdo and his dessert tray and unleashes a collective, pre-emptive "Let them eat cake!" when it comes to states facing budget chasms, with intent to simply abrogate the pension contracts of millions of state employees.

The nation's menu of crises caused by governmental malpractice may soon include states coming to Congress as mendicants, seeking relief from the consequences of their choices. Congress should forestall this by passing a bill with a bland title but explosive potential.

Principal author of the Public Employee Pension Transparency Act is Rep. Devin Nunes, a Republican from California, where about 80 cents of every government dollar goes for government employees' pay and benefits. His bill would define the scale of the problem of underfunded state and local government pensions and would notify states not to approach Congress like Oliver Twists, holding out porridge bowls and asking for more.

Corporate pension funds are heavily regulated, including pre-funding requirements. A federal agency, the Pension Benefit Guaranty Corp., copes with insolvent ones. By requiring transparency, the government gave the private sector an incentive to move to defined contributions from defined-benefit plans, which are now primarily luxuries enjoyed by public employees.

Less candor, realism and pre-funding are required of state and municipal governments regarding their pension plans. Nunes's bill would require them to disclose the size of their pension liabilities - and the often-dreamy assumptions behind the calculations. Noncompliant governments would be ineligible for issuing bonds exempt from federal taxation. Furthermore, the bill would stipulate that state and local governments are entirely responsible for their pension obligations and the federal government will provide no bailouts. 

After all, this is the same George Will who scolded the American taxpayer for causing the financial crisis in the first place, so his latest paean to tough economic love to screw millions of little people out of their pensions should come as no surprise.

So what would happen if states simply stripped state employees of their pensions?  Exactly what would then do then?  Work longer at their state jobs?  Quit?  Everyone seems to be eager to do this, but nobody seems to have a plan for doing so without piling the burden onto Social Security or Medicare. 

Of course, maybe that's the plan.  Force them onto Social Security and Medicare, then make cuts across the board on those programs so everybody shares the pain.

Oh what, you thought that only government employees were going to be hurt in this crossfire?  I'm sure that's what George Will wants you to think.

A Painfully Mysterious Problem

So, on one hand we have Sen. Tom "I block 9/11 first responders from getting health care" Coburn predicting doom unless spending is cut immediately.

Coburn, who said throughout the interview he was not trying to "scare" Americans with his rhetoric on the deficit, was then asked to give his worst-case scenario outlook for the American economy.

"I think you'll see 15 to 18 percent unemployment rate. I think you'll see a 8 to 9 percent decline in GDP. I think you'll see the middle class destroyed," Coburn said.

"The people it will harm the most will be the poorest of the poor," adding that he believed hyper-inflation could contribute to the degradation of the American way of life.

On the other hand, we've got actual inflation numbers showing Coburn wouldn't know what he was talking about if he had a team of rocket scientists explaining things to him, as Steve Benen explains.

Apparently, as Coburn sees it, spending will lead to inflation, which will lead to "apocalyptic pain," especially for lower-income Americans. The solution, then, is to take capital out of the economy by slashing public spending, much of which benefits lower-income Americans, deliberately slowing already-weak economic growth.

I just don't know what planet Coburn is living on. The right-wing Oklahoman, best known for his recent fight against health benefits for 9/11 first responders, may not realize it, but the inflationary threat -- the one that he thinks would lead to 18% unemployment at a 9% drop in GDP -- doesn't exist. When the most recent economic figures were released, showing GDP growth at a severely underwhelming 2.6%, there was scarcely any inflation at all. Indeed, as of a month ago, core inflation was at its lowest levels since officials starting keeping track over a half-century ago.

On the gripping hand, we are seeing major speculative action in commodities right now, particularly basic foodstuffs like sugar and other commodities like oil (not to mention gold and silver). So we are seeing price rises, but they are being caused by market speculation, not demand.  Remember $140+ a barrel oil in 2007?

Same thing appears to be happening again.  There's no fundamental reason for these massive shifts in price.  It's just another Big Casino game being played with taxpayer money and backed by moral hazard.

And Coburn's very quick to blame the taxpayer for causing the problem.  Either way, we're the ones who will have to pay.

Not Quite Your Average Joe

Keep an eye on GOP Rep. Joe Walsh from IL-8.  If you're looking for somebody who personifies the Teabagger Paradox perfectly, the suburban business consultant turned politician is your man.

Mr. Walsh, 48, will get about $1.4 million annually to run his operation and plans as many as three district branches. He’ll sleep in his office in Washington, while his family stays here in McHenry. And get this: he’s turned down the usual congressional health care, pension and retirement packages.

“I don’t think congressmen should get pensions or cushy health care plans,” he said. His wife is not exhilarated with the latter decision; she has a pre-existing medical condition and is now forced to hunt for a plan.

Mr. Walsh had an initial campaign debt of about $90,000. That soared several fold because of legal bills related to a lengthy recount battle. A New Year’s Eve party at the Lakemoor Banquet Hall will raise money for a congressman-elect happy to take checks from lobbyists and political action committees.

“If JPMorgan Chase wants to give me money, fine,” he said.

It’s no surprise that he’s unhappy with the tax deal congressional Republicans cut with President Obama. “We cut taxes, raised spending and contributed to the deficit,” he said. “Republicans should have held out for something better.”

His legislative goals are repealing Mr. Obama’s health care legislation and seeking major changes in Social Security and Medicare. I asked if reducing the size, scope and power of government is a means to an end or an end in itself.

“An end in itself,” he said, without pausing. “I think we were sent to D.C. to cut spending and grow the economy. We have to talk about cutting real programs” — and agencies — “like the Department of Energy and Department of Education.”

One of the first votes he’ll confront is on raising the federal debt ceiling. Many economists warn that voting down an increase would be a mistake, and the House Republican leadership agrees. Mr. Walsh will vote against it. “On principle and policy, the leadership is wrong,” he said. “This is a teachable moment on my part.” 

The Club For Growth guys must have wet dreams about cloning Joe Walsh and replacing as much of Congress as possible with them.   Don't kid yourself about what "major changes" to Medicare and Social Security means, either.  He goes on to say he has no intention of working with Democrats, and that governing through anger is the way to go, saying he's "absolutely" prepared to lose in 2012 if it means he was instrumental in shredding the safety net, blowing up the country's credit rating, and dismantling as many executive branch agencies as possible.

Sure, he gets credit for not taking government health care or pension programs.  But this guy is a fanatic, plain and simple.  He'll take all the corporate lobbying cash he can get his hands on to wreck the lives of the very people who sent him to Washington:  blue state seniors.

After all, anyone who outright says that the middle class has it too good in America is not exactly going to be on the side of working class or fixed income Americans.

Ebony And Ivory Coast, Part 2

Some 14,000 Ivorians have fled Ivory Coast for Liberia as Africa's next big refugee nightmare begins to take shape.

People are walking several hours or days before they get on barges to the rivers bordering the West African nations, the U.N. high commissioner for refugees said.

A few deaths have been reported among the refugees, including a child who drowned during the crossing of the Cestos River into Butuo. Observers are seeing malnourished children and people with malaria, respiratory infections and diarrhea.

"We are referring the most severe cases to Saclepea, a five-hour drive on very rough roads. In some locations without ambulances we are transferring the patients on board UNHCR vehicles," the agency said in a statement.

"Some are arriving with severely swollen feet, like a 75-year-old man whom we transferred from Butuo, one of the main entry points into Liberia. Some families said they had walked three to four days through the bush with little food."

The displacement is the fallout of the November 28 presidential runoff, after which the country's Independent Electoral Commission named opposition leader Alassane Ouattara the winner. But its Constitutional Council invalidated those results and declared that incumbent President Laurent Gbagbo won.

The country has been paralyzed by a political stalemate and scores of people have died in violence there.  International powers, such as the United States, the United Nations, and the African Union have recognized Ouattara as the winner and are urging Gbagbo to cede power.

Leaders from the Economic Community of West African States on Friday warned they will not hesitate to use "legitimate force" to defuse the crisis if Gbagbo fails to step down.

Some perspective to keep in mind this holiday season, and there's a lesson to be grateful for what we do have in America, even those of us who have little or nothing.