First of all, to see one of the many nasty political facets of the NRA, please check out the column by the NYTimes' longtime Supreme Court analyst Linda Greenhouse; you can find it here:
As you can see from this article, it is a big mistake to believe it when the NRA says it is for the enforcement of gun laws already on the books. In fact, the NRA has opposed virtually every gun control measure ever proposed; when a measure is passed, the NRA has done everything in its power to suppress enforcement of the law. The bureau of Alcohol, Tobacco and Firearms (ATF) has been underfunded for decades because the NRA has put political and economic pressure on representatives in both houses of Congress -- mostly Republicans but many Democrats as well. It has also exerted sufficient pressure to keep ATF from having a permanent director, which limits the department's power to enforce existing laws. Although the general membership elects the leadership of the NRA, it is not a all clear that the general membership is aware or explicitly approves of the behind-the-scenes political activities of its leadership (more on this below).l
The NRA blames the video game industry for promoting gun violence, but in fact only games from makers not under their political control or not involved with political payoffs for the NRA meet with it's disapproval. It seems that games with a military theme, no matter how perverted or unrepresentative of the U.S. military, seem to be OK with the NRA: this is discussed in this article carried by Yahoo News. Although most mayors and police have split with the NRA on gun control issues, the NRA still maintains close ties with the military and, of course, with the Republican party.
Incidentally, violent video games, whether approved or not by the NRA, can be pretty awful and are largely unregulated. You can see a brief survey of the "Top Ten Violent Video Games" here. I suspect that for most grownups these are pretty primitive and simple-minded, but they contain frightening examples of bloody violence and complete dehumanization of putative "enemies". Nevertheless, it is clear from the many examples -- many uncomfortably recent -- of mass murders that the killers were completely unswayed by any pity or guilt during their crimes -- exactly the same as the killers in these games. The fact that most of the sadistic acts in these games are not committed with guns is actually irrelevant: it is the dehumanization of the victims that makes the torture and murder possible. And this includes the "military" themed games, which the NRA seems not to find objectionable. In these, dehumanization takes the form of presenting the victims of violence as Nazis, communists, terrorists, vague "criminals" or even zombies. The point is that they are "other" and "bad", hence one is justified in doing anything we might want to do to them.
Whether such games can actually create mass-murderers is probably
impossible to tell, since how could one possibly test this hypothesis
scientifically? Some hypothesize that it may be possible that the violence in video games might actually be a catharsis for some potential killers, taking the place of actual violence. Of course, a similar hypothesis might also be made about, say, simulated child pornography (animated or with adults imitating children): that viewing and finding release from such videos might actually supplant the need for assaults against actual children. These are interesting topics of discussion, but once again: how could we assess their truth?
Anyway, returning to the issue of guns and the NRA.
It is important that those who favor gun control in some form be realistic about the NRA and its members and its leadership. First of all, the NRA is not composed of just hunters and hobbyists. Many in the NRA don't hunt but own a gun for purposes of self-defense. Among these folks there is a wide variety of visions about self-defense, ranging from store-keepers worried about robberies to individuals worried about street crimes, to people who believe that an oppressive and dictatorial government may "come for them."
Now, of course there are paranoid loonies who fear the U.N. and "black helicopters." What about those who think that guns will protect them from street crime? There certainly are cases where store owners have thwarted robberies and homeowners have chased away intruders. However, from what I've read, most cases in which a gun has been fired by an individual at an individual have been cases of either improper or criminal use of a weapon to intimidate (and not to defend), or cases of mistaken identity that lead to tragedy or near tragedy. David Frum, a longtime Republican consultant, takes this view in an article for CNN: Guns endanger more than they protect.
(I personally am not gun-phobic, but would never keep a firearm in my house unless it were disassembled and locked. Can you imagine having a loaded firearm in your night table and hearing a person rattle your front door in the middle of the night and enter your house? You call: "Who's there?" and there is no answer. Footsteps come up the stairs toward your bedroom; you take the gun and when the bedroom door opens, you fire. Oops, it's your slightly inebriated son paying a surprise visit from college. I, for one, would rather be killed by an intruder than accidentally kill a family member. Somehow I suspect most people share that preference.)
So how should we take the position of the NRA on gun control as expressed by its leadership? Actually, in a survey of 45,000 Americans, only about 22% reported owning a gun, and only a total of about 35% of households reported a gun in the family. Of actual gun owners, only about 1 in 4 actually belonged to the NRA; thus, gun-owning NRA members seem to be only about 5% of the population. These figures come from a statistical essay in the Washington Post. The article goes on to show that the views expressed by Wayne Lapierre (VP and spokesman of the NRA) do not uniformly represent the opinion of NRA members on all issues involving gun control, and certainly not the opinions of all gun owners.
Outside the minority of gun owners and NRA members, Americans at this time support reasonable gun control measures. The two obvious ones are a ban on assault rifles and a ban on large capacity ammunition magazines (those holding more than 10 bullets). Neither of these would be a burden on hunters, hobbyists, and even self-defense advocates: if 10 shots from a semi-automatic weapon won't deal with a random street assault or a home invader, you are pretty much doomed. If you are worried about black helicopters and resurgent communism then, I'm afraid, we owe you nothing except a plan that pays for a good healthcare professional.
Thursday, December 27, 2012
Monday, December 17, 2012
More stupidity from the Dems.
If the Democratic Party were run by the Republicans, here's what they would do.
1. They'd make up some phony charges against U.N. ambassador Susan Rice; scream about them over and over, and let the usual network news hacks blow it up into something that seems to have substance. They'd trot out hawks Lindsey Graham and John McCain and have them babble about how they could never support her for Secretary of State -- though they loved Condi Rice, who really screwed up.
2. They'd suddenly turn faux non-partisan by hinting that they'd love to support incumbent Senator John Kerry for the position of Secretary of State.
3. They'd let their timid President back down and signal to Rice that she should make his life easier by pulling out of contention for the position.
(As if on command, she followed the script and Obama quickly accepted her decision. So much for inviting them to pick a fight with him.)
4. They'd quietly let Scott Brown put his political machine back in gear while the "Democrats" try to find temporary replacement for Kennedy, then engage in a divisive primary campaign to pick a candidate for the Senate candidate to replace Kerry.
Oh, you remember Kerry: the guy why learned that the Viet Nam war was wrong after serving there (because he needed military cred to run for political office some day), then proceeded to forget this lesson and back George Bush's phony war in Iraq -- even though the vast majority of his constituents in Massachusetts opposed it.. Obviously the Republicans still love him for that and the Democrats would never say a thing against him. Oh, he also backed the Patriot Act.
Will Obama appoint the deeply flawed Kerry to be Secretary of State as the Republicans hope he will? We shall see.
It sure is a good thing that the Republicans don't run the Democratic Party...
1. They'd make up some phony charges against U.N. ambassador Susan Rice; scream about them over and over, and let the usual network news hacks blow it up into something that seems to have substance. They'd trot out hawks Lindsey Graham and John McCain and have them babble about how they could never support her for Secretary of State -- though they loved Condi Rice, who really screwed up.
2. They'd suddenly turn faux non-partisan by hinting that they'd love to support incumbent Senator John Kerry for the position of Secretary of State.
3. They'd let their timid President back down and signal to Rice that she should make his life easier by pulling out of contention for the position.
(As if on command, she followed the script and Obama quickly accepted her decision. So much for inviting them to pick a fight with him.)
4. They'd quietly let Scott Brown put his political machine back in gear while the "Democrats" try to find temporary replacement for Kennedy, then engage in a divisive primary campaign to pick a candidate for the Senate candidate to replace Kerry.
Oh, you remember Kerry: the guy why learned that the Viet Nam war was wrong after serving there (because he needed military cred to run for political office some day), then proceeded to forget this lesson and back George Bush's phony war in Iraq -- even though the vast majority of his constituents in Massachusetts opposed it.. Obviously the Republicans still love him for that and the Democrats would never say a thing against him. Oh, he also backed the Patriot Act.
Will Obama appoint the deeply flawed Kerry to be Secretary of State as the Republicans hope he will? We shall see.
It sure is a good thing that the Republicans don't run the Democratic Party...
Thursday, December 6, 2012
Eliot Spitzer on tax reform
Eliot Spitzer has posted two short essays on Slate in which he suggests that we tax capital gains and dividends the same as ordinary income, and also institute a "financial transactions" tax. Here are the links:
Raising Capital Gains Tax
Financial Transactions Tax
Note that these are parts of the tax and spending program that I have been advocating; see my recent blog Solving the Debt Problems.
Note that Eliot Spitzer would make a good chair of the SEC; too bad he has a "past".
Raising Capital Gains Tax
Financial Transactions Tax
Note that these are parts of the tax and spending program that I have been advocating; see my recent blog Solving the Debt Problems.
Note that Eliot Spitzer would make a good chair of the SEC; too bad he has a "past".
Monday, December 3, 2012
Robert Reich's new video
Robert Reich -- one of the good Bobs -- has a new video about how and why the Democrats should hold firm in facing the "financial cliff".
BTW: It would be disgrace if Reich were not appointed to some important position in the Obama Administration.
Friday, November 30, 2012
Solving the debt problems
For the past 40 years or so there has been a de facto class warfare in this country. While workers' productivity has soared, worker compensation has remained essentially flat. Meanwhile, corporate profits have boomed and the gap between the top 2% of income earners and the remaining 98% has widened to the largest its been since the gilded Age of the Robber Barons (late 19th century) or the time just preceding the Great Depression.
(There is really no dispute about this; to see some background and charts, here are some from the Economic Policy Institute. Also check out this discussion of CEO pay increases at the Institute for Policy Studies.)
In spite of this, Republicans and other so-called "conservatives" are suggesting that we somehow must all share equally in reducing the public debt and balancing budgets. What makes this even more outrageous is that they don't even mean equally. What they mean is that the rich should continued to enjoy tax breaks that are unequally in their favor, while Congress must enact spending cuts that hit programs that the wealthy don't need or even like -- e.g. national parks, protective regulation, healthcare and aid to education. Thus, as Weill/Brecht say in Three Penny Opera "The answer to a kick in the pants is just another kick in the pants." Thus, the much-vaunted "Simpson-Bowles" prescription for paying down the debt is yet another kick in the pants for working non-rich Americans.
Yet, we can "fix the deficit" and end class warfare simply by cutting away the nonsense about "job creators" and "balanced approaches" and all the rest of that 2% propaganda that even the Democrats are circulating. Several years ago I suggested an alternative tax and spending program that would have balanced the budget (at that time): You can find it here; it has a link to a NY Times "budget calculator" which, though somewhat outdated, is fun to play with; click here (you can use it to check some of the figures for the suggestions I make below).
Here then is my updated program for tax fairness and spending reform.
1. Tax all income equally. In other words, eliminate a special Capital Gains Tax and tax all income including dividends at the same graduated rates. This will prevent Mitt Romney and Warren Buffet from paying at a lower rate than their secretaries.
2. Put a sales tax on sales and purchases of stocks and bonds. Speculators should pay a tax on their sales and purchases the same as most of us do on school books, garbage cans and refrigerators. I discussed this in a previous blog. This tax would be small (¼% on each sale and each purchase) and would not be burdensome to people who are actually investing as opposed to speculating. It could generate as much as $100 billion a year.
3. Cap total deductions for income tax purposes to something around $50,000. This was, in fact, an idea proposed by Mitt Romney near the end of this year's campaign. I doubt that either he or any Republicans would actually support its implementation since it would do a lot to level the tax playing field.
4. Return the Estate Tax to 1998-2000 levels (around 50% on estates above $3 million -- we could raise that to $5 million even).
5. Sell carbon licenses to industry and allow trading of these licenses. This was also at one time a Republican plan, before the party became opposed to everything except showering money on its wealthy patrons.
6. End the state of perpetual war and cut the military budget to pre-Cold War levels (as percentage of GNP). Bring all troops home from Afghanistan and Iraq. Drastically cut troop levels in Europe, Japan and Korea.
7. End the expensive and ineffective War on Marijuana and redirect most of the rest of the ineffective "War on Drugs" toward treatment of addiction. This would save not just on police time but also help to lower the lavish spending on prisons.
8. Cut agricultural subsidies to big agribusiness (especially ethanol subsidies to "Big Corn").
9. Cut oil subsidies to companies like Exxon-Mobil.
10. Save Social Security for a century by eliminating the limit on income subject to the FICA tax. Doing this would make raising the retirement age or adjusting the COLAs unnecessary.
Note that I didn't mention ending the "Bush Tax Cuts." I am assuming that they will disappear on schedule January 1. Reinstituting them for people earning less than a quarter million dollars a year will probably be one of the few things that will happen in a somewhat bipartisan way: the Republicans can't afford not to.
This leaves the last and biggest elephant in the tent: Medicare, Medicaid, and healthcare in general. People far more knowledgeable than I have made many suggestions that might be effective. We know that the problem can be addressed effectively because every other advanced industrialized country (and many others besides) have systems that provide better healthcare results than ours and at half the cost. We should have had "Medicare for All" (the "public option") but that didn't happen because of the power of the insurance industry. Nevertheless, we can start with substituting "outcome-based" compensation for the current "fee for services" contracts. Instead of doctors and hospitals being paid for the number of treatments and tests they provide, they would be paid for keeping certain numbers of people healthy over certain periods of time. This is part of Obamacare, but needs to be the standard "operating procedure" for all of national healthcare.
The steps I have suggested above would raise far more money in a far fairer way than anything proposed by either political party. Furthermore, they would help reduce the burden unfairly placed on the working people of this country by 4 decades of class warfare against them.
(There is really no dispute about this; to see some background and charts, here are some from the Economic Policy Institute. Also check out this discussion of CEO pay increases at the Institute for Policy Studies.)
In spite of this, Republicans and other so-called "conservatives" are suggesting that we somehow must all share equally in reducing the public debt and balancing budgets. What makes this even more outrageous is that they don't even mean equally. What they mean is that the rich should continued to enjoy tax breaks that are unequally in their favor, while Congress must enact spending cuts that hit programs that the wealthy don't need or even like -- e.g. national parks, protective regulation, healthcare and aid to education. Thus, as Weill/Brecht say in Three Penny Opera "The answer to a kick in the pants is just another kick in the pants." Thus, the much-vaunted "Simpson-Bowles" prescription for paying down the debt is yet another kick in the pants for working non-rich Americans.
Yet, we can "fix the deficit" and end class warfare simply by cutting away the nonsense about "job creators" and "balanced approaches" and all the rest of that 2% propaganda that even the Democrats are circulating. Several years ago I suggested an alternative tax and spending program that would have balanced the budget (at that time): You can find it here; it has a link to a NY Times "budget calculator" which, though somewhat outdated, is fun to play with; click here (you can use it to check some of the figures for the suggestions I make below).
Here then is my updated program for tax fairness and spending reform.
1. Tax all income equally. In other words, eliminate a special Capital Gains Tax and tax all income including dividends at the same graduated rates. This will prevent Mitt Romney and Warren Buffet from paying at a lower rate than their secretaries.
2. Put a sales tax on sales and purchases of stocks and bonds. Speculators should pay a tax on their sales and purchases the same as most of us do on school books, garbage cans and refrigerators. I discussed this in a previous blog. This tax would be small (¼% on each sale and each purchase) and would not be burdensome to people who are actually investing as opposed to speculating. It could generate as much as $100 billion a year.
3. Cap total deductions for income tax purposes to something around $50,000. This was, in fact, an idea proposed by Mitt Romney near the end of this year's campaign. I doubt that either he or any Republicans would actually support its implementation since it would do a lot to level the tax playing field.
4. Return the Estate Tax to 1998-2000 levels (around 50% on estates above $3 million -- we could raise that to $5 million even).
5. Sell carbon licenses to industry and allow trading of these licenses. This was also at one time a Republican plan, before the party became opposed to everything except showering money on its wealthy patrons.
6. End the state of perpetual war and cut the military budget to pre-Cold War levels (as percentage of GNP). Bring all troops home from Afghanistan and Iraq. Drastically cut troop levels in Europe, Japan and Korea.
7. End the expensive and ineffective War on Marijuana and redirect most of the rest of the ineffective "War on Drugs" toward treatment of addiction. This would save not just on police time but also help to lower the lavish spending on prisons.
8. Cut agricultural subsidies to big agribusiness (especially ethanol subsidies to "Big Corn").
9. Cut oil subsidies to companies like Exxon-Mobil.
10. Save Social Security for a century by eliminating the limit on income subject to the FICA tax. Doing this would make raising the retirement age or adjusting the COLAs unnecessary.
Note that I didn't mention ending the "Bush Tax Cuts." I am assuming that they will disappear on schedule January 1. Reinstituting them for people earning less than a quarter million dollars a year will probably be one of the few things that will happen in a somewhat bipartisan way: the Republicans can't afford not to.
This leaves the last and biggest elephant in the tent: Medicare, Medicaid, and healthcare in general. People far more knowledgeable than I have made many suggestions that might be effective. We know that the problem can be addressed effectively because every other advanced industrialized country (and many others besides) have systems that provide better healthcare results than ours and at half the cost. We should have had "Medicare for All" (the "public option") but that didn't happen because of the power of the insurance industry. Nevertheless, we can start with substituting "outcome-based" compensation for the current "fee for services" contracts. Instead of doctors and hospitals being paid for the number of treatments and tests they provide, they would be paid for keeping certain numbers of people healthy over certain periods of time. This is part of Obamacare, but needs to be the standard "operating procedure" for all of national healthcare.
The steps I have suggested above would raise far more money in a far fairer way than anything proposed by either political party. Furthermore, they would help reduce the burden unfairly placed on the working people of this country by 4 decades of class warfare against them.
Thursday, November 29, 2012
The Parasite Tax (Redux)
(If you want to join the "Fantasy Cabinet" discussion, scroll down a bit, or click HERE; then use the "Comments" section below that blog to make your own comments.)
Below I have reproduced a blog I wrote two years ago -- Nov 20, 2010. With all the talk about generating revenue and shifting the tax burden from the middle class to the wealthy, no one talks about the inequity of sales taxes on everyday items that the middle class purchases such as school supplies and diapers, but no similar tax on financial speculation. This is a little publicized but important example of the class warfare already declared on the 98% by the top 2%.
When I learned about economics in high school, we were told how the stock market works and why it is good. Inventors and entrepreneurs who had good ideas about new and useful products could form companies and issue stock. Investors who thought these ideas or products were promising could take a risk and invest in the stock, thus becoming part "owners" of the company. The money they paid would be used by the company to grow and develop its products. If all went well, the company would thrive and the investors would be rewarded for the risk they took. Sounds wonderful. Like so much of capitalist theory.
But that's not quite the way it works, especially these days. There are still people who buy stocks based on the "fundamentals" of the companies: the management, ideas, and products. These are the true investors. However, most of the trading of securities these days is based on speculation. This is not speculation about the fundamentals of the company, but speculation about how the market and other investors will behave. Probably most stocks (and bonds) are not kept for months and years, but are traded monthly, weekly, daily, and even by the minute and second (see the insider newsletter Zero Hedge for some estimates). Sophisticated computer programs can use statistics and mathematical modeling to estimate small-scale fluctuations in segments of the market and relate that to the second-by-second behavior of particular stocks. Lightning fast buying and selling programs can trade thousands of stocks a second based on these analyses. All this computer power is available to trading companies and their best and wealthiest customers. Often a trading company (Goldman Sachs is a notorious example: see this blog) will pit their best customers against their less-favored customers.
There are tens of thousands of individual "day-traders" who do similar things on their own or are the favored customers of the big brokerage houses.
Make no mistake about it:
Now add in derivatives: side bets on the performance of bundles of stocks and bonds; even bets on the financial indices themselves. Sometimes these bundles are only theoretical, as is the case of synthetic CDOs (Collateralized Debt Obligations) which may not actually contain anything more than a list of securities that one bets on. Or consider the trading of Credit Default Swaps, which are like "insurance policies" on securities. The whole setup has absolutely nothing to do with the fundamentals of capitalism, and everything to do with wild speculation and gambling.
It is universally acknowledged now that this gambling culture on Wall Street is responsible for the recent economic collapse and resulting unemployment. Unlike other ruined gamblers, however, the big players here -- investment banks (Citi e.g.) and insurance companies (AIG e.g.) were bailed out because their excesses threatened our entire economic system. Not only are many of the villains in this debacle now taking home huge annual bonuses -- often more than the average family's life savings -- but the Republicans and the woefully ignorant Tea Screamers think that we need fewer regulations of Wall Street.
(Gambling behavior by banks was forbidden after the Great Depression by the Glass-Steagall Act. This worked to prevent a major market crash for more than 60 years. It was repealed by a Republican Congress helped by then President Bill Clinton. For more, see my blog about it.)
The time has come to make Wall Street start paying. One effective way to do this is to enact recently proposed legislation to tax stock and bond sales. This has just been done in Europe and, in fact, there was such a tax in the U.S. from 1914 to 1966.
Yes, Virginia, it's true that we all pay sales taxes on purchases, except the gunslingers on Wall Street.
They can trade a hundred million shares in a day and not pay a dime in sales tax, while you and I fork over 5% or 6% or even more on back-to-school supplies and lawnmowers.
The idea of a Speculation Tax is simple and fair and necessary. Each time a stock is traded, the buyer and seller each pay a small tax -- about 1/4% in some plans. This is a tiny amount: $25 on $10,000 worth of stock, or about what you'd pay in sales tax on a $500 stove. It is absolutely no burden whatever on a long-term investor or conservative pension fund, or hospital or university. It does amount to a burden -- and rightfully so -- on people who make massive and frequent computer trades to take advantage of tiny point fluctuations in securities. It could also be called a Parasite Tax. Conservative estimates say it would bring in at least $100 billion a year in tax revenue (e.g. see Robert Kuttner's article). This revenue could be used constructively to undo some of the bad things that Wall Street has done to us.
Here is a fairly extensive article on the Parasite Tax (a.k.a. the Financial Transactions Tax or Tobin Tax) from SourceWatch and some other articles from the AFL-CIO and The Hill. Google it yourself to find out more.
Another important thing we can do is to make stock and bond traders' profits subject to regular income tax, not just the capital gains tax. But that will be the subject of another blog.
The important thing is: Make Wall Street Pay.
Write your rep about it.
Below I have reproduced a blog I wrote two years ago -- Nov 20, 2010. With all the talk about generating revenue and shifting the tax burden from the middle class to the wealthy, no one talks about the inequity of sales taxes on everyday items that the middle class purchases such as school supplies and diapers, but no similar tax on financial speculation. This is a little publicized but important example of the class warfare already declared on the 98% by the top 2%.
When I learned about economics in high school, we were told how the stock market works and why it is good. Inventors and entrepreneurs who had good ideas about new and useful products could form companies and issue stock. Investors who thought these ideas or products were promising could take a risk and invest in the stock, thus becoming part "owners" of the company. The money they paid would be used by the company to grow and develop its products. If all went well, the company would thrive and the investors would be rewarded for the risk they took. Sounds wonderful. Like so much of capitalist theory.
But that's not quite the way it works, especially these days. There are still people who buy stocks based on the "fundamentals" of the companies: the management, ideas, and products. These are the true investors. However, most of the trading of securities these days is based on speculation. This is not speculation about the fundamentals of the company, but speculation about how the market and other investors will behave. Probably most stocks (and bonds) are not kept for months and years, but are traded monthly, weekly, daily, and even by the minute and second (see the insider newsletter Zero Hedge for some estimates). Sophisticated computer programs can use statistics and mathematical modeling to estimate small-scale fluctuations in segments of the market and relate that to the second-by-second behavior of particular stocks. Lightning fast buying and selling programs can trade thousands of stocks a second based on these analyses. All this computer power is available to trading companies and their best and wealthiest customers. Often a trading company (Goldman Sachs is a notorious example: see this blog) will pit their best customers against their less-favored customers.
There are tens of thousands of individual "day-traders" who do similar things on their own or are the favored customers of the big brokerage houses.
Make no mistake about it:
These People And Brokers Are Social Parasites.
They
serve no useful purpose and do what they do solely out of greed. They
are responsible for a lot of the volatility of the market. The tiniest
bit of news or financial gossip can set off flurries or cascades of
day-trading and computer sales that account for big fluctuations in the
daily indices. No wealth or products or innovation or anything of social
value is produced. The stock market is already very liquid (i.e. it's
easy to pair buyers and sellers), so what these parasites do is create
"churning" or "hyperliquidity": meaningless buying and selling that
enriches only speculators. Responsible investors such as pension funds,
hospitals and schools end up, more often than not, as victims of these
irrational market swings.Now add in derivatives: side bets on the performance of bundles of stocks and bonds; even bets on the financial indices themselves. Sometimes these bundles are only theoretical, as is the case of synthetic CDOs (Collateralized Debt Obligations) which may not actually contain anything more than a list of securities that one bets on. Or consider the trading of Credit Default Swaps, which are like "insurance policies" on securities. The whole setup has absolutely nothing to do with the fundamentals of capitalism, and everything to do with wild speculation and gambling.
It is universally acknowledged now that this gambling culture on Wall Street is responsible for the recent economic collapse and resulting unemployment. Unlike other ruined gamblers, however, the big players here -- investment banks (Citi e.g.) and insurance companies (AIG e.g.) were bailed out because their excesses threatened our entire economic system. Not only are many of the villains in this debacle now taking home huge annual bonuses -- often more than the average family's life savings -- but the Republicans and the woefully ignorant Tea Screamers think that we need fewer regulations of Wall Street.
(Gambling behavior by banks was forbidden after the Great Depression by the Glass-Steagall Act. This worked to prevent a major market crash for more than 60 years. It was repealed by a Republican Congress helped by then President Bill Clinton. For more, see my blog about it.)
The time has come to make Wall Street start paying. One effective way to do this is to enact recently proposed legislation to tax stock and bond sales. This has just been done in Europe and, in fact, there was such a tax in the U.S. from 1914 to 1966.
Yes, Virginia, it's true that we all pay sales taxes on purchases, except the gunslingers on Wall Street.
They can trade a hundred million shares in a day and not pay a dime in sales tax, while you and I fork over 5% or 6% or even more on back-to-school supplies and lawnmowers.
The idea of a Speculation Tax is simple and fair and necessary. Each time a stock is traded, the buyer and seller each pay a small tax -- about 1/4% in some plans. This is a tiny amount: $25 on $10,000 worth of stock, or about what you'd pay in sales tax on a $500 stove. It is absolutely no burden whatever on a long-term investor or conservative pension fund, or hospital or university. It does amount to a burden -- and rightfully so -- on people who make massive and frequent computer trades to take advantage of tiny point fluctuations in securities. It could also be called a Parasite Tax. Conservative estimates say it would bring in at least $100 billion a year in tax revenue (e.g. see Robert Kuttner's article). This revenue could be used constructively to undo some of the bad things that Wall Street has done to us.
Here is a fairly extensive article on the Parasite Tax (a.k.a. the Financial Transactions Tax or Tobin Tax) from SourceWatch and some other articles from the AFL-CIO and The Hill. Google it yourself to find out more.
Another important thing we can do is to make stock and bond traders' profits subject to regular income tax, not just the capital gains tax. But that will be the subject of another blog.
The important thing is: Make Wall Street Pay.
Write your rep about it.
Tuesday, November 27, 2012
Fantasy Cabinet Game
In today NYTimes, columnist Joe Nocera discusses his choices for Obama's new cabinet. Below is a summary of his choices for some of these posts:
TREASURY: Tim Geitner → Sheila Bair
STATE: Hillary Clinton → Bill Clinton
ATTY.GEN: Eric Holder → Ken Feinberg
DEFENSE: Leon Panetta → David Petraeus
ENERGY: Steven Chu → Fred Krupp
EDUCATION: Arne Duncan → Randi Weingarten (AFT)
S.E.C.: Mary Schapiro/Elisse B. Walter → Sean Berkowitz
For the record, here are the remaining ones: AGRI, COMMERCE, HLTH&HUM. SERV., HOMELAND SEC., H.U.D., INTERIOR, LABOR, TRANSP., VETERANS SERV.
I am in favor of Sheila Bair for Treasury. She is a Republican who is a firm believer in controls over Wall St and who just finished a 5-year term as chair of the F.D.I.C. to which she was appointed by George Bush. Since Elizabeth Warren is currently occupied as Senator from Massachusetts, Bair is my first choice.
Bill Clinton as Secretary of State is not a great idea. It is unclear how interested he would be in the day-to-day functioning of the office, or how closely he could work with Obama. I think he might be better as special envoy to the Middle East. At the moment Susan Rice seems to be Obama's choice for State, and I don't see anything objectionable in her filling the role; also, Republican opposition to her seems to be moderating.
I am not that happy with Eric Holder who seems to embrace the disastrous "War on Drugs" (but then, so does the President). He also didn't go out of his way to prosecute central figures in the 2008 economic collapse. Ken Feinberg is really a cipher on issues other than disbursing money to victims of 9-11 and the BP oil spill. I have no special knowledge of other deserving nominees.
David Petraeus for Defense seems quixotic. (If we were going to install well-known philanderers in the cabinet, I would have proposed Eliot Spitzer for Attorney General -- but see below.) In any case, it is my understanding that someone who served so recently in the military is ineligible to be Secretary of Defense. Also, Panetta seems to have done a decent job so far.
I for one think that Steven Chu has done a fine job in Energy, so unless he wants out I think he should continue. It never hurts to have someone who actually knows some science in this position. Fred Krupp, as head of the Environmental Defense Fund has some enviro-cred, but he is also a big proponent of fracking, a technology whose dangers have not been investigated nearly enough.
For Education I think that the president of the American Federation of Teachers is too provocative, even if she is a very good person (which she seems to be): I doubt that she could be confirmed. Fortunately, Obama could put forward Diane Ravitch who has been a very pointed and knowledgeable critic of just about everyone and everything in the field. For a long time she was just about the only really thoughtful voice on the right in matters educational. Recently she has changed her mind about many things and has become a very progressive voice. I have read a lot of her essays and found them quite impressive.
For S.E.C. I think that Eliot Spitzer would probably be the best choice if he can overcome the fallout of his sex scandal. Sean Berkowitz, though, is not a bad choice: he was one of the major prosecutors in the Enron case, who helped to nail Jeff Skilling and Ken Lay. He could arguably be better as AG than Ken Feinberg.
Anyway, I'd like to invite readers of this blog to make a case for their favorites for any of these cabinet positions (and SEC). Please use the "Comments" section directly below. I'll collect those that seem most convincing and devote at least one blog to them.
As we "go to press": Sarah B. reminds us not to forget former senator Russ Feingold (AG?) and former Sec. of Labor Robert Reich (Council of Economic Advisors?). SB has named this the "The Fantasy Cabinet Game".
Which reminds me of the other "good" Bob: Bob Kuttner (and not the "bad" Bob: Rubin). He should also be on the Council of Economic Advisers.
TREASURY: Tim Geitner → Sheila Bair
STATE: Hillary Clinton → Bill Clinton
ATTY.GEN: Eric Holder → Ken Feinberg
DEFENSE: Leon Panetta → David Petraeus
ENERGY: Steven Chu → Fred Krupp
EDUCATION: Arne Duncan → Randi Weingarten (AFT)
S.E.C.: Mary Schapiro/Elisse B. Walter → Sean Berkowitz
For the record, here are the remaining ones: AGRI, COMMERCE, HLTH&HUM. SERV., HOMELAND SEC., H.U.D., INTERIOR, LABOR, TRANSP., VETERANS SERV.
I am in favor of Sheila Bair for Treasury. She is a Republican who is a firm believer in controls over Wall St and who just finished a 5-year term as chair of the F.D.I.C. to which she was appointed by George Bush. Since Elizabeth Warren is currently occupied as Senator from Massachusetts, Bair is my first choice.
Bill Clinton as Secretary of State is not a great idea. It is unclear how interested he would be in the day-to-day functioning of the office, or how closely he could work with Obama. I think he might be better as special envoy to the Middle East. At the moment Susan Rice seems to be Obama's choice for State, and I don't see anything objectionable in her filling the role; also, Republican opposition to her seems to be moderating.
I am not that happy with Eric Holder who seems to embrace the disastrous "War on Drugs" (but then, so does the President). He also didn't go out of his way to prosecute central figures in the 2008 economic collapse. Ken Feinberg is really a cipher on issues other than disbursing money to victims of 9-11 and the BP oil spill. I have no special knowledge of other deserving nominees.
David Petraeus for Defense seems quixotic. (If we were going to install well-known philanderers in the cabinet, I would have proposed Eliot Spitzer for Attorney General -- but see below.) In any case, it is my understanding that someone who served so recently in the military is ineligible to be Secretary of Defense. Also, Panetta seems to have done a decent job so far.
I for one think that Steven Chu has done a fine job in Energy, so unless he wants out I think he should continue. It never hurts to have someone who actually knows some science in this position. Fred Krupp, as head of the Environmental Defense Fund has some enviro-cred, but he is also a big proponent of fracking, a technology whose dangers have not been investigated nearly enough.
For Education I think that the president of the American Federation of Teachers is too provocative, even if she is a very good person (which she seems to be): I doubt that she could be confirmed. Fortunately, Obama could put forward Diane Ravitch who has been a very pointed and knowledgeable critic of just about everyone and everything in the field. For a long time she was just about the only really thoughtful voice on the right in matters educational. Recently she has changed her mind about many things and has become a very progressive voice. I have read a lot of her essays and found them quite impressive.
For S.E.C. I think that Eliot Spitzer would probably be the best choice if he can overcome the fallout of his sex scandal. Sean Berkowitz, though, is not a bad choice: he was one of the major prosecutors in the Enron case, who helped to nail Jeff Skilling and Ken Lay. He could arguably be better as AG than Ken Feinberg.
Anyway, I'd like to invite readers of this blog to make a case for their favorites for any of these cabinet positions (and SEC). Please use the "Comments" section directly below. I'll collect those that seem most convincing and devote at least one blog to them.
As we "go to press": Sarah B. reminds us not to forget former senator Russ Feingold (AG?) and former Sec. of Labor Robert Reich (Council of Economic Advisors?). SB has named this the "The Fantasy Cabinet Game".
Which reminds me of the other "good" Bob: Bob Kuttner (and not the "bad" Bob: Rubin). He should also be on the Council of Economic Advisers.
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