Taibbi on Obama's criticism of RS's bank reporting

Here are the key points from Taibbi's response to Obama's straw-man criticisms of Rolling Stone's financial reporting. First:

But it's still odd that [Obama] would focus so intently on that one point [Glass-Steagall], given that the president himself proposed and supported a sort of new version of Glass-Steagall, called the Volcker Rule. Almost all the pro-reform voices I know on Wall Street and in Washington liked the original version of the Volcker rule, and many would have been content to forget about Glass-Steagall forever had the original version of the Volcker Rule that President Obama himself supported actually made it through to become law.

But it didn't. Instead, the Volcker rule was gutted from within by members of both parties during the Dodd-Frank negotiations, and as we reported on several occasions, it was Geithner and the Obama administration that were particularly aggressive in scaling it back behind closed doors. That was what we criticized the president for – not so much for failing to reinstate Glass-Steagall, but for allowing his own policy proposal to be punched so full of holes that it would never be an effective law.

Years after the passage of Dodd-Frank, even the critically-weakened version of the Volcker rule that did ultimately pass is still not officially federal law, its implementation recently delayed again until at least 2014.

But Glass-Steagall isn't all of this story of failed reform that goes back to the Clinton Administration and his Citibank buddies:

The repeal of Glass-Steagall was just part of the decades-long deregulatory effort that led to this toxic situation. Another Clinton-era law, the Commodity Futures Modernization Act, contributed to it as well, by completely deregulating the market for derivatives (which were used to package all of those mortgages, were a major contributor to the collapse of AIG, and also played a huge role in the Jefferson County, Alabama disaster, among other things). Supreme Court decisions allowing interstate bank mergers where before they had been prohibited helped create the Wachovias and WaMus of the world. And a 2004 SEC decision to lift restrictions on leverage for the country's biggest investment banks allowed companies like Lehman to borrow forty dollars or more for every one they actually had.

Collectively, these and other policies created a market where banks were over-large, capital was lethally overconcentrated in the hands of a few huge firms, financial companies were all leveraged to the moon and the fates of federal insurance programs like the FDIC were suddenly tied to the gambling habits of some of the riskiest investment banks in the world. It wasn't just Glass-Steagall – it was Glass-Steagall plus all of this other stuff that made the world so dangerous.

So the first and most critical goal of any reform-minded administration should have been to alleviate these dangers by making things less concentrated, i.e. by making Too-Big-To-Fail companies small enough to fail. And Obama really didn't do that, on any front.

And then there is the issue of Too Big Too Fail, which with troubled bank "shotgun" mergers is now worse than ever:

Finally, Obama had a chance to physically reduce the size of Too-Big-To-Fail companies by supporting the Brown-Kaufman amendment to Dodd-Frank, which would have forced big banks to cap deposits and liabilities to under 10% of GDP. He didn't support that amendment and it died.

P.S. -- Never let it be said that I'm a hack who carries Obama's water.  He had an historic chance to put Wall Street in its place and a real bi-partisan sentiment against the bailouts and TBTF banks -- remember the Tea Parties were and are (they say) against TARP and the other TBTF bank bailouts??  But Obama let his opportunity slip.  Partly due to his inaction, then Occupy Wall Street got involved and the Right knee-jerk reacted against them, conflating OWS attacks against the bailouts and the financialization of the U.S. economy with an attack on capitalism, a reaction which the rightwing media happily helped foment.  Then the selfish, self-righteous Wall Street dickheads like Jamie Dimon who nearly destroyed the world suddenly became John Galt in the Right's eyes.

Obama Defends His Finance Reform Record to Rolling Stone: A Response

By Matt Taibbi

October 26, 2012 | Rolling Stone

URL: http://www.rollingstone.com/politics/blogs/taibblog/obama-defends-his-finance-reform-record-to-rolling-stone-a-brief-response-20121026#ixzz2AiFbD7Qe

U.S. youth becoming libertarian by default?

Hmmm....  Well, assuming these polls mark a real trend, there is plenty in this article to implicate both parties.  But also, as Rush Limbaugh likes to say, youngsters' heads are "full of mush."  I'll be more charitable and say they've been spoiled by their solicitous helicopter parents, on-demand consumer culture, and lack of experience.

More precisely, I'd say younger kids (younger than me, let's be clear), grew up in a society where they believed all adults were honest and had their best interests at heart, and stuff was supposed to work as advertised.  And if not, there were all kinds of consequences and avenues for formal and informal complaint.  Because their parents outdid themselves teaching them they were growing up in a world that was basically fair and just.

The trouble in politics is, it's quintessentially a liar's game, and stuff never works like it's supposed to, because too many cooks always spoil the broth, and half the cooks can't even cook, and the menu's in 3 languages, etc.  Gen. Yers or Millennials or whatever the New Yorker is calling them this year, have no patience for all that.  Stuff is supposed to work as advertised, they say.  Or they shop somewhere else.  Trouble is, there are only two stores.  

What these young folks don't understand is that our government -- thanks to electoral politics -- has never run smoothly, and probably never will. 

Sooner or later they'll get off their high horses, wisen up, and realize they have to get dirty and compromise and choose the worst of two (or three) evils just like their parents and grandparents always did.  This does not mean they have to abdicate.  From from it!  But they have to realize that democratic politics is a brawl, and things get messy and bloody and the judges don't always call the scorecard correctly.  Politics is not a product and they are not its consumers choosing from a menu.  THEY ARE THE PRODUCT; AND they are the customer service department.  And until they realize that, they are doomed to irrelevance and stupidity.   

The only real reaction I've seen to this are the Occupy movements.  Mark my words: they will lead to something.  I don't know what yet.  But enough of these kids (and older activists) have realized that they have to get their hands dirty to get attention.  They don't know what to do yet, but they know they need to do something.  Calling the 1-800 number isn't going to work this time.

The Kids Are All Libertarian

By Vinnie Rotondaro

July 12, 2012 | Vice.com

URL:  http://www.vice.com/read/the-kids-are-all-libertarians

Essay: Why is the end of the world so American?

Despite my far-left politics, I feel the strange allure of American survivalism. Post-apocalyptic movies like Planet of the Apes, The Omega Man, The Road Warrior, Waterworld, The Postman or The Book of Eli, wasteland lit. like The Road, or even zombie movies (my favorite) like 28 Days Later, Resident Evil: Apocalypse and Dawn of the Dead, not to mention the top-rated AMC television series The Walking Dead, instruct us that those who are hardened and prepared, psychologically and materially, stand a better chance of survival. Part of me -- I'm not sure which part -- warns me to ignore this instruction at my own peril.

There is something primal and basic in survivalism that seems so true due to its harsh black-and-white morality, its whittling down of priorities, and its focus on saving loved ones and treasured ideals. And there is something so manly about it, let's face it. (I don't have a very good feeling how popular all this stuff is with girls, I admit. Survivalism -- and my lack of it -- is not something I'm keen to talk about with most guys, much less the ladies.)

But why in America is survivalism suddenly so popular? And why are we churning out all this pop disaster that makes it feel necessary? (To be sure, the Brits are catching up). More concretely, why do we also have so many real-life American Redobuts, ready and waiting for God knows what and when? As alluded to, it must have something to do with our culture, starting with our fear of nuclear war in the 1950s with our fully stocked bomb shelters all the way up to our fear of flu epidemics, Big Government collapse, and resource shortages from global supply chain shocks. And to be sure, there are those who yearn for the terrible, black day that proves that America's love affair with firearms, so deadly in the short run, is supremely justified in the long run.

But that doesn't explain it all. No, I suspect it partly has to do with a sense of foreboding, a subconscious resignation to an imminent Day of Reckoning for us in the West, and America in particular*, for how good we've had it in a world that is so violent and unequal. And perhaps retribution for our sins. And our sins, depending who you talk to, are myriad and profound.

(* And New York in particular. I often recall the hilarious yet insightful question of a very dear non-American: "Why is Hollywood so obsessed with destroying New York City?" Indeed, why? Is it Los Angeles's way of getting back at its coastal rival? Is it because Wall Street assholes deserve it? Or is it jealousy because they are cleverer, richer and win more pennants? Anyhow, I feel sorry for New York and New Yorkers already, both pre- and post-9/11. Give it a rest, guys. Why not let Boise, Branson, Lubbock or Fargo take one on the chin for America for once, huh, Hollywood?)

On the Right, they say the Reckoning will come when we can't pay our profligate debts, or the digital currency collapses and Big Government turns violent and despotic, or even when we become so self-centered, decadent and idolatrous that an angry God "raptures" the good souls to heaven while leaving the sinful dregs to fight over the smoking remains while being hounded by the armies of the Anti-Christ. And Randroids have been threatening us with retribution for our sins since Atlas Shrugged in 1957.

On the Left, they say the Reckoning will come when we have depleted all the planet's resources, or genetically modified crops suddenly collapse and we forget how to feed ourselves and by extension, the world, or when climate change deprives the U.S. and many other places of the necessary conditions for industrial agriculture.

Both sides still fear the spectre of nuclear war -- from an errant Russian nuke, a burgeoning China, a jihadist's dirty bomb, or a crazy Iranian missile attack. Strangely (?), the end of the Cold War has done little to calm our fear of, and fascination with, the nuclear end times.

Then there is sci-fi pop culture which terrifies us with hordes of flesh-eating zombies, rapacious or blood-drinking aliens, planet-killing meteors, and super-diseases engineered by the government -- ours or another's -- leaked into the general population.

There is a pretty well-accepted psychological theory that argues we humans love horror stories because they help us to imagine and prepare for the worst: we can thus live out the worst case scenarios in our minds, and anticipate how we would deal with them, without actually suffering them. If that is the case, then the growing popularity of apocalyptic tales means that we are giving tremendous thought to such what-if scenarios. Does that mean such scenarios are becoming increasingly more likely?

Another well-accepted psychological theory states that we humans evolved in an environment of ever-present danger; and when danger is absent, we don't quite believe our eyes; so we seek to invent or imagine it, for example, through extreme sports. If so, then one could argue that the growing peacefulness in the West and America in particular is causing a corresponding psychological backlash, a secret yearning for an equal measure of danger to balance the scales. And it doesn't get any more dangerous than the end of the world.

Then there is the explanation that with technological progress we have become so psychologically and physically flabby and self-unreliant that we subconsciously yearn for the ultimate workout, the ultimate test of self to weld six-pack abs and Jim Brown's chest on our manliness. I mean, we don't know how to hunt or grow food anymore. We don't recognize any of the plants around us, even in our backyards. Most of us don't even know first-aid, CPR, or basic wilderness survival skills taught in Boy Scouts. This is not to mention the social epidemic of U.S. obesity, especially among the poor, and Southerners.

I find some evidence for this explanation in the growing popularity of survival shows on TV, which allow us to sit on our couches munching chips while "learning" something about taming -- or rather, bonding with -- those dwindling oases of wild nature. There is more evidence for this theory in the popularity of figures like James Wesley Rawles, best-selling author of Survivors: A Novel of the Coming Collapse and How to Survive the End of the World as We Know It. I mean, what kind of pathetic nerd learns how to survive from a book? It sounds like something I'd do*. (Both books are available on MP3 and Kindle for all you hardcore woodsmen.)

(* I admit I read The Zombie Survival Guide: Complete Protection from the Living Dead by visionary survivalist Max Brooks, but only because there are no real-life zombies to practice on (yet), not even in the woods.)

But I think the vogue of contemporary Western survivalism is best explained by something else: our modern sense of helplessness in the face of unstoppable globalization and the towering power of mechanistic, bureaucratic de-humanizing corporations and governments. The West -- that is, its diplomats and business cabals -- presently rules the world; but as individuals we Westerners, and especially we Americans, seem to matter less and less. And that doesn't feel right. It doesn't sit well with our myth of ourselves as ruggedly self-reliant cowboys riding life's range of possibilities.

And now it's time to return to my more familiar political-moralistic tone. The Tea Parties -- may they fail miserably -- and the Occupy movements -- may God bless them -- are looked down upon by a majority as malcontents trying to impose their fringe worldview on the rest of us, but at least they're trying to change something. Most of us, despite our vague dissatisfaction, have given up. Organizing, protesting, questioning authority, grassroots campaigning to pass a law or Constitutional amendment -- these are looked down upon as naive pursuits at best, and anti-American at worst. Labor unions -- who traditionally gave voice to the voiceless and balanced normal people's concerns with the national-industrial plans of commerce and government -- at least in the private sector, are nearly dead in America.

Compounding our sense of helplessness, the Left-Right consensus that impersonal "free markets" and "the invisible hand" solve most problems better than a group of actual human beings with a singular purpose leaves most of us convinced that nothing we do matters (except in the statistical, mystical aggregate), and even worse, we nowadays believe that interfering with those impersonal forces is tantamount to a political and economic crime, a la apocryphal capitalist "wrecker" spies in the Soviet Union who managed to throw a monkey wrench into otherwise humming factories churning out a better life for the masses.

In the face of perceived unstoppable, impending collapse, some choose to wall themselves off from it, and/or to create something new and pure in its place. You don't have to be a flower child to recognize the similarities between a rural survivalist practicing sustainable agriculture and pursuing renewable energy and water supplies with hippy communes starting in the '60s. These loose networks of survivalists formed by social networks, radio programs, shared books and films, and even their common choice of redoubt (Idaho-Wyoming-Montana) points to a yearning for their own like-minded community, albeit separated by hills, woods and fences. They don't want to be alone alone.

So modern American survivalism cannot be dismissed as silly, fringe, or just good fun. It's serious business. We ignore this phenomenon at our own peril. Moreover, we ignore what they're feeling -- and our inexplicable commiseration with them -- at our own peril.

The antidote to impotent rugged individualism (expressed through survivalism) is organization. Not building another party, NGO, or corporation -- but organizing actual groups of human beings with a singular purpose around common goals and then acting resolutely. Those people in the Tea Parties and Occupy movements who have tasted what such gatherings of like-minded, everyday people feel like know it is intoxicating -- and eye-opening. They want more and more of it. Regardless of their politics, they are acknowledging their individual powerlessness yet exercising their individual will to voluntarily join a powerful collective. Heck, even survivalist communities, conventions and social networks are an ironical cry for "Community!" by neglected, rejected, and self-exiled loners.

Don't get me wrong, I'll keep enjoying my Walking Dead, Max Brooks and Bear Grylls. I even enjoyed Atlas Shrugged... when I was a teenager. But I am not under any illusions as to the power of the rugged individual survivalist. Rather, in him I see my own fears and shortcomings... and the failure of globalization to preserve a sense of community and individual security even for many Americans.

Huntsman: Break up the TBTF banks

Well, well, well, it looks like Huntsman's trying to get noticed. "The Obama and Romney plan" for the banks. That's funny. As if they sit and plan together.

Probably it won't do him any good; it may just put pressure on Romney. Criticizing Wall Street doesn't play well to the GOP's radical base, which hates anything that smells like "class warfare" or OWS: now they will have a knee-jerk reaction against any criticism of Wall Street.

The Tea Parties' silence on the Fed's Wall Street bailouts is evidence enough that breaking up the TBTF banks is a losing issue among hardcore Republicans.

Wall Street's Big Banks Are the Real Threat to Our Economy

By Jon Huntsman

January 7, 2012 | FoxNews

Rebuilding our economy and restoring trust in our government will require a leader with the independence to implement bold reforms that take on the establishment, from Washington to Wall Street.

Thus far, however, we are the only campaign willing to confront honestly and directly one of the greatest threats to our long-term economic prosperity: Too-Big-To-Fail Wall Street banks.

In 2008, with the nation's economy in crisis, Washington and Wall Street offered American taxpayers a Sophie's Choice: spend hundreds of billions of dollars to save big banks from failure, or witness the collapse of our financial system and irreparable economic harm.

This was not only a betrayal of the public's trust; it was also a betrayal of our free market system, which only works when every business plays by the same rules.

Taxpayers were promised those bailouts would be a one-time, emergency measure. Yet today, we can already see the outlines of the next financial crisis and bailouts.

The six largest financial institutions are significantly bigger than they were in 2008, having been encouraged to snap up Bear Stearns and other competitors at bargain prices.

These banks now have assets worth over 66% of gross domestic product – at least $9.4 trillion – up from 20% of GDP in the 1990s.

Dodd-Frank, which purportedly designed to fix Too-Big-To-Fail, has only made things worse. Not only has it left us with larger banks, but it imposes massive new regulations and unreasonable compliance costs on smaller banks, which hurts small business lending.

President Obama has offered no real solutions other than to demonize capitalism, which may score political points but does nothing to solve the problem.

My opponents have also failed to take on Wall Street with substantive reforms. This includes – unsurprisingly – the establishment's preferred front-runner, Mitt Romney.

Governor Romney, who has accepted more Wall Street money than any other candidate, has offered no concrete solutions to protect taxpayers in the event of a future financial crisis.

The Obama and Romney plan simply appears to be to cross our fingers and hope no Too-Big-To-Fail banks fail on their watch – a stunning lack of leadership on such a critical economic issue.

As president, I will break up the big banks, end future taxpayer bailouts, and restore capitalist principles – competition and creative destruction – to our financial sector.

We will accomplish this by imposing a fee on banks whose size exceeds a certain percentage of GDP, proving them an incentive to slim down and localize.

Many of us can recall an earlier time when we had community banks that were actually a part of the community, instead of a faceless Wall Street entity. They sponsored our kids' baseball teams. You knew the president on a first name basis. Your small business or farm's credit was based as much on your reputation and character as your FICO score.

We need banks that are closer to our communities that, if mismanaged, are small and simple enough to fail – not financial public utilities.

The federal government cannot afford to wait until the next financial crisis is upon us to act, which will be too late and cost taxpayers too much.

Whether it is ending Too-Big-To-Fail, reforming the corrupted culture of Congress, or eliminating special interest preferences in our tax code, we need a president who is not indebted to the power brokers in Washington or on Wall Street.

We need a president who will take on the establishment from the outside, and deliver the bold reforms our country desperately needs. That is what I will continue to offer the American people.

OWS already has a win -- in Ohio

OWS has successfully changed the debate from the federal debt and deficit reduction, to reducing inequality and consumer debt and improving the welfare of the bottom 99 percent. We owe them a big thank-you.

"Nonetheless, it's undeniable that a mood change had hit Ohio -- and in a major way. Pro-worker organizers and volunteers benefited from something their peers in Wisconsin lacked: the wind of public opinion at their backs. Polls conducted in the run-up to Ohio's November 8th vote showed large majorities of Ohioans agreeing that income inequality was a problem. What's more, 60% of respondents in a Washington Post-ABC poll said the federal government should act to close that gap. Behind those changing numbers was the influence of Occupy Wall Street and other Occupy protests."

A populist uprising may shape 2012

By Andy Kroll

November 21, 2011 | CBS News

URL: http://www.cbsnews.com/8301-215_162-57328622/a-populist-uprising-may-shape-2012/

Taibbi: Now I Love the OWS Protests

Although I do wish the OWS protests would "get specific" and really go after corrupt Wall Street banks as their name suggests, it's their prerogative to focus on some issues or none at all, because it's their protests. I'm not out there camping with them, that's for sure.

Also, as I said before, it's not really fair or realistic to expect this mass of mostly young people to have all the answers. They've done America quite a service, in fact, simply by saying, "This is f***ed up." As in, the system is fundamentally corrupt, money-driven and undemocratic. Their job is to beat that drum until enough people -- liberals included -- really get the message. They are right that an election or "issues campaign" won't solve anything.

They've done us a great favor by diagnosing America with terminal cancer. Collectively, it's up to us to find the cure.

How I Stopped Worrying and Learned to Love the OWS Protests

Much more than a movement against big banks, they're a rejection of what our society has become.

By Matt Taibbi

November 10, 2011 | Rolling Stone

I have a confession to make. At first, I misunderstood Occupy Wall Street.

The first few times I went down to Zuccotti Park, I came away with mixed feelings. I loved the energy and was amazed by the obvious organic appeal of the movement, the way it was growing on its own. But my initial impression was that it would not be taken very seriously by the Citibanks and Goldman Sachs of the world. You could put 50,000 angry protesters on Wall Street, 100,000 even, and Lloyd Blankfein is probably not going to break a sweat. He knows he's not going to wake up tomorrow and see Cornel West or Richard Trumka running the Federal Reserve. He knows modern finance is a giant mechanical parasite that only an expert surgeon can remove. Yell and scream all you want, but he and his fellow financial Frankensteins are the only ones who know how to turn the machine off.

That's what I was thinking during the first few weeks of the protests. But I'm beginning to see another angle. Occupy Wall Street was always about something much bigger than a movement against big banks and modern finance. It's about providing a forum for people to show how tired they are not just of Wall Street, but everything. This is a visceral, impassioned, deep-seated rejection of the entire direction of our society, a refusal to take even one more step forward into the shallow commercial abyss of phoniness, short-term calculation, withered idealism and intellectual bankruptcy that American mass society has become. If there is such a thing as going on strike from one's own culture, this is it. And by being so broad in scope and so elemental in its motivation, it's flown over the heads of many on both the right and the left.

The right-wing media wasted no time in cannon-blasting the movement with its usual idiotic clichés, casting Occupy Wall Street as a bunch of dirty hippies who should get a job and stop chewing up Mike Bloomberg's police overtime budget with their urban sleepovers. Just like they did a half-century ago, when the debate over the Vietnam War somehow stopped being about why we were brutally murdering millions of innocent Indochinese civilians and instead became a referendum on bralessness and long hair and flower-child rhetoric, the depraved flacks of the right-wing media have breezily blown off a generation of fraud and corruption and market-perverting bailouts, making the whole debate about the protesters themselves – their hygiene, their "envy" of the rich, their "hypocrisy."

The protesters, chirped Supreme Reichskank Ann Coulter, needed three things: "showers, jobs and a point." Her colleague Charles Krauthammer went so far as to label the protesters hypocrites for having iPhones. OWS, he said, is "Starbucks-sipping, Levi's-clad, iPhone-clutching protesters [denouncing] corporate America even as they weep for Steve Jobs, corporate titan, billionaire eight times over." Apparently, because Goldman and Citibank are corporations, no protester can ever consume a corporate product – not jeans, not cellphones and definitely not coffee – if he also wants to complain about tax money going to pay off some billionaire banker's bets against his own crappy mortgages.

Meanwhile, on the other side of the political spectrum, there were scads of progressive pundits like me who wrung our hands with worry that OWS was playing right into the hands of assholes like Krauthammer. Don't give them any ammunition! we counseled. Stay on message! Be specific! We were all playing the Rorschach-test game with OWS, trying to squint at it and see what we wanted to see in the movement. Viewed through the prism of our desire to make near-term, within-the-system changes, it was hard to see how skirmishing with cops in New York would help foreclosed-upon middle-class families in Jacksonville and San Diego.

What both sides missed is that OWS is tired of all of this. They don't care what we think they're about, or should be about. They just want something different.

We're all born wanting the freedom to imagine a better and more beautiful future. But modern America has become a place so drearily confining and predictable that it chokes the life out of that built-in desire. Everything from our pop culture to our economy to our politics feels oppressive and unresponsive. We see 10 million commercials a day, and every day is the same life-killing chase for money, money and more money; the only thing that changes from minute to minute is that every tick of the clock brings with it another space-age vendor dreaming up some new way to try to sell you something or reach into your pocket. The relentless sameness of the two-party political system is beginning to feel like a Jacob's Ladder nightmare with no end; we're entering another turn on the four-year merry-go-round, and the thought of having to try to get excited about yet another minor quadrennial shift in the direction of one or the other pole of alienating corporate full-of-shitness is enough to make anyone want to smash his own hand flat with a hammer.

If you think of it this way, Occupy Wall Street takes on another meaning. There's no better symbol of the gloom and psychological repression of modern America than the banking system, a huge heartless machine that attaches itself to you at an early age, and from which there is no escape. You fail to receive a few past-due notices about a $19 payment you missed on that TV you bought at Circuit City, and next thing you know a collector has filed a judgment against you for $3,000 in fees and interest. Or maybe you wake up one morning and your car is gone, legally repossessed by Vulture Inc., the debt-buying firm that bought your loan on the Internet from Chase for two cents on the dollar. This is why people hate Wall Street. They hate it because the banks have made life for ordinary people a vicious tightrope act; you slip anywhere along the way, it's 10,000 feet down into a vat of razor blades that you can never climb out of.

That, to me, is what Occupy Wall Street is addressing. People don't know exactly what they want, but as one friend of mine put it, they know one thing: FUCK THIS SHIT! We want something different: a different life, with different values, or at least a chance at different values.

There was a lot of snickering in media circles, even by me, when I heard the protesters talking about how Liberty Square was offering a model for a new society, with free food and health care and so on. Obviously, a bunch of kids taking donations and giving away free food is not a long-term model for a new economic system.

But now, I get it. People want to go someplace for at least five minutes where no one is trying to bleed you or sell you something. It may not be a real model for anything, but it's at least a place where people are free to dream of some other way for human beings to get along, beyond auctioned "democracy," tyrannical commerce and the bottom line.

We're a nation that was built on a thousand different utopian ideas, from the Shakers to the Mormons to New Harmony, Indiana. It was possible, once, for communities to experiment with everything from free love to an end to private property. But nowadays even the palest federalism is swiftly crushed. If your state tries to place tariffs on companies doing business with some notorious human-rights-violator state – like Massachusetts did, when it sought to bar state contracts to firms doing business with Myanmar – the decision will be overturned by some distant global bureaucracy like the WTO. Even if 40 million Californians vote tomorrow to allow themselves to smoke a joint, the federal government will never permit it. And the economy is run almost entirely by an unaccountable oligarchy in Lower Manhattan that absolutely will not sanction any innovations in banking or debt forgiveness or anything else that might lessen its predatory influence.

And here's one more thing I was wrong about: I originally was very uncomfortable with the way the protesters were focusing on the NYPD as symbols of the system. After all, I thought, these are just working-class guys from the Bronx and Staten Island who have never seen the inside of a Wall Street investment firm, much less had anything to do with the corruption of our financial system.

But I was wrong. The police in their own way are symbols of the problem. All over the country, thousands of armed cops have been deployed to stand around and surveil and even assault the polite crowds of Occupy protesters. This deployment of law-enforcement resources already dwarfs the amount of money and manpower that the government "committed" to fighting crime and corruption during the financial crisis. One OWS protester steps in the wrong place, and she immediately has police roping her off like wayward cattle. But in the skyscrapers above the protests, anything goes.

This is a profound statement about who law enforcement works for in this country. What happened on Wall Street over the past decade was an unparalleled crime wave. Yet at most, maybe 1,500 federal agents were policing that beat – and that little group of financial cops barely made any cases at all. Yet when thousands of ordinary people hit the streets with the express purpose of obeying the law and demonstrating their patriotism through peaceful protest, the police response is immediate and massive. There have already been hundreds of arrests, which is hundreds more than we ever saw during the years when Wall Street bankers were stealing billions of dollars from retirees and mutual-fund holders and carpenters unions through the mass sales of fraudulent mortgage-backed securities.

It's not that the cops outside the protests are doing wrong, per se, by patrolling the parks and sidewalks. It's that they should be somewhere else. They should be heading up into those skyscrapers and going through the file cabinets to figure out who stole what, and from whom. They should be helping people get their money back. Instead, they're out on the street, helping the Blankfeins of the world avoid having to answer to the people they ripped off.

People want out of this fiendish system, rigged to inexorably circumvent every hope we have for a more balanced world. They want major changes. I think I understand now that this is what the Occupy movement is all about. It's about dropping out, if only for a moment, and trying something new, the same way that the civil rights movement of the 1960s strived to create a "beloved community" free of racial segregation. Eventually the Occupy movement will need to be specific about how it wants to change the world. But for right now, it just needs to grow. And if it wants to sleep on the streets for a while and not structure itself into a traditional campaign of grassroots organizing, it should. It doesn't need to tell the world what it wants. It is succeeding, for now, just by being something different.

TARP wasn't 'paid back,' not by a long shot

So it turns out that TARP loans weren't "paid back," we should be owed about $300 billion in risk premiums for the year 2009 alone, and this is not to mention the $16 trillion in Fed bailouts for the international TBTF banks. TARP was absolutely free money.

TARP wasn't really even a loan, it was a gift, it was a sick joke on U.S. taxpayers, because the bailed-out banks can pay off their TARP loans with even more government loans at zero-percent interest. (Remember how the GOP went ballistic when GM tried a similar trick to pay off some of its TARP loan?) The bailed-out banks have in turn used this borrowed money to fund their trades, which only have to earn more than 0.0% return to net them a profit. In fact, it gets worse, because often the banks have turned around and used those borrowed funds to... buy risk-free U.S. treasuries, which means they loaned their government loan money back to the government at a guaranteed higher rate of interest. But it's even worse still: the banks have been leveraging their trades, "borrowing at least $10 for every $1 of equity capital they have, to increase the size of their bets."

Stealing isn't enough vice for these sleazebags -- they have to gamble, too!

Any small-time crook of average intelligence could be explained this scam in a matter of an hour and then become a successful present-day Wall Street CEO. I mean, how could you not make stacks of cash with a scam as perfectly foolproof as this?

(Well, nearly foolproof. There is one remote pitfall: If the banks' unlimited ATM machine, the U.S. Government, is severely downgraded and defaults on its debt. Then the banks would be pretty screwed... which is why they've been giving U.S. politicians and the unwashed electorate sanctimonious lectures about the need to get our fiscal house in order, i.e. gut Social Security, Medicare, Medicaid, unemployment insurance, and government-sponsored health care, so that their scam can continue indefinitely.)

"We've got to re-think the relationship between taxpayers and financial institutions," said Prof. Ed Kane of Boston College, "Taxpayers are essentially implicit stockholders. And they're in for the worst part of the ride." The downside, that is. While the banks get all the upside -- all the profit. This is moral hazard, big time. Not to mention colossally unjust corporate socialism on a scale never before seen on Earth.

This is further evidence that the Occupy protests, despite their shortcomings like the occasional errant turd, have chosen absolutely the correct target, while erstwhile bailout opponents in the Tea Parties have, sadly, taken their eyes off the ball. The TPs now blame the attempted cure (fiscal stimulus) for the illness caused by the financial crisis and aggravated by the bank bailouts which continue to distort the real economy while denying desperately needed credit to firms and households.

Ed Kane - Measuring Systemic Risk To Empower the Taxpayer

Uploaded by INETeconomics

August 23, 2011 | YouTube

URL: http://youtu.be/REvOBX2jg14

MB360: Here is the One Percent

The top One Percent of Americans are those who earn $1 million or more in gross adjusted income per year.

Meanwhile the median annual income per American worker is $26,250.

And 75 percent of total income tax is being paid by households earning $500,000 or less per year.

These stats put things in perspective, don't they? Looks like OWS is right on the mark.

The glory of debt spending and casino financial markets. What is the typical income, tax situation, and household income for Americans? Americans claiming student loan deduction surges from 4 million to 10 million in roughly one decade. According to IRS AGI needs to be above $1 million to qualify for top one percent.

Posted by mybudget360 | October 26, 2011

This weekend I spent time digging through IRS and Social Security data to get a better perspective on working and middle class Americans. I find it amazing that in a consumer driven economy, meaning we live to spend in some respect that the media never even bothers to focus on household incomes. Even on self branded "business" programs with fancy watermarks which tout their major expertise on knowing about Americans they fail to do any analysis on income. Need we even point out their missing of the biggest economic recession in our recent history? This silence as you know is purposeful. The media is largely beholden to advertisers and it might be perceived as a downer to tell the public how far back they have gone in the last decade on the income treadmill. It is understandable although not acceptable that large television outlets do not discuss wages and income but what about the respectable press? Where is there voice? Either way, as we dig into the data it is understandable why so few even bother to cover this unsavory topic.

Tax return data by income levels

First, let us gather a glimpse of actual household tax filing information:

Source: IRS

With all the discussion about the 99 percent I think you have many people that are largely off on what they assume is the one percent. The media is largely to blame and I have even seen business outlets interview people that claim to make $100,000 and are afraid of being taxed because they are in the one percent. Uh, not exactly.

Let us examine the data:

66 percent of tax returns show an adjusted gross income of $50,000 or less

31 percent of tax returns show an adjusted gross income between $50,000 and $100,000

So with these two groups, you are covering 97 percent of all households. Now keep in mind we are looking at adjusted gross income so actual wages will be higher, but not by much.

"So what does it take to be in the top one percent? You will need an adjusted gross income of $1,000,000 or more."

Even folks with an AGI between $200,000 and $500,000 don't fall in this category. Of course Wall Street investment bankers want to make people believe that even with a $100,000 household income that somehow if investment banks were regulated that they will lose their entire life savings (this is actually already happening with housing and the casino known as Wall Street).

Let us dig deeper into the tax data.

Tax returns broken down further

Out of roughly 140 million tax returns in the latest data, 92 million had AGI of less than $50,000. Couple this with Social Security data which is based on raw W2 income and we find that the typical American worker is pulling in $26,000 a year. Is this giving you a better perspective of wages in the United States?

It isn't the case that those at the very top are increasing in number in a sizeable level, it is that the few at the top are getting wealthier and wealthier because of a:

-1. System favoring lobbying even if it is negative for the overall economy (which it is)

-2. A system where Wall Street speculators pay less on their taxes than regular households

-3. A government for the banks and run by the banks

-4. A financial system focused on short term profits instead of long term sustainability

-5. A system that bails out the wealthy and forces the losses on the public

This is unfortunately the way the system is tilted at the moment. You have high frequency trading that is all about making a quick buck on mini trends. What about charging a surcharge on every transaction? Let the hedge funds go wild but they will need to pay for it. The poor buy and hold investor stands no chances against these Wall Street gamblers.

The burden of student loan debt

Hopefully this gives you a better perspective on the tax side of the equation. Contrary to how some big business shows portray the working class, 75 percent of total income tax is being paid by households making $500,000 or less. Of course the perception is that millionaire households are carrying the largest burden here which is not true.

It is hard to get data on how many people are carrying student loan debt. I think I may have accidentally stumbled on a great measure for this. Since you can deduct student loan interest why not see how many people are claiming this on their tax returns?

Source: IRS

Now the above may understate the number of students in debt because it looks like one tax return may have two people claiming the deduction but only showing up as one (for one tax return). This is stunning data. In 2000 roughly 4,000,000 were claiming the student loan deduction. By 2009 this number was nearly 10,000,000! I'm sure once we get IRS data for 2010 we will see this figure surpass 10,000,000. This just highlights the fact that with rising education costs and declining household incomes, more and more Americans are simply financing their education. Why else would those claiming the student loan deduction surge nearly 150 percent in a decade?

The disappearing middle class

Another troubling data point was found in the Social Security data showing an entire decade of wiped out wage growth:

Source: Social Security, Reuters

Since the recession hit in 2007 actual pay has been decimated. The median per worker wage for Americans fell from roughly $27,000 in 2007 to $26,250 in 2010. This is in nominal terms so inflation is eating away even more and more at the middle class as the Federal Reserve continues to bail out the banking sector.

It is rather clear why the press doesn't want to cover this. They want to keep people spending and believing in the financial system even though it is completely rigged. Why bring this up? Yet as we reach peak debt situations around the world we have tough decisions to make.

Grayson gets standing-O as spokesman for OWS

Here's a partial transcript:

Grayson: Let me tell what they're talking about. They're complaining about the fact that Wall Street wrecked the economy three years ago, and nobody's been held responsible for that. Not a single person has been indicted or convicted, for destroying 20 percent of our national net worth, accumulated over two centuries. They're upset about the fact that Wall Street has iron control over the economic policies of this country, and that one party is a wholly-owned subsidiary of Wall Street, and the other party caters to them as well. That's the truth of the matter, as you [Bill] have said before. And . . . .

P.J. O'Rourke: Get the man a bongo drum, they've found their spokesman!

Grayson: If I . . .

P.J. O'Rourke: Get your shoes off, get a bongo drum, forget where to go to the bathroom, and it's yours.

Grayson: If I am the spokesman for all the people who think we should NOT have 24 million people in this country who can't find a full-time job; that we should NOT have 50 million people who can't see a doctor when they're sick; that we should NOT have 47 million people of this country who need government help to feed themselves; and that we should NOT have 15 million families who owe more on their mortgage than the value of home, OK, I'll be that spokesman.

That's my man! If Obama talked like that -- and believed it -- he'd win 70 percent of the vote in the next election.

Alan Grayson on Occupy Wall Street

Uploaded by adelphiaboy

October 8, 2011 | YouTube

URL: http://www.youtube.com/watch?v=yhrwmJcsfT0

Frank Rich: 'Inchoate class war' won't be solved by '12 elections

Many are criticizing OWS for not having a clearer diagnosis of America's problems, and a ready batch of proposed solutions. But that's unfair. The OWS movement was started and continues to be fueled mainly by the young, who can't be expected to know everything. But that doesn't mean they know nothing. Here's their advantage: these young people still retain their acute adolescent sensitivity to unfairness.

For instance, what many of us have come to sigh and take for granted, as just the way of American capitalism -- that big bankers grow rich during the good times, and even richer in bad times -- OWS sees as fundamentally unjust, and a symptom of something deeply wrong with our country. They may not have the experience or erudition to say exactly what is wrong, but they recognize colossal injustice when they see it.

They recognize the unfairness of a system which told them all their lives, "Education is the key to employment and the American dream," and yet they are graduating with huge student loan debt and few job prospects.

They recognize as a baldfaced lie that America is "bankrupt" thanks to "welfare" and therefore cannot offer mortgage relief, student debt relief, invest in infrastructure, or stimulate jobs, and yet America can somehow find $4 trillion for wars in Iraq in Afghanistan, and $16 trillion for bank bailouts (or 111% of U.S. GDP in 2010).

(Indeed, let's pause and remind ourselves that for today's college freshmen, America has been at war half their lives. Since the time they started to perceive the outside world they have known only global terrorism, "the long war," "support our troops," and indefinite U.S. occupation. How that formative experience will affect them throughout their lives no one can tell....)

Pundits like Frank Rich say "the class war has begun." No. It started at least 30 years ago. OWS is just an acknowledgment of hostilities. In their own way the Tea Parties were also an acknowledgment, but they chose to target the wrong elites as Frank Rich points out; or, as I would say, they were right to recognize Washington as the problem, but the TPs were stubbornly blind in ignoring corporate donations and lobbyists as Washington's puppet masters.

OWS may not last through the cold winter, but Americans' "inchoate" class anger isn't going anywhere. The 2012 elections don't promise to resolve anything -- they promise only to be the most depressing political contest in my lifetime. The sad truth is that both Democrat and Republican leaders want OWS to disappear, because that's what their masters want.

The Class War Has Begun

And the very classlessness of our society makes the conflict more volatile, not less.

By Frank Rich

October 23, 2011 | New York Magazine

[...]

Try as polite company keeps trying to ignore it, that war has been building in this country and abroad for much of this decade and has been waged in earnest in America since the fall of 2008. But the crisp agenda demanded of Occupy Wall Street will not be forthcoming. The inchoateness of our particular class war is central to its meaning. America is not Tahrir Square or the riot-scarred precincts of North London, where everyone knows at birth who is in which class and why. We pride ourselves on being a "classless" democracy. We abhor ideology. When Americans left and right, young and old, express anger at an overclass, they don't necessarily agree about who's on which side of that class divide. The often confusing fluidity of class definitions, especially in an America as polarized as ours is now, may make our home­grown class war more volatile, not less.

[...]

Back in 1931, even Hoover worried that "timid people, black with despair" had "lost faith in the American system" and might be susceptible to the kind of revolutions that had become a spreading peril abroad. When Roosevelt took office, he had the confidence that his leadership could overcome that level of despair and head off radicals on the left or right. In 2011, the despair is again black, and faith in the system is shaky, but it would be hard to describe the atmosphere at Zuccotti Park or a tea-party rally as prerevolutionary. The anger of the class war across the spectrum seems fatalistic more than incendiary. No wonder. Everyone just assumes the fix is in for the highest bidder, no matter what. Take—please!—the latest bipartisan Beltway panacea: the congressional supercommittee charged by the president and GOP leaders to hammer out the deficit-reduction compromise they couldn't do on their own. The Washington Post recently discovered that nearly 100 of the registered lobbyists no doubt charged with besieging the committee to protect the interests of the financial, defense, and health-care industries are former employees of its dozen members. Indeed, six of those members (three from each party) currently have former lobbyists on their staffs.

[...]

Elections are supposed to resolve conflicts in a great democracy, but our next one will not. The elites will face off against the elites to a standoff, and the issues animating the class war in both parties won't even be on the table. The structural crises in our economy, our government, and our culture defy any of the glib solutions proposed by current Democrats or Republicans; the quixotic third-party movements being hatched by well-heeled do-gooders are vanity productions. The two powerful forces that extricated America from the Great Depression—the courageous leadership and reformist zeal of Roosevelt, the mobilization for World War II—are not on offer this time. Our class war will rage on without winners indefinitely, with all sides stewing in their own juices, until—when? No one knows. The reckoning with capitalism's failures over the past three decades, both in America and the globe beyond, may well be on hold until the top one percent becomes persuaded that its own economic fate is tied to the other 99 percent's. Which is to say things may have to get worse before they get better.

Over the short term, meanwhile, the Democratic Establishment is no doubt wishing that Occupy Wall Street will melt away with the winter snows, much as its Republican counterpart hopes that the leaderless tea party will wither if Romney nails down the nomination. But even in the unlikely event that these wishes come true, it is not likely to be the end of the story. Though the Bonus Army was driven out of Washington in the similarly fraught election year of 1932, the newsreels they left behind turned out to be previews of coming attractions for the long decade still to come.

OWS camps care for local homeless

I guess the Occupy protests ARE different than the Tea Parties. After all, the TPs would never set up camps to feed, clothe, and heal the homeless like OWS does.

"Personal responsibility" not the "provide for the general welfare" is the TPs' mantra.

Just keep this in mind though next time you hear a report about a "drunk" or "violent" OWS protester: it could very well be a local homeless person who was allowed to join the protests.

'Occupy' camps provide food, shelter for homeless

October 22, 2011 | Associated Press

URL: http://online.wsj.com/article/AP1ad8063f8c3a427b92a69e3d55f982a1.html

OWS, that hurts: U.S. labor lost $500 billion since 1990

As Kaldor's Facts Fall, Occupy Wall Street Rises

By Peter Orszag

October 19, 2011 | Bloomberg

In Economics 101, students learn that the share of national income received by labor stays roughly constant with the share received by capital. This is the first of "Kaldor's stylized facts," articulated half a century ago by the Cambridge economist Nicholas Kaldor.

Recent experience betrays this lesson. Over the past two decades -- and especially since about 2000 -- the share of national income that flows into wages and other kinds of worker compensation has been plummeting in various countries.

Labor share normally bounces around over the business cycle, but given how long the decline has lasted, it can't be dismissed as cyclical. And this partly explains the kind of anger and frustration that is fueling the Occupy Wall Street movement worldwide.

The numbers involved are substantial: In 1990, about 63 percent of business income in the U.S. took the form of wages and other types of labor compensation, according to data compiled by the Bureau of Labor Statistics. By 2005, that figure had dropped to 61 percent. And by the middle of this year, it had fallen to 58 percent. (Similar declines have occurred in other data sets, but are milder when the analysis includes the government, rather than only the private sector.)

The difference from 1990 to today -- about 5 percentage points or so of private-sector income -- amounts to more than $500 billion a year. In other words, if labor's share hadn't fallen, labor income would be $500 billion higher this year.

Worldwide Decline

Similar decreases have been occurring in other countries. In Germany and France, the labor share fell about 4 percent from 1995 to today, and it dropped about 6 percent in Australia and Japan during the same period. As Francisco Rodriguez and Arjun Jayadev wrote in a November 2010 paper for the United Nations, the labor share across the globe has "been subject to a consistent decline over the last two decades, contrary to the (earlier) received wisdom of a constant labor share across most regions in the world."

Why the drop? Part of the reason is that the advanced economies have been shifting toward certain types of services and advanced manufacturing that have lower shares of labor income. But that explains only a small part of the decline. Even within such sectors, the share has been falling substantially. What's causing that?

The two primary drivers are globalization and technological change. From 1980 to 2005, as the world became more integrated, the effective labor supply available on a global basis expanded by 100 percent to 300 percent (depending on how the estimates are done). That increased competition has pushed labor compensation down in the industrialized economies.

The effects of technological change are more subtle. As automation reduces the demand for workers, the labor share initially falls, but in time, as people adjust their skills to suit the new technology, the effect is often reversed.

In a 2007 paper for the International Monetary Fund, Florence Jaumotte and Irina Tytell tried to parse the various causes of the declining labor share. In the U.S., the U.K., Australia and Canada, the economists concluded, labor globalization and technological change played roughly equal roles, and crucial ones at that. In European countries and Japan, technological change was more significant than labor globalization. Other factors --including unions and privatization trends -- have been found to be influential, but labor globalization and technological change loom as the dominant forces.

Further Decline Ahead

Over the next decade, the global pool of labor is likely to expand rapidly for many reasons -- as more workers in China obtain advanced educations and migrate to the coastal cities, for example.

(Interestingly, the labor share has also been declining significantly in China. Part of that appears to be a statistical error, and the remainder reflects an ongoing shift from agriculture to manufacturing. The early stage of that process often involves a decline in labor share, which is then followed by an increase as the development process continues.)

The labor share in the U.S. will probably bounce up and down as the economy slowly recovers. Unless we are somehow going to cut ourselves off from the world, though, we face the prospect of a continued downward trend in the labor share. The trite response to this reality is to call for more education and better training for workers, and more investments in research and development as well as infrastructure. It's true that all such actions would help. But they take time, and even then they would probably only take some of the edge off the decline, not fundamentally reverse it.

No wonder the frustrated Wall Street protesters lack any specific proposals for change: We are effectively missing $500 billion a year in wages, and no one has a credible set of ideas that would bring it back.

(Peter Orszag is vice chairman of global banking at Citigroup Inc. and a former director of the Office of Management and Budget in the Obama administration. The opinions expressed are his own.)

Study: Lobbying boosts firms' bottom line

On the one hand the conclusion of this study is kind of, well, "Duh," but on the other hand it should give us pause to consider if this really the best way for our democracy to work.

Although the analysis by Strategas of companies' federal lobbying and their profits from this investment leaves out banks because their lobbying spending is too small relative to their total assets, another study found that those banks *who spent heavily on federal lobbying got more bailout funds.

( *I employ the animate personal pronoun "who" instead of "which" because we all know that corporations -- including banks -- are people.)

Indeed, I was tickled by this remark from the stoutly laissez-faire Economist magazine: "it seems remarkable that companies would do anything but lobby," based on their return on investment from lobbying.

Moreover, this study is quantitative evidence that the Occupy Wall Street movement is closer to the mark than the Tea Parties, which seem to have lost their mojo, at least with the American people.

People like Rep. Eric Cantor have argued the reason the Tea Parties are OK, and OWS is out of bounds, is that the TPs address the government with their grievances, they don't go after private businesses and private citizens like OWS does. But Cantor is missing the point. Many of the protesters, and certainly yours truly, have pointed out it's the corrupt nexus of government policy and corporate lobbying that is to blame for many of our nation's troubles, and the record inequality we face.

What was a national problem has become a national crisis: the U.S. government is now a captive client of corporate donors. And since financial firms are the biggest donors to, and beneficiaries of, the U.S. government, Wall Street is the correct target and symbol of Americans' growing discontent.

Money and politics

Ask what your country can do for you

October 1, 2011 | The Economist

MUCH as some businesses whine about government intrusion, others do pretty well out of it. An index based on the amount of lobbying that American firms do has outperformed the broader market since its creation in 2008; data going back to 1998 show that it has done better over the longer term, too.

The index is produced by Strategas, an investment-research firm. A first effort, to rank firms on the amount they spend on lobbying, was no use: it just corresponded with the largest firms. Strategas now looks at the intensity of lobbying—expenditure as a percentage of assets—to create an index of 50 firms that is revised quarterly.

In aggregate the results have been stunning, comparable to the returns of the most blistering hedge fund. The index has outperformed the S&P500 by 11% a year since 2002 (see chart). There have been bumps along the way: the index fell sharply in 2008 and again this summer, when debt-ceiling brinkmanship raised the prospect of government austerity. But at other times, it seems remarkable that companies would do anything but lobby. A particularly vivid example was in 2004, when an aggressive corporate campaign prompted Congress to grant a one-off tax holiday for American companies to repatriate foreign earnings. The outright return on lobbying costs, according to one of the various studies that served as inspiration for the Strategas index, was $220 for each $1 spent.

Firms that qualify for the index tend to be under the government's cosh. Tobacco companies are routinely threatened with every tax and sales restriction going, and are perennial fixtures on the list. So too are defence contractors. This year witnessed the entry into the index of several private-education providers, an area that has been under scrutiny by the administration of Barack Obama, as well as medical firms worried about the myriad loose ends to be tied up in Mr Obama's health-care plan.

Banks do not make the list because their balance-sheets are so leveraged that lobbying expenditures are small as a percentage of assets. That omission probably flatters the index in recent years but harms it in earlier ones. Finance still makes an appearance, most recently through Federated Investors (a provider of money-market funds) and the two ratings agencies (Moody's and McGraw-Hill, the parent of Standard & Poor's). Other index members include Monster Worldwide, a jobs website; Brown-Forman, maker of Jack Daniel's whiskey; and CBS, a broadcaster.

Various laws have been proposed or enacted to curtail lobbying, with limited success. The most effective answer may be the most straightforward: cut government spending. Strategas has just developed an index for that unlikely eventuality, allowing investors to short firms that derive the greatest proportion of their sales from federal-government contracts.

The 99 Percent v. the 53 Percent

More U.S. households have become exempt from federal income tax because they earn too little income, and because Bush lowered their taxes.

So this "53 Percent" movement is basically blaming poor people for being too poor, and Democrats for Republicans' tax cuts. Makes no sense. But when do they ever?

99 Percenters, Meet the 53 Percenters

In response to Occupy Wall Street, some conservatives are blasting the 47 percent of Americans who don't pay federal taxes. Do they have a point?

By Annie Lowrey

October 11, 2011 | Slate

The slogan doesn't exactly sing: "We are the 53 percent!" But this new campaign, a conservative answer to Occupy Wall Street, has some verve. The 53 Percenters are responding to We Are the 99 Percent, an inequality-focused online Tumblr designed to shame—or at least call out—the top 1 percent of earners who are taking bigger and bigger pieces of the pie.

The 53 percent say everyone should stop moaning, quit pointing fingers at Wall Street, and pay their damn taxes. (The name refers to the fact that only 53 percent of households pay federal income tax these days.) The brainchild of Erick Erickson of RedState.org, the 53 Tumblr features comments like: "I don't blame Wall Street. Suck it up you whiners. I am the 53 percent subsidizing you so you can hang out on Wall Street and complain." (That's from Erickson's inaugural post, by the way.)

Rhetorical fervor aside, the 53 Percent campaign does raise an interesting question: What is going on with that other 47 percent? Why are so few people paying income taxes? For the answer to that question, we turn to the nonpartisan Tax Policy Center, which released a study on the subject this July. (The TPC also put out the initial report with the 53 percent number.)

The short answer is: deductions and poverty. About half of households within that 47 percent do not end up paying federal income tax because they qualify for enough breaks to cancel their tax obligations out. Of that group, 44 percent are claiming tax benefits for the elderly, like an exemption for Social Security payments. And 30.4 percent are claiming credits for "children and the working poor," like the child-care tax credit. The remainder get breaks for investment income, spending on education, itemized deductions, and a mish-mash of other things. When combined, it's all enough to cancel out their income tax requirements.

In short, it is not that they are not paying their taxes. It is that the country's tax structure lets them off the hook. Indeed, you can draw a straight line between the Bush tax cuts and the growing number of households exempted from income tax. For instance, the 2001 cuts, extended under the Obama administration, doubled the child tax credit from $500 to $1,000 and expanded eligibility for the Earned Income Tax Credit among married taxpayers. Additionally, the Bush tax cuts lowered income taxes in every bracket, making it easier for a household's liability to get fully offset by deductions and credits. And on top of all that, the stimulus bill introduced a host of further tax cuts.

That covers about half of the households that don't pay any federal income taxes. The other half of households are just too poor to pay them. The Tax Policy Center provides a handy example: A couple with two children earning less than $26,400 per year pays no income tax if it takes standard deductions and common exemptions, for instance. "The basic structure of the income tax simply exempts subsistence levels of income from tax," TPC's Roberton Williams writes.

That pool of too-poor households has grown much bigger because of the recession and its aftermath: Average incomes have kept on declining even though the recession has officially ended, and millions of households have lost one or both of their wage-earners. Households are earning about 10 percent less than they did in 2007. About 12 percent of families live in poverty. That means a lot of folks simply aren't eligible for income tax.

So what of the claim that the 53 percent are subsidizing the 99 percent? Well, just because 47 percent of households do not pay federal income tax does not mean that they do not pay any federal taxes. Indeed, almost everyone pays some: There are federal taxes for Social Security and Medicare, on gas, alcohol, and cigarettes. Plus, there are also state and local taxes, and property taxes. You'd have to be freegan to escape paying any tax at all.

Suze Orman: 'Occupy Wall Street': Approved!

Normally I wouldn't pay any attention to the likes of Suze Orman; but since she's precisely the kind of person who resonates with middle America and Tea Party types, I'm paying attention now. She just happens to be spot on.

Occupy Wall Street: Approved!
By Suze Orman
October 11, 2011 | Huffington Post

URL: http://huffingtonpost.com/suze-orman/occupy-wall-street-approv_b_1005128.html

Ben Stein, a snarky, greedy old shill for Wall Street, posts something

I'm reserving judgment about the effectiveness of the Occupy Wall Street protestors' methods, but not their decision to protest, or the selection of their target -- they're right on.

Nevertheless this smug little missive from droning Hollywood nerd Ben Stein rubbed me the wrong way, and really illustrated several common fallacies:

1) "Greed is human nature." (Thus it's unavoidable, thus it's OK.) Look, human nature covers absolutely everything that any human being has ever done. It's also human nature for humans to give away millions of dollars, to volunteer for worthy causes, to sacrifice their own life and limbs, etc. The human nature argument thus is a throw-away unless you can prove the opposite isn't also true.

2) "Wall Street was stupid (not just greedy)." This one really gets me. Sometimes it's used by bailout proponents who argue that Wall Street wasn't greedy at all, just dopey. (And their stupidity is supposed to make us feel better about handing them all that bailout cash how??) Yeah, right. I'm sure Hank Paulson, Larry Summers, and Bob Rubin think of themselves as dufuses who messed up real bad -- and they're gonna confess to their stupidity any day now.

Anyway, let me get this straight: we had to bail out the banks because they were so stupid, yet homeowners who bought the line from mortgage bankers and realtors that home prices only go up forever were stupid therefore they need to "learn their lesson" and "take their medicine"?? Indeed help for normal people, not just banks, is one of the protesters' demands, and this demand seems to have been intentionally dismissed by our politicians because it might interfere with the blessed bank bailouts.

3) "Conventional wisdom = liberalism = whatever the status quo is." This makes no sense. The status quo is that Wall Street banks are enjoying trillion-dollar bailouts to fund their huge salaries and bonuses while normal Americans continue sink into debt and poverty and can't drive our consumption-driven economy back to health. And it's supported by both parties, not just Democrats. This is the outcome which "conventional wisdom" in America has supported, from Obama to Boehner to the editorial pages of all the major newspapers. So let's not confuse the status quo with liberalism, certainly not with progressive politics. Progressives never supported the bailouts; and they have always called for bigger fiscal stimulus, real mortgage relief for homeowners and Main Street businesses, and prosecution of Wall St.'s fraud and financial crimes -- to no avail.

4) "Young protesters want government to take care of them, like Mommy and Daddy do." Really? Are you sure that's what they're out there demanding? I never heard that. Since when do Americans not want to work, especially those who spent 4+ years in college studying and taking out debt in the hopes of landing a job to pay it back? If this is what's really going on, then America is sick indeed. But I don't buy it. You'll have to prove this one to me, because that's not the America I know, or any of the Americans whom I know. 99% of Americans wants a good job and the independence, gratification, and social acceptance that comes with it.

5) "Some on Wall Street are crooks and some are fools." Stop right there. Last time I checked, crooks are supposed to be arrested and get fined and/or go to jail. How many bank CEOs have gone to prison or faced any prosecution for causing the financial crisis? [Crickets chirping]. That's right. And what about the potential hundreds of billions of dollars in settlements to benefit ordinary people who were fleeced by Wall St., settlements that may be pre-emptively shelved without due process or any kind of vote due to political pressure by a bipartisan consensus including President Obama himself?

6) "Shut up and get to work." Who says they're not working now? They're out there defending all of us! We should be thanking them. And the hard-working Tea Parties should be out there with them. --> By the way, last time I checked Herman Cain wasn't working either. Get a job, deadbeat!

Go Occupy Yourselves, My Darlings

By Ben Stein

October 7, 2011 | American Spectator

[...]

On the radio, they played a story about the demonstrators on Wall Street demonstrating –literally -- against human nature -- greed and stupidity. Literally. Many of them were -- so we were told --recent college graduates who could not get employment.

Various leftists came on and said how cruel Wall Street was and how they should be blamed for those poor unemployed college kids' problems.

Then came Herman Cain. He said, very simply, "If you are a college graduate and you can't get a job, you shouldn't blame Wall Street. You shouldn't blame the banks. You should blame yourself."

A Daniel come to judgment. The sun suddenly came out.

The next step, I am sure, by the way, for the "Occupy Wall Street" crowd is for Anderson Cooper, Bill Maher, and Jon Stewart, the trifecta of conventional wisdom's failed liberalism, to come down to Wall Street and join the masses in demanding more of our tax money so they can all be supported as novelists and movie directors.

You poor kids. You are basically asking to be supported and taken care of by Mommy and Daddy. Wake up, kids. Wall Street is you, with all of your wants and needs and wishes, only they have the balls to go out and work for it. Sometimes they are crooks and sometimes they are fools -- but you know what? So are all of us.

Listen to Mr. Cain. Shut up and get to work.