Will: In lame defense of tax inversions

In defense of foreign tax inversions by U.S. corporations, conservative George Will is obliged to argue that company managers have an obligation to company shareholders to maximize returns. Yet this is an assumed obligation, not a legal obligation, and not necessarily a moral one either, as the case of social enterprises proves. 

Moreover, I haven't heard about any shareholders' meetings where the crowd clamored for the corporation to abandon America and set up shop in Ireland or the Bahamas. Or about a Wall Street corporate analyst who ever urged such? Have you?  

The public's urging corporations like Walgreen's to remain in the U.S. and pay taxes where they actually operate and retain their headquarters is likewise a moral argument. Which is a stronger moral argument, patriotism or maximizing shareholder value? That's for individual companies' directors to decide; but nobody should dismiss patriotism as irrelevant. Nor should conservatives like Will, so fond of moralizing in other contexts, criticize our leaders such as President Obama for first exercising moral suasion to curb tax inversions before resorting to the big hammers of legislation or executive orders.

Next, Will labels the "race to the bottom" (something I have written about often) as "entrepreneurial federalism." This term is the acme of goobledygook: take two unrelated words that mean something, cram them together, and forfeit the meaning of both. Conservatives like Will assure us all the time that government cannot be entrepreneurial; that's business's turf. And federalism refers to various forms of political organization where national sub-units are subordinated to the national government in some matters, but retain their right to act freely in others. Federalism has nothing to do with states' respective policies and incentives meant to attract capital investment; nor does federalism refer to interstate economic competition. So, put these two terms together and you get... nothing. (Tom Friedman probably wishes he'd thought of it first.)

Also, Will summarily dismisses the idea that corporations that get rich partly thanks to U.S. roads, ports and other infrastructure, the U.S. legal system, patent protection, U.S. trade negotiations, not to mention U.S. public schools that educate their workers to be the most productive in the world, have some moral obligation to the U.S. to pay taxes or give something back. Corporations aren't people! say progressives. So Will replies, Then non-people cannot have any moral obligations!  Such petulance is typical of Will. 

Moral obligations are of the company's directors, primarily, and secondarily of the shareholders to keep the directors in line. Moral obligations are not necessarily legal obligations. Whereas the Citizens United and the Hobby Lobby cases turned on whether corporations had some of the same legal (First Amendment) rights as people: to make political donations and practice religion, respectively. Morality and law should not be conflated.

Beyond that, Will unwittingly offers up two contradictions in his own op-ed, and perfectly illustrates why the U.S. cannot win the race to the bottom. 

First, he tells the story how Airbus located a subsidiary in Alabama, a right-to-work state, "because capital, being mobile, goes where it is wanted and stays where it is treated well." Will picked an unfortunate example, because Airbus, as a consortium of European aviation firms, is heavily dependent on EU subsidies and contracts for its survival. Moreover it is headquartered in France. And Airbus employs over 60,000 workers in pro-union, "socialistic" Europe.  So Airbus would never dare to "invert" outside the EU to win some tax benefits! Obviously, multinational companies make their plans based on much more than tax rates and cost of wages.

Second, he tells the story how Maytag moved its production from Illinois to Mexico because, allegedly, Illinois was not a right-to-work (read: anti-union) state. Yet he doesn't attempt to explain why Maytag didn't move to a right-to-work state instead. Because he can't. Because no matter how low wages and taxes will be in Alabama or elsewhere, they will always be lower in some poorer, developing nation.  The U.S., the largest economy in the world, cannot hope to attract and retain businesses by trying to be "poorer" than poorest nations; or lower its taxes to the rates of tiny islands like Bermuda or New Zealand.  That's idiotic. Yet that's just what conservatives like Will advise: "the sensible corporate tax rate would be zero." Whoa! "This is so because," explains Will, "corporations do not pay taxes, they collect them, necessarily passing on the burden as a cost of doing business."

Hmm... I suppose that likewise, ordinary citizens do not actually pay taxes; they simply collect them from their employers, passing on the burden as a cost of staying alive.

Moreover, the Maytag example betrays Will's muddled thinking: he starts out discussing tax inversions, then switches to unions and labor. These are completely separate issues! Indeed, Walgreen's and other tax inverters have not publicized any plans to shut down their U.S. locations; they simply wish to re-locate on paper, for the tax benefit. And in fact Whirlpool Corporation, which owns Maytag, is based in Benton Harbor, Michigan, not Bermuda or Ireland.

Will's lame defense of tax inversions betrays an inverted worldview unfortunately shared by many conservatives: Government is but a burden and an annoyance barely tolerated by corporations, for whom the nation exists.  

This is not to say that the nation exists to serve the government. No.  Even so, I'll put Big Government above Hobby Lobby, Walgreen's or the Kochs any day, because at least I have some say in what my government does; and government is legally accountable to all its citizens, not just the wealthy.

In a stew over inversions

By George Will

August 15, 2014 | Washington Post

URL: http://wapo.st/Vt8dhN

Germans have united against their old partner Russia (NYT)

Good for the Germans!:

Seventy percent of 1,003 [German] adults polled last week by Infratest dimap for the public broadcaster ARD approved of stricter sanctions; just 15 percent viewed Russia as a reliable partner in a poll with a three-percentage-point margin of sampling error.

Germans are certainly feeling the pain of economic sanctions on Russia, much, much more so than the U.S., but without their leadership in the EU, there cannot be a united European response to Russian aggression against Ukraine. The UK, Netherlands and Eastern European states are not enough; the core of "Old Europe" must be on board.

Clearly, the downing of MH flight 17 was the straw that broke the camel's back vis-a-vis EU and Western public opinion; the attack by Russian-backed fighters in Ukraine showed Russia to be an unpredictable, reckless and dishonest "partner."  

Indeed, said German Social Democrat Gernot Erler, former deputy foreign minister and now commissioner for Russia and former Soviet states:

"The policy of Vladimir Putin is destroying reserves of trust with breathtaking speed. Russia is not naming its goals and has suddenly become unpredictable. And being unpredictable is the greatest enemy of partnership."

That phrase jumped out at me: "Russia is not naming its goals."  That's precisely it.  Putin seems to be taking a wait-and-see approach, with some weapons and fighters here, some diplomatic and economic pressure there, but not really saying what he thinks would be a realistic and desirable outcome for Russia. I suspect that Putin's cagey silence is as much about avoiding uncomfortable questions at home (where feverish nationalism could turn on its master) as it is about keeping the West guessing.

Yes, Putin has urged the establishment in Ukraine of a unique version of "federalism" for "Novorossiya" (Luhansk and Donetsk), where each federal state has its own domestic and foreign policy; but such a confederate (not federal) model would be completely unacceptable for Ukraine and the West, and certainly not practicable: it would make Ukraine a hobbled, disunited state always prone to political infighting. If this is Putin's ultimate goal then it's understandable why he cannot openly say so.

Ukraine Crisis Hardens Germany Against Russia, an Old Partner

By Alison Smale

August 13, 2014 | New York Times

URL: http://www.nytimes.com/2014/08/14/world/europe/ukraine-crisis-hardens-germany-against-russia-an-old-partner.html

Referendums in east Ukraine were a Russian farce

My man Mark Rachkevych at the Kyiv Post nailed it. I especially liked this paragraph [emphasis mine]:

When Russian Foreign Minister Sergei Lavrov and other Kremlin officials say that Kyiv should negotiate with the “southeastern regions,” they mean with people that are under their control. They are not genuine leaders who enjoy popular, grass-roots support. They are lackeys financed and armed from abroad who kill, torture, and kidnap innocent people, and who have terrorized millions more. After all, recent surveys say that 70 percent of residents of southeastern Ukraine are for a united country.

Rachkevych concludes with this important warning [italics and emphasis mine]:

Still, Moscow’s pressure has already moved the goal posts in Kyiv’s policy. Ukraine’s interim government has signaled it is willing to allow for regional and local governments to set language policy, among other compromises. Decentralization is also on the table: letting local governments expand their tax bases, establish municipal police departments as well as other policy decisions that would be delegated to them.

And the calls for Crimea's return are muted as the interim government struggles for survival until the May 25 presidential election.

Some steps, such as the decentralization of government, are necessary to shed the Soviet legacy of governance, but not federalization, which is the Kremlin’s code wor for dismembering Ukraine.  Federalization is a powerful, unifying force when a nation-state is being formed. It has the opposite effect when one exists like Ukraine.

That’s precisely why the May 11 mimicry of a vote is a farce. It was the latest, unequivocal Russian step to dismantle Ukraine. 

That is why the West -- and the U.S. especially! -- cannot play dumb or give in to Putin's cynical gambit to dismantle Ukraine as a functioning state.

Why the poll on self-rule was a farce

By Mark Rachkevych

May 12, 2014 | Kyiv Post

Acting President Oleksandr Turchynov rightfully called the May 11 ballot in eastern Ukraine's Luhansk and Donetsk oblasts a “farce.”

But it wasn’t a travesty because it violated the constitution, or that more than 100,000 pre-completed ballots were seized in favor of secession ahead of the vote. Or that there was a dismally low turnout, multiple voting occurring, or that proof of residence wasn’t a criterion to cast a ballot.

It was a sham because Moscow was behind the vote, just as it was behind the annexation of Crimea and now, the slow-motion invasion of eastern Ukraine, and the recent unrest in Odesa, Kharkiv and other regions.

It is all a Kremlin charade to impose its will on and cover up a foreign policy debacle on Ukraine after the democratic EuroMaidan Revolution in February toppled the criminal regime of disgraced ex-President Viktor Yanukovych. Putin and his minions in the state-controlled press corps had defended Yanukovych’s corrupt government until the very end.

EuroMaidan signaled the second slap in the face of Russian President Vladimir Putin, who ended up on the wrong side of history – again – after twice backing the ex-convict Yanukovych (the first time was during the 2004 presidential election that led to the Orange Revolution and Viktor Yushchenko's election as president).

So, the former KGB colonel, in his unabashed contempt for Ukraine as a nation, had to create an alternative, make-believe reality to invade.

Eschewing accepted policy norms, and institutions like the Organization for Security and Cooperation in Europe or the United Nations to voice his grievances – primarily that his “Russian compatriots” were under threat of violence and were being discriminated – Putin primitively used force. And he’s shown he is willing to expend more resources than the West to get his way despite a looming third round of sanctions that would hurt Russia’s economy. Those resources include a cadre of media hounds who not only distort the news, but also manufacture it to shameless depths of bawdiness.

Just as the world has watched Russia transform into a fascist state, there is mounting evidence that the unrest in eastern and parts of southern Ukraine are led from Moscow and financed either through state-owned banks or Yanukovych and his inner-circle. Ukraine’s Security Service has captured Russian agents and military officers, as well as other subversives who were trained and received instructions from their handlers in Crimea and elsewhere. Russian sleepers have been activated and mercenaries with combat experience in the Russian military are on Ukrainian territory using Russia-supplied arms and weapons.

When Russian Foreign Minister Sergei Lavrov and other Kremlin officials say that Kyiv should negotiate with the “southeastern regions,” they mean with people that are under their control. They are not genuine leaders who enjoy popular, grass-roots support. They are lackeys financed and armed from abroad who kill, torture, and kidnap innocent people, and who have terrorized millions more. After all, recent surveys say that 70 percent of residents of southeastern Ukraine are for a united country.

Kyiv has made it clear that it won’t engage with armed terrorists hiding behind masks and human shields, and likewise, whose chief handlers are sheltered behind the Kremlin’s walls. Still, Moscow’s pressure has already moved the goal posts in Kyiv’s policy. Ukraine’s interim government has signaled it is willing to allow for regional and local governments to set language policy, among other compromises. Decentralization is also on the table: letting local governments expand their tax bases, establish municipal police departments as well as other policy decisions that would be delegated to them.

And the calls for Crimea's return are muted as the interim government struggles for survival until the May 25 presidential election.

Some steps, such as the decentralization of government, are necessary to shed the Soviet legacy of governance, but not federalization, which is the Kremlin’s code wor for dismembering Ukraine. Federalization is a powerful, unifying force when a nation-state is being formed. It has the opposite effect when one exists like Ukraine.

That’s precisely why the May 11 mimicry of a vote is a farce. It was the latest, unequivocal Russian step to dismantle Ukraine. Sadly, Russia is succeeding. It still has the initiative and Ukraine's government, the European Union and the United States will have take tougher actions quickly to reverse the Kremlin tide.

Russia reveals its desired outcome in Ukraine

I translated the following article from Russian to English.  For all you who thought that the U.S. and the EU were "meddling" in Ukraine's affairs, what do you call this?  

Indeed, Russia is dictating a complete reformation of the Ukrainian state, under implicit threat of arms.  

Russia wants a weak, corrupt Ukraine that will not abide European norms and values.  This old strategy is known as "divide and conquer."  

Russia "has shown its cards"

By Aleksandr Gundlah

March 17, 2014 | 15Minut

The Russian Foreign Ministry calls on an international group of "aid to Ukraine," which should turn Ukraine into a non-aligned federation without the Crimea with two official state languages.

This is stated in the statement of the Russian Foreign Ministry, which voiced Russia's proposal.

Russia has once again assured that it is not involved in the situation in Ukraine, which "is the result of a deep crisis of the Ukrainian state that led to the polarization of society and acute exacerbation of antagonism between different parts of the country."

To overcome this "internal conflict" Russia proposes to create a support group for Ukraine.

Russia suggests that this group should implement the agreements of February 21 and surrender "illegal weapons", the release of buildings and streets [from occupation by activists], and investigations of deaths in Kyiv.

And "without delay to convene by a decision of the Verkhovna Rada [national parliament of Ukraine] of a constitutional assembly, with equal representation of all Ukrainian regions to prepare a new federal constitution."

This constitution, according to Russia, should establish a federal system of Ukraine, its military and political neutrality, the state status for the Russian language, human rights of all minorities, the election of local authorities and non-interference in the affairs of the church.

Foreign Minister even told how a constitution should be adopted -- by a national referendum .

After that Russia wants general and local elections for "the legislative and executive authorities in each subject of the [new] federation."

Separately, Russia insists that the group should "recognize and respect the right to determine its own destiny Crimea according to the results of the free will of its population in the course of the 16 March 2014 referendum."

Again Russia proposes that the new territorial integrity and sovereignty of Ukraine will be guaranteed by Russia, the EU and the U.S. according to a UN Security Council resolution.

Ukraine's Maidan activists are not 'fascists'

Disturbingly, some of the Western left wing and even some of the media have adopted the Russian propaganda meme that protesters and activists centered on Ukraine's Maidan are "nationalists" and "fascists."  

It is strange then that Ukraine's power structures and military have given themselves over so willingly, bloodlessly, to a group of fascists. Does that make Ukraine's military leadership fascistic?  Were they not fascist a month ago under President Yanukovych?  Absurd premises lead to absurd conclusions.

Only in Ukraine is it "nationalistic" to insist that in the one country on earth where people speak Ukrainian that Ukrainian should be the official state language, and receive other forms of protection.  Only in Ukraine is it "nationalistic," not patriotic, to proclaim, "Glory to Ukraine," (I myself was witness to an incident when these words provoked a fistfight), or to sing the national anthem.  

If Western liberals were to judge France by the same standard as they do Ukraine, then they must label them a bunch of "French nationalists" whose borders don't deserve sovereign protection.  Likewise, that makes American Republicans who rail against "press 2 for Spanish" or sing "The Star Spangled Banner" at ballgames a bunch of fascist nationalists.

And yet even those comparisons are not quite apt, since native French and English are spoken in other countries and on other continents. Not so with Ukrainian. If Ukrainian dies in Ukraine, it dies in the world. And with it would be lost the richness of Ukrainian culture. Ukrainian is worth fighting for, worth protecting.  Yet any casual visitor to Ukraine would get the impression that Russian, not Ukrainian, gets preferential treatment.  Most television shows, newspapers, magazines and books are in Russian only. Most films are shown in Russian, albeit with Ukrainian subtitles -- a modest victory for Ukrainian "nationalists." 

Indeed, outside Ukraine, the "great and powerful" Russian language has a huge country of 142 million people to protect it: Russia. Therefore, Russia doesn't need Ukraine for the Russian language to flourish. Anyhow, nobody from any Ukrainian political party has ever proposed legislating what language people speak in their everyday lives -- and yet the lumpen on the streets of the South and East of Ukraine firmly believe this lie.  In this lie, nurtured cynically by Russia, lies much of ethnic Russians' support for Russia's annexation of Crimea....

Next, there is the "nationalist" Svoboda (Freedom) party in Ukraine, whose leaders said that Jews in league with Russia have sought to keep Ukraine down. Granted, this was several years ago, but still it's cause for the West to be deeply concerned, right?  Well, not so much. Svoboda is still a small party and it doesn't stand a chance of winning many seats in Parliament or in the Cabinet of Ministers.  

Moreover, Jews were activists on Maidan.  Indeed, there was a Jewish brigade on Maidan including "four Israelis with combat experience."  I've heard of "self-hating Jews," but this would be a new extreme, if indeed Israeli Jews came to Ukraine to support anti-Semitic fascists!  

And Israel's Haaretz newspaper recently examined the level and anti-Semitism among pro-Maidan forces and concluded: no big deal.  Jews were among the pro-Maidan activists and at least four Jewish protesters were killed by Berkut special police.

So what other "evidence" does Putin's Russia and the deluded Western left offer of Ukrainian fascism? The fact that many Maidan activists revere Ukrainian nationalist freedom fighter Stepan Bandera. He is a controversial historical figure, to say the least. I won't go into the entire history of it now. It suffices to say the mere mention of his name is enough to cause spontaneous brawls in both Ukraine and Russia. You can make up your own mind about Bandera. 

Let me offer this: there are many times more statues of Lenin in Ukraine than of Bandera.  "Anti-Maidan" and "pro-Russian" activists in Ukraine have banded together to protect Maidan protesters from tearing down statues of Lenin as they did in Kyiv and other cities. Lenin is a symbol of Russian oppression and terror -- including two Soviet-imposed famines on Ukraine when millions died of hunger. It is now acknowledged by the U.S. and the West as genocide. (Russia, as the protector of the Soviet legacy, not surprisingly, disagrees). Thus reasonable people would cast suspicion on anybody, or any group, defending the legacy of Lenin. And yet it is not so.  And yet Bandera is called a "mass murderer" by many ethnic Russians in Ukraine. For them Bandera, not Lenin, is the bogeyman of Ukrainian history. Go figure.

(An epitaph on Bandera: two of his brothers died in the Nazi concentration camp in Auschwitz; his father was executed by the Soviets; and three of his sisters were sent to Soviet gulags in Siberia.)

But all the above-mentioned is academic. Anybody who bothered to go to Maidan could see that it was not decorated with swastikas, hidden fascist symbols, or echoing with anti-Semetic rhetoric. These were normal people. Scratch that -- better than normal. These were, and are, the most liberal, progressive people in Ukraine: doctors, teachers, artists, entrepreneurs, musicians, lawyers, journalists, students, and human rights activists. These are the dynamic people who make Ukraine go. And as the country's most honest and honorable, they were the most likely to suffer under President Yanukovych's corrupt and lawless regime.

Therefore it's painfully unfair of the West to dismiss Ukrainians' struggle -- which was peaceful and orderly until President Yanukovich tried to evict unarmed people with deadly force from Independence Square -- with terms like "fascist," "neo-Nazi," or "nationalist."  In our ignorance and haste to judgement, we should not throw out such loaded terms willy-nilly. 

I challenge anybody to find a report from a Western journalist on the ground on Maidan who corroborated Russia's fascist or nationalistic narrative of events there. It was perhaps the most well-covered revolution in history; beyond the Western media like BBC, it was YouTubed, Facebooked and Tweeted by thousands of people. If there were rampant fascist sentiments there -- not just a few neo-Nazi malcontents -- then we surely would have seen their faces and heard their voices. 

And finally, regarding neo-Nazis, Putin had best remove the beam from his own eye before remarking on the speck in Ukraine's (Matthew 7:5).  Putin tolerates an active and violent neo-Nazi movement within Russia. He finds them useful to conduct planned attacks and pogroms on gays and national minorities, mostly from the Caucasus. (For many graphic examples, go to YouTube and search "skinheads Russia.")

Putin should send his Black Sea Fleet out of Crimea to fight Russian fascists at home!

UPDATE 1 (05.03.2014):  My friend TK wanted to add something about Stepan Bandera. I haven't fact-checked it, only cleaned up the grammar & spelling:

Just FYI: about Nazi collaborators among Ukrainian nationalists. Many tend to forget during WWII only 14,689 Ukrainians collaborated with Hitler, but 1,150,000 Russians collaborated with Hitler and almost all European countries either collaborated as a whole or had their own collaborators with Hitler. Bandera spent one year in Berlin prison, received proposal to diversify (?) the rear of Red Army, refused to collaborate and then was confined for three years in a [Nazi] concentration camp Sachsenhausen. Bandera announced Ukraine was an independent country in 1941 when Hitler occupied Ukraine and he never collaborated with Hitler. The second person after Bandera was Lev Rebet, who spent three years in Auschwitz concentration camp (he was liberated in 1945), so all those insinuations about anti-Semitic Bandera are just Soviet propaganda. Both were killed by the same KGB officer.

There has been so much Russian propaganda on each and every possible social media, including many in English. What Russia is definitely great at is propaganda and plotting diversions internally and externally. But it is a devastating loss to the Ukrainian nation (as to any other as a matter of fact) not to know its own history. Seventy years of Soviet propaganda and 20 years of not paying attention to education, even worse the last four years of returning back to the distorted Soviet version of history led to absolute ignorance of own country and own identity that we observe now in the east-south and Crimea. Even if you ask people there who is Bandera and what he did, the only answer you will get is he is a fascist, but nothing else. Even more, most people in the rest of Ukraine will not be able to tell you much either with an exception they would not call him fascist. I strongly believe that making the population un-educated, illiterate and uninformed is the way for corruption, destruction and dictatorship. If you have sheep, not a nation, it is very easy to rule them. That relates to any country, but Russian rulers have mastered this tactic.

UPDATE 2 (05.03.2014):  This should ease the fears in the East and South of Ukraine that the new government is fascist: it's talking seriously about federalism, something the ousted Party of Regions never achieved (because they didn't want to). Reported Reuters today [emphasis mine]:

[Prime Minister] Yatseniuk has been gradually unveiling the outlines of the new government's plans for bringing the former Soviet republic's economy back from what he says is the edge of an abyss.

Earlier this week he announced plans to trim government spending by up to about 16 percent and said the government would meet any conditions set by the IMF to secure a new loan package. 

On Wednesday he said it was vital to give more authority to the regions, hungry for financial and, in some cases, for more political independence.

"One of the main things the new Ukrainian government must do is dismantle the centralized power created in the last four years," Yatseniuk said, referring to Yanukovich's rule.

Although this is part of a long-running debate and applies to all regions, it can be seen partly as a gesture to Russian speakers in the east at odds with the central government.  

UPDATE 3 (06.03.2014):  Here is yet more evidence that fascism and anti-Semitism aren't an issue on Maidan or Ukraine's new government: an "Open letter of Ukrainian Jews to Russian Federation President Vladimir Putin," dated March 4, 2014. 

Krugman: Austerity has been a debacle

Krugman is right to remind us that the U.S., with its federal system, has had its own brand of fiscal austerity: states whose constitution requires a balanced budget have been forced to cut back spending drastically. Much of the federal stimulus money has gone to shore up those same state budgets.

The Austerity Debacle

By Paul Krugman

January 29, 2012 | New York Times

Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure — changes in real G.D.P. since the recession began — Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground.

Nor is Britain unique. Italy is also doing worse than it did in the 1930s — and with Spain clearly headed for a double-dip recession, that makes three of Europe's big five economies members of the worse-than club. Yes, there are some caveats and complications. But this nonetheless represents a stunning failure of policy.

And it's a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years.

O.K., about those caveats: On one side, British unemployment was much higher in the 1930s than it is now, because the British economy was depressed — mainly thanks to an ill-advised return to the gold standard — even before the Depression struck. On the other side, Britain had a notably mild Depression compared with the United States.

Even so, surpassing the track record of the 1930s shouldn't be a tough challenge. Haven't we learned a lot about economic management over the last 80 years? Yes, we have — but in Britain and elsewhere, the policy elite decided to throw that hard-won knowledge out the window, and rely on ideologically convenient wishful thinking instead.

Britain, in particular, was supposed to be a showcase for "expansionary austerity," the notion that instead of increasing government spending to fight recessions, you should slash spending instead — and that this would lead to faster economic growth. "Those who argue that dealing with our deficit and promoting growth are somehow alternatives are wrong," declared David Cameron, Britain's prime minister. "You cannot put off the first in order to promote the second."

How could the economy thrive when unemployment was already high, and government policies were directly reducing employment even further? Confidence! "I firmly believe," declared Jean-Claude Trichet — at the time the president of the European Central Bank, and a strong advocate of the doctrine of expansionary austerity — "that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today."

Such invocations of the confidence fairy were never plausible; researchers at the International Monetary Fund and elsewhere quickly debunked the supposed evidence that spending cuts create jobs. Yet influential people on both sides of the Atlantic heaped praise on the prophets of austerity, Mr. Cameron in particular, because the doctrine of expansionary austerity dovetailed with their ideological agendas.

Thus in October 2010 David Broder, who virtually embodied conventional wisdom, praised Mr. Cameron for his boldness, and in particular for "brushing aside the warnings of economists that the sudden, severe medicine could cut short Britain's economic recovery and throw the nation back into recession." He then called on President Obama to "do a Cameron" and pursue "a radical rollback of the welfare state now."

Strange to say, however, those warnings from economists proved all too accurate. And we're quite fortunate that Mr. Obama did not, in fact, do a Cameron.

Which is not to say that all is well with U.S. policy. True, the federal government has avoided all-out austerity. But state and local governments, which must run more or less balanced budgets, have slashed spending and employment as federal aid runs out — and this has been a major drag on the overall economy. Without those spending cuts, we might already have been on the road to self-sustaining growth; as it is, recovery still hangs in the balance.

And we may get tipped in the wrong direction by Continental Europe, where austerity policies are having the same effect as in Britain, with many signs pointing to recession this year.

The infuriating thing about this tragedy is that it was completely unnecessary. Half a century ago, any economist — or for that matter any undergraduate who had read Paul Samuelson's textbook "Economics" — could have told you that austerity in the face of depression was a very bad idea. But policy makers, pundits and, I'm sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their willful amnesia.

Texas shows why Big Guvmint is needed

It must be hard being a thoughtful Texan. Sure, you get to be proud of its bigness, its cowboy lore, its football prowess, Tex-Mex, Austin's music scene, but beyond that?.... And then everyday in the news those few thoughtful Texans see yet another story about the Christian Taliban trying to turn their state into Jesus Land.

Besides all that, this story just underscores the inanity of elected boards of education. Why do we elect people from one party or another to make education policy for our kids? What's liberal or conservative about the 3 Rs? It's the politicization of children's learning. It's madness.

So here we see yet another unapologetically stupid Maud Flanders/Michelle Bachmann-type in Texas lamenting to the media that there are only "six true conservative Christians on the board." (And alas no true blondes.)

But why should one's religion matter? Well, now that she went and mentioned it like it did, it does matter: nobody's religion should play any part in deciding education policy, so she just disqualified herself! Unfortunately, most Texans don't see it that way; they think one qualifies oneself for public office by juggling Bibles while speaking in tongues at a gun show.

Texas and the rest of America's states need a big dose of Big Government in education, just like our competitors prescribe to their people. Washington, DC should shove a standard national education policy down their unwilling throats.

I'm sorry for putting it that way, but shoving ignorance down unwilling people's throats is exactly what these parochial bumpkins want to do. They are silly and should be replaced with disinterested career bureaucrats in Washington.

Texas Schools To Revisit Evolution Debate Under New Leadership

By Jim Vertuno

July 20, 2011 | Huffington Post

URL: http://www.huffingtonpost.com/2011/07/20/texas-evolution-education-schools_n_905020.html

U.S. lokul ejukashun meetz reseshun

Listen up, all you conservative cavemen (and cavegals) who want to go back to the Laura Ingalls Wilder days of the Little Red Schoolhouse (minus that little b**tch Nellie, I presume): Your beloved model of locally funded and run primary schools has sunken into a fiscal crisis so deep even Michael Landon's angel can't pull it out. That dern economic cycle that you stake your life on means that kids unfortunate enough to be kids today get a worse education.

Aint the free market grand?

Come on, we're smarter than this. Public education should be centrally controlled and financed. Kids -- the future of our nation's economic productivity, and the guarantors of your beloved Social Security and Medicare, you Boomers -- should not be at the mercy of the business cycle.

Meanwhile, the Marxist, failed, redistributive stimulus bill that has brought affluent white seniors to the point of, well, actually leaving their homes, has been responsible for saving more than 342,000 school jobs, about 5.5 percent of all the positions in the nation's 15,000 school systems. "That's just socialism!" I can hear Glenn Beck sobbing from his mansion. I hope he and Nellie will share a desk in hell.


Districts Warn of Deeper Teacher Cuts
By Tamar Lewin and Sam Dillon
April 20, 2010 | New York Times

URL: http://www.nytimes.com/2010/04/21/education/21teachers.html

Wall St. is the best thing for socialism ever

Like I said before, Wall Street is to blame for burgeoning "socialism" in America, not dastardly lib'ruls. Greedy, gambling bankers caused this mess, and now primarily state governments, aided by the federal gov't (the lender of last resort), have to deal with the aftermath.

Obama and the Democrats didn't have to do a darn thing, this is happening at the state level all by itself: more Americans are collecting unemployment benefits and food stamps than ever before, and both are managed at the state level.

Live-free-or-die Texas has borrowed $1.6 billion so far from the federal government to pay residents' soaring unemployment benefits.

The much-criticized federal stimulus, by the way, went a long way toward plugging gaps in state budgets. The stimulus was much less effective than it should have been because (1) it was too small, (2) 37 percent of it was tax cuts, (which, oddly, we don't hear anything about from our angry teabagging/GOP friends) and (3) the federal fiscal expansion was matched by states' fiscal contraction, since most of them have passed balanced budget amendments -- making the national stimulus, in effect, much smaller. Automatic state tax increases on business to cover growing unemployment benefits is a result of the states' pay-as-you-go mandate.

If you weigh the states' budget cuts and tax hikes against the federal stimulus's spending and tax cuts, the net effect was about $246 billion pumped into the economy. Good, but not nearly enough. Thanks, Republicans!


Unemployment taxes slam businesses
By Tami Luhby
February 9, 2010 | CNNMoney.com

URL: http://money.cnn.com/2010/02/09/news/economy/unemployment_taxes/index.htm?hpt=Sbin

Did federalism cause stimulus to fail?

This may not be the only explanation for why the stimulus has not been as effective as hoped, yet we can't fail to mention that the federal stimulus bill has been counteracted by the states' tax hikes and spending cuts, and this explanation surely jibes with what many economists have argued all along: the stimulus must be big enough or it will fail.

The two-year Obama stimulus amounted to $787 billion, of which $70 billion was really just the usual taxpayers' annual exemption from the alternative minimum tax, and $146 billion was actually appropriated for the years 2011 to 2019. That leaves $571 billion that the federal government is pumping into the economy during 2009 and 2010. Subtract the amount that state and local governments are withdrawing from the economy (they have a combined shortfall of around $365 billion, but let's say they do enough fiscal finagling so that the total of their cutbacks and tax hikes is just $325 billion), and we're left with $246 billion.

At $787 billion, the stimulus came to 2.6 percent of the nation's gross domestic product for 2009 and 2010 -- not big enough, but a respectable figure. At $246 billion -- the net of the federal stimulus minus the state and local anti-stimulus -- it comes to just 0.8 percent of GDP, a level lower than those of many of the nations that the U.S. chastised for failing to stimulate their economies sufficiently.

But other major nations don't have federal systems that turn them into unstopped bathtubs in times of recession.

Fed Up With Federalism
How America's commitment to states' rights is undermining our economic recovery.

By Harold Myerson
December 2, 2009 | The American Prospect

URL: http://prospect.org/cs/articles?article=fed_up_with_federalism