The Great GOP Tax Hike of 2011

On Edit: The Monday following the Great S&P Downgrade.

At the moment, it looks as if I was way wrong.

Short terms, anyway. It looks as if my prediction was miles off the mark - t-bill rates seem to be holding steady, or even dropping as investor money flees the stock market and looks for the best bet in town.

At this point, it looks as if the market has shown us just how wrong S&P was in down grading treasuries.

We'll have to await developments, of course, including the t-bill auctions later this week.

For the moment, though, it looks like I swung at and missed a wild pitch....

Originally posted:

The Republican party has thrown our ability and willingness to pay our obligations into question, world-wide. An increase in perceive credit risk, regardless of the credit rating, will drive our nation's cost of borrowing up. (See, also, my blog just before this.)

Short term t-bill rates have been volatile, with investors demanding higher yields on already issued t-bills. There will be an auction on Monday - we'll get a feel then as to just how the GOP caused crisis will cost us all, directly and indirectly.

If T-bill rates go up, all lending rates will go up (except for the relatively tiny amount of "fixed rate" loans currently outstanding:)

Which means:

• Increased credit card rates;
• Increased rates on variable rate mortgages;
• New loans will be more expensive - for everyone ;
• Companies borrowing to bring in inventory will be paying more and passing that cost on to consumers;
• Oil drilling companies, transportation companies and refiners will all be paying more to finance their activities - and passing that cost onto consumers;
• Inter-bank lending will become more expensive, driving up the cost of payments made through the bank payments systems - meaning increased bank transaction charges.

I'm sure there's more, but isn't this already too much of a "tax increase" to pay because of the right wing taking our credit hostage to advance their radical and unpopular ideas?

Is Our Goose Already Cooked?

Is Our Country's Sovereign Credit Goose Already Cooked? - Is our cost of credit already sure to rise, with all the consequent increased cost which will end up being taken from the peoples' wallets?

In determining the interest rates for lending, credit ratings are important, but they aren't the sole determinant of credit risk and thus cost of credit. Credit costs depend on how potential "lenders" (in this case treasury bill purchasers) perceive US sovereign debt risk.

The market - the "free markets" - will determine how much risky they perceive US debt to be and the interest rates we have to pay will vary accordingly.

It seems to me that the GOP's battle to the death has already made it likely that our credit is already damaged and we will have to pay more for our sovereign borrowing - we'll have to wait to see how the T-bill auctions go.

A Broken GOP Promise

Less than a year ago, in September 2010, the GOP proudly made a "Pledge to America," containing a number of their promises to the American people.

One of those promises was to not tie unpopular issues to important legislation:

"Advance Legislative Issues One at a Time

"We will end the practice of packaging unpopular bills with "must-pass" legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time."

This entire debt ceiling debate is a complete and blatant repudiation of that promise because the GOP is demanding cuts major programs which help people in desparate need

The GOP is tying unpopular legislation to a must pass bill - and, in doing so, they are trying to circumvent the will and the needs of the American people

Is there any honor in the GOP actions on this critical issue?

Dems For Buddy?

On Edit....

I wrote originally wrote this blog about possibly supporting the Republican dark horse Buddy Roemer -- based on some of his general pronouncements, particularly his opposition to the power of big business over our government.

Well, never mind. I found these positions in one of Buddy Roemer's speeches (the all-caps are his):

WE WILL ELIMINATE THE DEPARTMENT OF ENERGY, AND ALL ENERGY SUBSIDIES (OIL, ETHANOL, GAS, AND UNPROVEN ENERGY TECHNOLOGIES), SAVING THE TAXPAYERS SOME $140 BILLION A YEAR.

Just another anti-government tear-it-down-istas??

Even Adam Smith the "father of modern capitalism" approved of government subsidies to start up industries. (And we won't go into that "unproven energy technologies" bs. Somehow, too many power seekers seem to believe whatever they proclaim, and ignore the reality, such as the proven energy technologies of wind and solar (with tide coming our way.))

It is looking as if he'st another right winger who erroneously thinks that when the founders spoke of limited government, they meant small and weak.

What they meant was, as opposed to a monarch with almost unlimited powers vested in the one person, a limited government is one with (1) the limits which arise internally from the checks and balances among the three branches of government and (1) the limits which arise externally from the power of the citizens to vote.

See more at "limited government," see http://rjw-progressive.blogspot.com/2011/01/what-limited-government-means.html

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He also points firmly in two opposite directions at once, advocating both strong protectionist measures - which we ditched as part of the Reagan Revolution and allowing jobs and production to be shipped overseas (an idea I support) while simultaneously chanting about "free trade."

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Finally, he supports "deregulation of small business." Well, maybe he doesn't know that small business is already excluded from a wide range of regulations.

He shouts (again, his all-caps"):

DEREGULATION OF SMALL BUSINESS IS ANOTHER STEP TO CREATING JOBS, WITH ELIMINATION OF ALL NEW REGULATIONS IMPLEMENTED SINCE JANUARY OF 2008. THERE ARE SOME 80,000 PAGES OF COMMENTS IN THE FEDERAL REGISTRY IN 2010 ALONE.

Note that he seems to be trying to pull a fast one - suggesting that the number of pages of comments in the Fed Reg somehow reflects the number of regulations.

I don't access to the Fed Reg or the tools to measure the relationship of comments to actual regulations. However, part of my practice in the last century was reading the Federal Register everyday to look for an analyze regulations which affected by bank clients. From that experience, I can tell you that the vast bulk of printed material in the Fed Register is made up of comments: comments on potential regulations, comments on proposed regulations, comments on regulations adopted, and comments on regulations which were not adopted.

Elimination of all regs since Obama was elected. Hmmmm. Looks like an unintended admission that he's just another Anti-Obama-ite

And then he proclaims:

REGULATIONS ARE THE NEW TAXES.

Partisan bull pucky! Regulations are the checks and balances on industry and commerce, protecting us against such things as environmental pollution and shady business practices.

Regulations are no more taxes than the Ten Commandment's prohibition that "Thou shalt not steal" is a tax. God is taxing me by prohibiting from building my wealth through theft.

Building a product more cheaply through polluting the environment, or through chicanery, is nothing but theft, the Ten Commandments regulation against it isn't a tax.

BTW, it is an honor to pay taxes, it is patriotic. The anti-tax mania of the Republican party, and it's offspring of questionable parentage, the Tea Party weakens our country.

“I like paying taxes. With them I buy civilization.”

– Justice Oliver Wendell Holmes

"Every tax, however, is, to the person who pays it, a badge, not of slavery, but of liberty."

- Adam Smith, the "Father of Capitalism:"

Yes, maybe regulations increase the cost for a company to do business, but they protect our country and our the society from businesses sticking the public with costs such as pollution-caused disease.

= = = = End Edit

The original post:

As a life long liberal, there is much about today's politics which I lament. I knew in 2008 when I canvased and phone banked and even did data entry for then candidate Obama that, despite the right wing fixation, Obvama was and is no liberal.

I did not expect him to surround himself with Goldman Sachs people and apparently but their investment bankers view of reality. And he seems to have fully embraced corporate power and corporate ideas - perhaps he spent too much time talking to advocates of the Chicago School of Economics when he was at the University of Chicago.

But a dark horse has appeared on the Republican side of the aisle, but he sounds more like a Democrat than do many of today's democrats.

Buddy Roemer.

It has been written that "His platform is twofold. First, he wants to focus on creating jobs by deregulating small businesses, making the country energy independent and cutting back on unfair foreign trade.

"Second, he wants to eradicate the power of special interest money in Washington. Accordingly, he is refusing to accept money from any political action committee, and he has limited the amount of money supporters can donate to $100 a person.",(the DailyCaller, link above)

I have concerns about that bit about "deregulating small business." Small businesses are already excluded from a lot of regulations and I'm concerned that this is just a disguised Republican "regulations are evil" pitch.

(Regulations are nothing more or less than checks and balances on groups of people and commerce. The process of adopting regulations allows plenty of opportunity for business and trade groups to participate and shape the regulations. Regulations are not just some form of random tyrannical pronouncements from faceless bureaucrats.)

And being in favor of "energy independence" is pretty much as bold a position as being in favor of Mother's Day.

There are a lot of details to come, he has mainly voiced solme generalizations, but I'm sure going to be keeping my eye on his campaign.

But who knows, maybe a Republican will finally qualify for my vote for President....

Breitbart on Palin's Undecided

I just ran across an analysis on Andrew Breitbart's Big Hollywood site of the relative success of Sarah Palin's "Undefeated."

Not surprisingly, the "analysis" raves about the box office success of Palin's "Undefeated."

For starters, the "analysis" doesn't discuss the significance of only 10 theaters even willing to show it on the opening weekend. One of the most recognized, high profile politicians could only get 10 theaters? With Murdoch's Fox behind her? Interesting fact and interesting commission from the "analysis."

Using a table listing "Documentaries - Political" the article announces: "'The Undefeated' ranks as #15 in the all-time highest grossing debut category."

Wow!!! In terms of gross, it just edged out the famous documentaries I.O.U.S.A. and America: Freedom to Fascism. I bet you heard as much about them pre-opening as you heard about "the Undefeated," right?

7/24/11:
= = = = Update = = = =
The Undefeated, during its second week in theaters, brought in $24,000 in sales in 14 theaters. The movie’s per theater average, touted as a bright spot by the Breitbart piece, dropped 73%, from $6,513 to S1,714, according to estimates by the industry website Box Office Mojo. (For some reason, that site calculates it as a 63% drop, but I think their calc is based on gross, not gross per screen)

So, you ask, how did other 2nd week movies fare?

"Harry Potter" dropped even more, 71.6%, to "only" $10,986 per screen.

"Winnie the Pooh" dropped 34.6% to only $2,138 on 2145 screens

"Snow Flower and the Secret Fan" increased 47.0% on 61screens to $3,230 per screen

"Tabloid" went up 52.4% on 31 screens to $4,484 per screen

"Life, Above All" went up 29.1% on 10 screens to $1,780 per screen.

Apparently, "The Undefeated" lost the buzz wars to "Snow Flower and the Secret Fan." Go figure

= = = = = = = = = = = =

The writer scrutinized the data table and came up with: "On a comparative number of screens (less than 10), 'The Undefeated' enjoyed the fifth highest-grossing debut in the history of political documentaries." (Per the table, the vast majority of documentaries open on 1 screen. And consider the advance publicity they get....)

Actually, the "Undefeated" came in sixth in that interesting category (but is anyone really concerned with accuracy when it comes to a Breitbart based source?)

I'm not sure how the number of screens is important, but let's look at those "10 or less" and see who "the Undefeated" trailed behind:

Rank	Film	Gross	Per Screen
1	An Inconvenient Truth	$281,330	$70,332
2	Bowling for Columbine	$209,148	$26,143
3	Roger and Me	$80,253	$20,063
4	Outfoxed: Rupert Murdoch's War on Journalism	$77,982	$15,596
5	The U.S. Vs. John Lennon	$69,143	$11,523
6	The Undefeated (2011)	$65,132	$6,513

Boffo Box Office, right? For one the biggest political celebrities today!

(If I had Lexis Nexis, I'd do a search for media mentions priors to the release date - Bet that would be interesting.)

BTW, for 10 or less theaters, it came in 31st for the box office take per screen. It was just edged out by

"Can Mr. Smith Get to Washington Anymore?" ($6,742 in the one theater it opened in);

"The Panama Deception" ($6,563 in the one theater it opened in); and

"Outrage" ($6,518 - dang, just $5 more - in the one theater it opened in.)

(The full list is below.)

My experience is that most people fall into one of two categories:

1. those who let their ideologies dictate the facts they see (and filter out those they don't want to see), and
2. Those who look at all the facts and form their opinions from them.

Guess which class our "analyst" falls into....

= = =

The list of documentaries which had higher per screen box office than the heavily promoted "The Undefeated:" How many have you heard of? Ever?

1 An Inconvenient Truth

2 Your Mommy Kills Animals

3 Control Room

4 Bowling for Columbine

5 Roger and Me

6 No End in Sight

7 The War Room

8 The Trials of Henry Kissinger

9 The Weather Underground

10 The Fog of War

11 The War Tapes

12 The Hunting of the President

13 The U.S. Vs. John Lennon

14 Feed

15 Grass

16 Suicide Killers

17 An Unreasonable Man

18 Fidel

19 Power and Terror: Noam Chomsky in Our Times

20 Why We Fight

21 The Last Mountain

22 Giuliani Time

23 Ballot Measure 9

24 The Yes Men

25 Our Brand Is Crisis

26 In the Face of Evil: Reagan's War in Word and Deed

27 For the Bible Tells Me So

28 Can Mr. Smith Get to Washington Anymore?

29 The Panama Deception

30 Outrage

31 The Undefeated (2011)

Boffo box office, indeed. A raging success for the conservative cause, right?

Who Increased How Much Debt?

This graph is a bit simplified. Reagan, Clinton and Bush II served 8 years, Bush I only 4, and Obama has only served 2 1/2.

And debt can arise from additional spending, or decreased revenue, or both.

If you "annualize the increase in debt, Obama would be just a tad below Bush II (Bush II - 10.75%, Obama 9.2%)

But Bush choose to reduce revenue and increase spending; Obama was stuck with both Bush's decreased revenue from his tax cuts and the even further reduced revenue from Bush's Recession. And a big chunk of Obama's increased spending was the "one time only" stimulus package.

Of course, Obama has embraced many GOP economic practices, so we'll have to see how this plays out over time.

So far, though, the Republican Presidents are way ahead when it comes to fiscal irresponsibility.

Where Are The Jobs

Jobs! Deficits! Jobs! -- It looks as if the GOP is swinging back to their "jobs, jobs, jobs" chant.

They tell us we can "create jobs" with (1) tax cuts, (2) expanding the wealth of the richest and (3) gutting checks and balances on corporate power (also known as regulations.)

In the Bush II administration, we had (1) huge tax cuts, (2) huge redistribution of wealth to the richest and (3) huge cuts in regulations.**

So our economy and job growth should have been soaring during the Bush administration, right?

And so let's look at the results:

Over the eight years of the Bush admin, in aggregate we lost jobs. (The orange line.)

There were a few years - from the end of 2003 to the end of 2006 - where job growth (the bottom dark blue annual job growth line) was slightly above that needed to just keep pace with the growth of the workforce population (the horizontal green line.***) That was when the Bush deficit spending was at the highest.

The yellow line shows the aggregate number of jobs needed to keep up with populations growth.

The only significant job growth we have seen since 2000 was in 2009, the year the Obama Stimulus package was at work (the sharply rising cyan/light blue line.) The GOP pretty much shut it down and stopped any extension of the proven economic policy of "pump priming, and job growth has dropped back.

As is said, people are entitled to their own opinions, but they are not entitled to their own facts.

And the facts are that GOP economic policies result in massive transfers of wealth to the rich and no job growth (or economic growth) for the rest of us.

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* The 2011 figures were extrapolated from the first 5 month's figures

** Over the past couple of years, we have also seen corporation running up record profits and savings, but not creating jobs, at least not here in the US. See http://rjw-progressive.blogspot.com/2011/06/economic-wrong-turn.html for a discussion of the effects of unthinking support of corporate powers.

*** I have found figures for the job growth needed to keep up with the growth of the workforce population ranging from 125,000 new jobs a month to 137,000 a month. This chart uses the higher figure

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Picture $84 Million

"Philippe P. Dauman, the chief executive of Viacom made $84.5 million in 2010, after signing a new long-term contract that included one-time stock awards." NY Times

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On Facebook, someone said "I am trying to picture the 'mass' or 'size' of $84.5 million, in $1 bills

OK, here we go: A dollar bill is 0.0043" thick, and measures 2.61" x 6.1"

A stack of 84.5 million one dollar bills would be 363,350 inches high (new dollar bills from the mint)

That equals 30,279 feet which is 5.73 miles high.

Commercial long haul jets fly at 30,000 to 40,000 feet.

One flying at "only" 30,000 would hit the top of that pile, cutting off 279 feet, costing him $5,407 dollars!

Or....

My F150 standard cab "short bed" pickup bed is 6'5" x 5'2" x 1'8"

Ignoring the wheel wheels inside the bed, it would take 60 pickup trucks to haul around his 84,500,000 one dollar bills.

That line of trucks, bumper to bumper, would be 1,072 feet long; "only" about 3 1/2 football fields.

Now, when they're following him at 60 mph with the recommended 6 vehicle lengths between, his money parade will "only" stretch out 1.42 miles long.

Or....

Laid end to end $84.5 million in dollar bills = 824 miles, stretching from New York City, past Chicago, and ending up in Leland Grove ILL, just past Springfield, ILL.

Or.... If you want to head south, those dollar bills won't quite reach Jacksonville FLA