Obamaville: Be Afraid

According to the Santorum camp, re-electing Obama to a second term will lead us into some kind of post-apocalyptic world that would make the Walking Dead blush. Be afraid, America. Be very afraid:

Whoa. The sound you just heard was me taking a deuce in my pants.

Kidding aside…what the hell was this? The ridiculousness of this clearly exaggerated apocalyptic theme notwithstanding, I can’t help but think Rick “I said BLAH people” Santorum was somehow trying to relay a message specifically to white America about how the policies of the Obama Administration will negatively affect them, and them alone. In fact, the only people of color you see in this commercial are Obama, a subtly superimposed Ahmadinejad, and a group of flag-burning Middle Eastern protestors. Yes, my white brothers and sisters: Obama hates you and he wants you all to suffer and die.

I suppose a lot of this plays in to the Republican strategy: we have no shot at winning the black vote, so forget them. In return, a large contingency of black people will shy away from Republicans. In return, Republicans will ignore black people. In return, black people will shy away from Republicans. In return, Republicans will ignore…wait, have I said all this already?

Rick Santorum is on his last leg and will probably be out of the race by the end of next month. So this is much ado about nothing. But as a cautionary tale to whom I’d suspect will be the Republican nominee, Mitt Romney, avoid this strategy. In fact, be afraid of this strategy…almost as afraid as white people were supposed to be of Santorum’s attack ad. While it is true that black Americans generally vote Democrat and an overwhelming number of black Americas will indeed vote for Obama, Romney must do his best to widen the tent if he wants any shot at winning the White House. Bush and his team did a marvelous job of securing a staggering amount of black votes in 2004, and President Obama is beatable due to his vulnerabilities. But if Mitt follows Santorum’s drumbeat and plays the game of exclusionary politics, the clip above might wind up being less of a snapshot of Obamaville in 2014, and more like RomneyCampaignville.

- ACL

Herman Cain’s Fishy Ad

If you haven’t quite gotten enough from Herman Cain, I’m happy to inform you that he’s back in the game again. Herman “Directa yo feetsa to Daddy Cain’s Pizza” Cain has released yet another surreal video, this time featuring a creepy little white girl apparently killing a goldfish. The message (at least one can speculate) supposedly suggests how the economy can’t survive solely based on stimulus spending from the government, using the dying fish as some kind of metaphor. I’m not making this up:

…cue the collective sigh of relief from comedians across the country. They now have job security.

Then again, between the weird smoking ad, and cowboys carrying yellow flowers, maybe the comedians should hold off on this one. After all, mental retardation is no laughing matter.

- ACL

More to the Bailouts

So the intrepid host of this blog has been in a little bit of a funk lately, writer’s block if you will. But what a story to share as a way to get back into the blogging scene. Most of you may have already read about this but given the number of riots that haven’t ensued yet, my guess is: you may not.

Last week, I read a shocking report by Bloomberg News  detailing how the Federal Reserve ran up a massive deficit that gave $1.2 trillion in low-cost loans to the largest banks in America and Europe, as the 2008 financial collapse peaked. Yes, my friends. That’s $1.2 trillion with a T! $1.2 trillion loaned out at below-market rates. To put that figure in some perspective, that sum roughly makes up our entire federal debt and is equivalent to approximately one-third of all the assets owned by the Federal Reserve. One-third. That’s not a typo.

The largest aspect of the bailout, the Troubled Asset Relief Program (TARP), dedicated close to half a trillion dollars to support large financial and auto companies. That included billions given to AIG (the crooks financial company responsible for selling mortgage-backed securities) and Fannie Mae and Freddie Mac (the government-backed companies which sold, bought, and insured mortgages). In a report published last year, the Obama administration predicted that the government will lose $17 billion on its TARP investments in car companies, plus another $46 billion on housing programs including the Home Affordable Modification Program. Those losses may be balanced by profits the Treasury made from its loans to financial institutions.

In the case of its secret lending program, the Fed expects to recoup all the money it lent out. Also according to Bloomberg, the Feds have indicated that there were no credit losses on any of its bailout loans and that, in some instances, billions of dollars of profit were generated from interest and fees from the loans. The jury is still out on that, and we will have to see how much recovery the federal government receives from its lending.

Regardless of how much will eventually be repaid, one thing is certain: the amount of money the federal government loaned out (or outright gave away) during the 2008 financial meltdown is mind-blowing and maddening. Before being perverted by corporate interests, this is why the Tea Party was first founded and why the Occupy Wall Street movement is finally getting its legs. The fact that so much taxpayer money was doled out unconditionally and with no accountability is one of, if not the most, outrageous example of robbery we have ever experienced. I’m trying to form a coherent thought, but my efforts are muddled by the shocking nature of this news.

So much for making my triumphant return to the blogosphere. :-/

- ACL

Putting an end to the “green jobs” lie

From guest columnist, The Hippie Conservative:

The year is 1993. The Soviet Empire has collapsed and the former country of Yugoslavia is now on the verge of war as the “Croatian Spring” has devolved into a state of starvation and chaos. The leaves have been stripped from every tree for food, the wood burned for heat and no animals can be found anywhere. A country which once hosted the 1984 Olympics in Sarajevo, the crown jewel of the Soviet Empire, is now reduced to an environmental disaster.

Conclusion: Without a sound economy, ecology and environmentalism has no meaning.

The Obama administration is under the belief that a sound economy and a sound ecology are not mutually exclusive. On that, I agree. Regulations to preserve our resources are necessary to keep the corporate machines from exploiting every corner of this county for profit. Without protection, federal and state lands would be sold off to lower taxes and fix budgets. States would compete for jobs by lowering pollution standards. Clean-ups would be ironically socialized. With a sound and rational regulating system, coupled with economic freedom and healthy profit margins, it’s entirely possible to use the tax money created by a healthy economy to preserve and protect our environment.

The problem is; the Obama Administration is under the mistaken belief that a sound economy can be created by using green energy as its jobs creator.

Here in Michigan, we had a Governor who also believed that green energy, coupled with subsidizing infrastructure projects could create jobs. So many jobs, she promised, that we would be “blown away” by the results. She pumped 100’s of millions of taxpayer dollars into her ideas. She increased road construction to the tune of an extra $100 million a year. She supported and subsidized high tech battery plants, the construction of solar panel manufacturers and the use of windmills. In the end, Michigan, while leading the nation in programs supporting green energy, also led the nation in unemployment 4 of her 8 years. 20,000 “green jobs” were created in a period where 1 million jobs were lost.

Progressives have a mantra when it comes to their failures and Michigan Governor Jennifer Granholm stuck to it like glue, “It would have worked if it were done broader, if we threw more money at it, or if it had no opposition.” She also blamed everyone under the sun but herself and her ideas. She blamed the automobile industry for leaving her state faster than other states while refusing to believe that her policies caused it. She even blamed the past administration for the better part of 6 years. Is this what the Obama administration is going to try to sell us? Blame instead of progress?

The truth is; it didn’t work because the technology is not ready, pure and simple.

To demonstrate; General Motors (owned in part, by the U.S. government) recently announced construction of a new, all solar powered manufacturing plant. The solar array cost $7.5 million and will create 310 jobs. It was heralded as the future here in Michigan, but that comes to $24,200.00 per job. If all 4.7 million jobs in Michigan were subsidized this way, it would cost Michigan $113.74 trillion to have a labor force. A bargain I’ll admit, compared to some of the other Obama administration ventures. I myself looked into a windmill for my cabin up north. The windmill I was interested in cost approx. $5000.00 and would supply 1500 watts at peak production. The U.S. government would then subsidize, through tax breaks, $1,500 of that cost. The problem is; it takes 4000 watts to run a house with all the electronics we have today. Add to that the fact that not every day produces peak production and my estimates were that it would take 20+ years to make a sound return on my investment even with the Government subsides. That doesn’t even include replacing the bearings every 3 to 5 years and the fact that the windmill power unit was only expected to last 10 years.

I decided to pass.

Despite the obvious failings of the green energy industry, the Obama administration has pumped billions into this idea. The most recent example is the solar panel company, Solyndra. This green company, once heralded as a prime example for the green jobs market by President Obama himself, has now collapsed after $535,000,00.00 of Federal investment. In the end, Solyndra created 1000 jobs at $535,000.00 per job! Imagine what all those people could have done with over a half million dollars each. I could retire, reinvest in another house and perhaps even start a business that would create real jobs. Even if this technology were to advance to a more logical level, what’s stopping China or anyone else from producing it for cheaper??

Add to that the failed green companies Evergreen, Schott, a branch of General Electric and too many others to list. All of these companies got huge subsidizes under the American Recovery and Reinvestment Act and the average cost per job was just short of a half million dollars each. At the same time, proven industry breakthroughs like gas and oil fracking were ignored and obstructed.

Before you reach the wrong conclusion, let me just say that I’m a huge supporter of green energy and energy independence. I just don’t believe that it’s ready for prime time and I don’t believe that it will produce the number of jobs needed to stimulate our economy that’s being claimed. I’m also not a big supporter of subsidizing industry. Research, done by the traditional methods including universities, is the way to go. If the product is ready, the market will take care of it without the government picking winners and losers based on campaign contributions. The trick is to make sure that the new boat (to use a metaphor) is finished and floating before we leave the one we’re on. The Obama administration is down-right hostile to any fossil fuels even to the point of promoting pure electric vehicles over hybrids that have a better chance of success. If we’re to reach the point of energy independence and less pollution, we need to explore all possibilities and that includes using fossil fuels. Global Climate Change is a serious issue and should not be ignored, but until the climatologists can accurately predict next year, my faith in their long term predictions is lacking. In the short term, we need to fix our economy so that we can have the luxury of caring about our environment.

- H.C.

The Hippie Conservative blogs at http://thehippieconservative.blogspot.com/

Changeless Times

I present Dylan Ratigan, a guy I pray will consider running for office:

Whoa.

This is the kind of vigor we’ve needed from President Obama, but haven’t gotten much of. It’s one thing to “be angry” while spouting off talking points generated by the media outlet of your preference. But it’s another thing to offer a relatively balanced assessment of the situation currently presiding in Washington. Democrats “kicking the can down the road” and Republicans “burning the place down” pretty aptly illustrates the nonsensical and grossly ideological tug-of-war regarding all the recent debt discussions; along with just about every issue Obama has been forced to address since taking office.

Ratigan’s rant takes an important turn when he openly attacks politicians (generally and with no implied partisanry) for being “bought” by corporate interests and how Obama should earnestly inform the American people about it. Politicos tend to cite corporate influences on Congress, so this is nothing we haven’t heard before. But what I saw differently about Ratigan’s rant is his suggestion that Obama should bluntly come clean with the country about said influences and let them know – from his own mouth – that as long as Congress is being “bought”, we can expect no real or practice solutions. Well played, Mr. Ratigan.

Now, you and I know Americans don’t handle inconvenient truths very well. But at this late and pivotal moment in time, can we afford not to say what really needs to be heard? In a simple manner of speaking, our Congress (and yes, our President, I believe) have made reckless decisions that benefit the few at the expense of the vast majority of us. Not only has Congress capitulated to the oligarchy without even taking a moment to blink, so too has the President. But if wants to redeem himself (and possibly make a solid run at reelection), Obama has a prime opportunity to take the actions necessary to work the problem. It’s time for him to take up a cross and commit himself to leadership and decision making as closely aligned as possible to our interests and not to the most wealthy. It’s not likely that Obama will, and I’ve consequently lost the vast majority of the faith I once had in him as a leader.

Since Ratigan took to the airwaves with his rant, the clip above has hit the Internet like a tidalwave. But when the buzz about this dies down – and it most assuredly will pretty soon – what would have truly come out it? Not much, I suspect. Ratigan might become a new talking head superstar. But I have no faith in a restored Congress, even when it is called out as vicciously as Ratigan did here.

Just a little random declaration of political nihilism on my part. Back to your daily lives, you go.

- ACL

“Stop Coddling the Super-Rich”

An amazing op-ed by billionaire, Warren Buffet. So amazing, in fact, that I’m posting the whole thing:

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

I’ve always maintained that Mr. Buffet was a man among men. This is my confirmation.

- ACL

What’s A President To Do?

Lately, President Obama can’t seem to catch a break. Of course, in addition to Republican opposition hellbent on destroying his administration, the Oba-man hasn’t exactly furthered his own causes by betraying the interests of his party during the debt ceiling discussions and then tout it as an act of bi-partisanship somehow worthy of celebration. I know.

The initial phase of their compromise – making close to $1 trillion in spending cuts without closing corporate loopholes or raising taxes on the weathy - has been viewed by many on the left as a direct reflection on Obama’s inability to push the heavily supported idea of a “shared sacrifice.” However, the president still has a considerably good chance to make moves on that idea if and when Congress puts tax and entitlement reform back on the table. But it’s not very likely that he’ll do anything at that point either.

So with the debt ceiling ‘compromise’ viewed as an epic failure from the base, the subsequent downgrade in our S & P rating, and a looming economy hanging over the President’s head, how in the world can he make a legitimate run in 2012?

From my perspective, he has two viable options to keep him in the White House another four years:

He can negatively campaign directly against the GOP candidate (whomever that will be at this point) and tie his/her candidacy directly to the unpopular establishment. But given his own unpopularity at this point, using that approach could either give him just enough steam to push him over the finish line or stop him in his tracks.

Or oppositely (and perhaps slightly more positively), he could campaign on long-term vision, focusing his efforts on job creation, education reform, infrastructure, technology, and – to an extent – terrorism (ride the Bin Laden wave for as long as you can, Mr. Prez). But in doing so, he may be required to have candid and uncomfortable discussions on how some of these long-term ideas can’t take effect until after unemployment gets back under control AND how middle-class causualities may pile up along the way. These kinds of long-term plans to directly tear down our deficit can’t reasonably succeed without higher taxes for everybody – not just the wealthy - AND the government taking prudent steps to retard the growth of Medicare, Medicaid, Social Security, and the defense budget.

My guess: Obama won’t go either route. All throughtout the 2008 Democratic primaries, he showed an unwillingness or outright inablity to take hard swings at his oppoonents when the opportunity presented itself. So we can rule that out. On the other side of this coin, I definitely don’t think he is willing to have the difficult conversation about how our country’s economic revival has to be spurred by a combination of tough spending cuts and imposing tax hikes. I predict both he and his opponent will sound like they are long-term visionaries. But neither one of them will be campaigning sincerely. Neither one of them will be willing to make the tough - but very necessary – choices to get this country back on track. Instead, count on another election cycle full of games and parlor tricks as both sides vie for the White House with ideologies not at all commensurate with the very real challenges we are facing.

I think this is why I might just be done with Obama. I’m certainly not voting for the other person. So, is it too late to vote for Hillary?

- ACL