Category Archives: Social values

Quelle Surprise! Tax Increases on Rich Do Not Lead to Exodus

A solid paper by Cristobal Young and Charles Varner, “Millionaire Migration and State Taxation of Top Incomes” (hat tip Matt) helps debunk the idea that high income individuals will pull up stakes if their taxes go up. The case study is an interesting one: New Jersey’s tax increases on top earners. New Jersey made the biggest increase of all US states, and also has the distinction of having a low income tax state (Connecticut) nearby, meaning that tax-sensitive residents had an option of moving not all that far to escape the increase, which presumably would allow them to maintain family ties.

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The study results might be labeled “Millionaires are People Too.”

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Tom Ferguson: Memo to Obama – Anything but Democracy Now for Egypt is Building on Sand

By Tom Ferguson, Professor of Political Science at the University of Massachusetts, Boston, and a Roosevelt Institute Senior Fellow. Cross posted from New Deal 2.0

Food and oil prices are rising as tension in Cairo is soaring — time to get on board with the people’s demands.

Add Barack Obama to the long list of statesmen who couldn’t solve the Riddle of the Sphinx. For a while last week it looked like a miracle was happening: The United States was on the verge of doing right and doing well at the same time. After stumbling initially, the administration openly warned the Egyptian army and government not to slaughter the protesters. It also started lining up behind the Egyptian people’s demands for a swift transition to a new, more democratic regime. Neo-con lions like Robert Kagan and Elliott Abrams bedded down with liberal internationalist lambs in a “Working Group on Egypt” that called for reforms and Mubarak’s exit, while John McCain and other Republicans offered bipartisan cover for Real Change in the world’s oldest civilization.

But by Saturday, February 5, the wheels started coming off.

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The IMF’s Epic Fail on Egypt

Over the last week, we’ve had the spectacle of the Western media speculating about what is going on in Egypt in the absence of much understanding of the forces at work (this article by Paul Amar is a notable exception).

Needless to say, there has also been a great deal of consternation as to how the West’s supposedly vaunted intelligence apparatus failed to see this one coming. This lapse is as bad as the inability to foresee the collapse of the Soviet Union (it’s arguably worse: a lot of people profited from the Cold War, and they’d have every reason to fan fears and thus look for evidence that would support the idea that the USSR was a formidable threat. By contrast, one would think that conveying word that the domestic situation in Egypt was charged would have led to more intense scrutiny which ought to have served some interests (like various consultants and analysts). That suggests the US was so wedded to Mubarak that anyone who dared say his regime was at risk would get “shoot the messenger” treatment, and thus nary a discouraging word was conveyed).

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Reagonomics Was Pro Business, Not Pro “Market”: We Speak on Real News Network

The centenary of Reagan’s birth is providing an excuse for trotting out a lot of hoary old myths and selective history about the 40th president. We gave a bit of an antidote on the Real News Network.

As much as I thought this clip came out well, I have a minor quibble, and wished the folks at Real News Network had not invoked the expression “free market” in the headline on their site. It’s a dangerous bit of propaganda, a malleable, often slippery concept (per Lewis Carroll’s Humpty Dumpty “It means just what I choose it to mean—neither more nor less”) and is rife with internal contradictions (see our long form discussion in ECONNED for details). The equivalent expression in the 1960s was “free enterprise” and that conveyed far more accurately whose interests were really served by the sort of liberalization being sought.

Enjoy!

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Pete Peterson Using High School Courses As Trojan Horse for Anti-Social Security, Medicare Propaganda

It’s not a pretty spectacle when a very rich man tells little people they ought to get by with less, particularly when his firm benefitted handsomely from the pump and dump operation that led to the financial crisis.

Pete Peterson, one of the two founders of the Blackstone Group, has had a longstanding campaign against Social Security and Medicare. He’s sufficiently aggressive that to combat consistent poll ratings that show that both programs enjoy substantial support, his foundation set out to generate different survey results by stacking the deck heavily in its favor. As we recounted last July:

For those who did not catch wind of it, the Peterson Foundation, which has long had Social Security and Medicare in its crosshairs, held a bizarre set of 19 faux town hall meetings over the previous weekend to scare participants into compliance and then collect the resulting distorted survey data, presumably to use in a wider PR campaign.

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Marshall Auerback: Plan B for Health Care Reform – It’s Called ‘Medicare for All’

By Marshall Auerback, a portfolio strategist and hedge fund manager who writes at New Deal 2.0. If we’re forced back to square one by the Supreme Court, why not get it right? My colleague, Bo Cutter, has noted the likelihood of continued challenges to health care reform in the wake of the recent Florida State […]

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Croesus Watch: Banker Pay Levitates to New Highs

Oh, I need a new round of black humor as a coping device to deal with the predictable but nevertheless disheartening news that banksters are getting record pay for 2010, after having gotten record pay for 2009…after having wrecked the global economy.

If this isn’t incentivizing destructive behavior, I’d like you to suggest how we could make this picture worse. A newspaper ad for the swaps salesman that tanked the most municipalities? Ticker tape parades for the deal structurer that was best at pulling most fees out of clients in ways they wouldn’t detect? (Oh wait, you’d have to include pretty much every derivative salesman) Honorable mention for the banker with the biggest expense account charges in the industry? (Oh wait, that’s not the right metric, we learned in Inside Job that the drugs and hookers get charged to research budgets. Damn).

My pet joke from the dot bomb era scandals is now looking a bit tired:

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8 PM EST Watch Dylan Ratigan Town Hall Session on Jobs, Innovation

Check in here at 8 PM to watch the Dylan Ratigan “Innovation in America” panel discussion as part of its Steel On Wheels Tour tonight at 8pm EST at the University of Denver.

The panel will include Andrew Jenks, from MTV’s World of Jenks, Nicole Glaros, Managing Director of TechStars Boulder, and Matt Miller of The Washington Post and host of Left, Right & Center.

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The FCIC, in Lockstep with the Officialdom, Refuses to Use the “C” Word

The Financial Crisis Inquiry Commission report increasingly looks like a whitewash. Even though the commission has made referrals for criminal prosecution, you’d never know that reading its end product. The references to “fraud” and “crime” are sparing, and ex mention of the SEC’s fraud investigation of Goldman, consist almost entirely of mortgage fraud, which is the FBI’s notion of “fraud for profit” or “fraud for housing”, meaning borrower fraud. The book also acknowledges the fraudulent lending by firms that were prosecuted like Ameriquest. In other words, the notion that the TBTF firms might have engaged in less than savory activity is remarkably absent from the report.

The FCIC has also been unduly close-lipped about their criminal referrals, refusing to say how many they made or giving a high-level description of the type of activities they encouraged prosecutors to investigate. By contrast, the Valukas report on the Lehman bankruptcy discussed in some detail whether it thought civil or criminal charges could be brought against Lehman CEO Richard Fuld and chief financial officers chiefs Chris O’Meara, Erin Callan and Ian I Lowitt, and accounting firm Ernst & Young. If a report prepared in a private sector action can discuss liability and name names, why is the public not entitled to at least some general disclosure on possible criminal actions coming out of a taxpayer funded effort? Or is it that the referrals were merely to burnish the image of the report, and are expected to die a speedy death?

Matt Stoller provides further support for the cynical take. Via e-mail:

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American Lose Faith in Pretty Much All Big Organizations, Especially Banks and Corporations

The Financial Times reports on an international poll by the consulting firm Edelman to be presented at Davos on Wednesday on public trust in various types of institutions. The interesting finding is that Americans are becoming less confident in all types of organizations, which is contrary to the trend in most other nations, where perceptions are rising.

And perhaps most important, the poll was of people most likely to have a favorable view of the current power structure, namely, 5000 well schooled, wealthy and “well informed” participants (does “well informed” mean they read the oracles of orthodox opinion, like the Economist and the New York Times?). If the people who are likely to be beneficiaries of the status quo aren’t too happy with it, imagine what the average Joe thinks.

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The Dangers of the Investment Bank Franchise Model

Tony Jackson of the Financial Times has an article tonight on a topic near and dear to my heart, namely the fact that higher capital ratios will not lead investment banks, um, banks, to change their highly profitable “wreck the economy” behavior. He focuses on the role of how the change from the partnership model has turned investment bankers into mercenaries (and one might add, mercenaries willing and able to foment precisely the sort of trouble in which they can then intervene):

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Outsized Pay on Wall Street Persists

A piece at Bloomberg today confirms that the financial crisis did nothing to shift the gap between what someone can earn on Wall Street versus more worthwhile lines of work:

Wall Street traders discouraged by declining bonuses this month can take solace: They still earn much more than brain surgeons and top U.S. generals.

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