Shocked and Persuaded

So President Obama released his much anticipated budget today and I took a couple of minutes to analyze the numbers to find the winners and losers. The results will surprise those on the right and left alike (See Figure Below).

The big winners are:

1. the Natural Resource Conservation Service with respective 2011-2012 and 2010-2012 budget increases of 123% and 167%.

2. the Department of Energy with a 2010-2012 increase of 134%.

3. the Department of Transportation with 2011-2012 and 2010-2012 increases of 113% and 115%

4. a recipient near and dear to natural/environmental scientists hearts the National Science Foundation (NSF) with a 2010-2012 of 118%.

True many of these recipients could be considered liberal or dare I say the word “scientific” causes, but the fact is that there are many progressive recipients on The Big Losers list below.

The Big Losers:

1. Well we have to start with the undisputed biggest loser of them all and one you would think would be in the previous category given how often Obama, Democrats, and Republicans talk about the importance of small-business creation. The Small Business Administration is going to be 20% of what it was in 2010 in the following 2 years if Obama gets his way. This will be an interesting pivot point around which we will see whether conservatives who say Obama is anti-business fight him OR whether the small businesses of America call Obama’s bluff and the Republicans if they jump in bed with him on this one invoking his recent placating speech at Tom Donahue’s Chamber of Commerce. This country is clearly decoupling both at home and in the workplace with Too Big To Fail Military contractors, Banks, and Agribusiness clearly in the driver seat not just with Republicans but with Democrats as well. What a shame.

2. OH and then there is military family housing, which one would assume everyone would want to increase with the patriotic rheotirc booming out of MSNBC and Fox News equally. I thought we valued our warriors and their sacrifice? Guess not because military family housing is set to shrink by 25% 2010-2012.

3. Education and who – like military family housing – could argue with education? Apparently an Obama administration that has found it’s Reaganomics Religion all of a sudden. Education will be slashed by 11% and 24% between 2011-2012 and 2010-2012, respectively.

4. Finally, the Bureau of Ocean Energy Management will be slashed by 31% between 2010-2012.

SO WHAT IS THE POINT OF THIS BLOG? The point is that Obama has shown he is hardly a socialist, fascist, liberal/progressive populist and that with respect to the SBA we will see whether all those jokers on Capitol Hill really do care about small businesses because if the Obama administration gets it’s way the SBA will be hacked to a fifth of it’s size today.

NOW if only we could get the Pentagon to incur more than the 2011-2012 4% decline only to rise like a Phoenix the following year giving it a 2010-2012 6% increase.

If we don’t address the retirement age, tort reform, the military industrial complex leviathan, and things like Bureau of Land Management gifts to the coal/natural gas industry via infinitesimal land rents we are not being serious. Hacking away as the Republicans and Democrats are at discretionary spending, which depending on the year ranges from 10-12% of the federal budget means that honesty is in short supply in DC and that faith is winning out over rationality. What a sham I mean shame!

In the wake of the horrible and senseless actions in Tucson last weekend I was not surprised but definitely fearful of what the response would be among the political elites. Instead of hearing them say we need to get out into our communities more and spend less time wining and dining lobbyists and the political punditocracy in DC or make a pledge to stop bullshitting us about everything from the country’s long-term fiscal and monetary stability to Peak Oil….WE GET people like Robert Brady a Democratic Pennsylvanian congressman proposing Political Exceptionalism laws. Read the rest of this entry »

So I haven’t been posting in a while as I am looking for a job and working on a book. Anyway I have been playing around with what I am calling a “War Games Tax” that I describe below and it is one that if anyone reads this post I would love for you to pass it on to your congressional delegation. After reading it you are welcome to comment and I would be happy to share my data with anyone interested in this idea that I don’t think to many people could argue with. Cheers and I hope you enjoy the read!

I have been working some calculations trying to get at how much general education revenue could be conceivably generated if we taxed what I will broadly call “war games”, which include at this point “Call of Duty: Black Ops (PS3 & X360)”, “Halo: Reach (X360)”, and “God of War III/God of War Collection (PS3). All of these are top sellers for Activision (Call of Duty), Microsoft (Halo), and Sony Computers (God of War). Their average annual revenues are in toto $1.23 billion with “Halo” at $686 million leading the way and “God of War Collection” bringing up the rear at $29 million annually (Fig. 1).

Not a bad profit margin don’t you think? More importantly I was thinking that if there are so many people with the bravado to fight wars via their video consoles they wouldn’t have a problem paying a heavy tax on those games, which could be used to fund educational programs throughout the country. So I went about trying to gather up as much high-quality data as I could get on dollar sales, weekly units, and in order to come up with a progressive “War Games Tax” I used iCasualties data on a per 100,000 person basis across all fifty states+Washington, DC (no US territories due to high concentration of troops stationed there). I then used the per capita data – with Vermont being the highest (2.568) and Utah the lowest (0.486 per 100,000) – summed those values and converted them into percentages. I then multiplied the $1.23 billion figure across tax rates of 35%, 25%, 10%, and 5%, with the per 100,000 percentage conversions used to multiply across tax rate scenarios. If you do that the numbers are pretty staggering.
Lets just focus on Vermont for a second as a teaser for what we could extract from this pseudo-war profiteering that doesn’t get nearly the coverage that the explicit profiteers do. Vermont would be able to rely on an annual tax revenue of (Fig. 2):
1. 22.4 million at 35%, 14.9% of FY 2011 budget deficit
2. 16.0 million at 20%, 10.7% of FY 2011 budget deficit
3. 6.4 million at 10%, 4.3% of FY 2011 budget deficit
Or
4. 3.2 million at 5%, 2.1% of FY 2011 budget deficit

While none of these numbers is eye watering they are not trivial either, with the top rate accounting for nearly 15% of the FY 2011 budget deficit. This is not a progressive or regressive tax idea, rather it is an anti-predatory tax idea with the folks that so flippantly turn on their video consoles to play the latest virtual War On Terror paying the heaviest price. What is wrong with that? New England alone would generate:
1. 55.3 million at 35%, average of 3.5% of FY 2011 budget deficit
2. 39.5 million at 20%
3. 15.8 million at 10%
Or
4. 7.9 million at 5%

So as you can see this is not a panacea but is a step in the right direction AND unlike the much maligned soda-tax proposed by Mayor Bloomberg and Governor Paterson in NY I would argue that there should be less resistance to a tax that takes money from people that like to play video games about war but wouldn’t be caught dead signing up to go to Iraq, Afghanistan, Pakistan, Iran, etc etc and puts that money in to the educational infrastructure of this country. I would like to see someone rail against this idea in public with the lights and cameras on.

This is something I wrote in response to an article by Dr. Jagdish Bhagwati and Arvind Panagariya at Project Syndicate. I love this site and really the thinkers and practitioners run the ideological gradient. Read the rest of this entry »

Newsflash: The Government Accountability Office has decided to reopen the investigation that found Dr. Bruce Ivins solely responsible for the post-911 anthrax scare that killed 5 people.

In reading this note in The Times I found myself thinking back to the origin of the phrase smoking gun and why we as Americans are so consumed with finding single individuals to blame large-scale tragedies, screw-ups, and nefarious activities. Read the rest of this entry »

I have known for quite a while now that the vote I cast for you in November of 2008 – my first ever vote for a member of The Big Two – was one that I would not regret, because I am still a huge admirer of your intellect, but would come to view with a great degree of disappointment and anger. Read the rest of this entry »

At this point we’ve all heard much too much about George Bush’s Axis of Evil [1]. For those of you that have been flying in outer space or tripping on some really good drugs for the last 8+ years since W. coined this phrase during his State of the Union Address on January 29th, 2002 it simply refers to the boogey men that ran Iraq, Iran, and North Korea at the time. Read the rest of this entry »

You would think that any group with a proven track record back to 1970 of fighting against discrimination and for affordable housing, quality education, and adequate social safety-nets for “…low- to moderate-income people across the United States” would be just the type of organization that our “liberal” congressman Peter Welch would go to the wall for regardless of the baseless attacks leveled at such an organization by the bigoted and racist right-wing of the Republican party? WRONG! ACORN is that organization and Mr. Welch decided to vote “Yes” on an amendment – last September 17^th – to the Higher Education Act of 1965, which banned all federal funding to the Washington, DC based association of community organizers. This forced ACORN to end all field operations and close all field offices. This was a proud, vibrant, and relevant group with approximately 500,000 members branching out into foreclosure counseling at a time when minorities and the lower 25^th percentile in the country were getting hammered by variable interest mortgages coming home to roost and declining real-estate valuations due to a variety of external and internal forces. They were influential in upping voter registration and turnout amongst minorities during the 2008 election to levels not seen before, which along with their political mobilization efforts were the reason folks like Glenn Beck and Rush Limbaugh lashed out at them so frequently and with such vitriol.

Mr. Welch has always attempted to evince a genuine and holistic concern for the little guy regardless of color, religion, or political preference. This turns out to be nothing more than window dressing given his stance on ACORN. Why am I coming down so hard on Mr. Welch ex post facto? Well it is quite simple really he acted hastily and did not wait for a Government Accountability Office (GAO) report released June 14^th, which vindicated ACORN of misusing the $40.4 million in federal grants it received and election fraud. Furthermore, he wasn’t even one of the 23 signatories to a letter requesting the GAO “…provide information on federal funding provided to ACORN and oversight of the use of this funding.” (Note: Neither Vermont Senators signed this letter either!) I have two questions for Congressman Welch: 1) Why vote before you have all the facts? and 2) Why not signed the aforementioned letter? I wonder what the harm is in having the GAO (Run the ever pragmatic and empirical Republican Douglas W. Elmendorf) do a little gumshoing in an effort to get all the facts in a row. When the facts change we are supposed to change our minds and clearly the facts with respect to ACORN have changed and I would hope that Congressman Welch would change his mind and work to overturn last September’s amendment to the HEA. After all this type of haste when in the hands of congress gives the imprimatur to really well thought out and implemented acts like The Emergency Economic Stabilization Act of 2008 (a.k.a., The Bank Bailout) and the Authorization for Use of Military Force Against Iraq Resolution of 2002. Two great ideas that have served this country and the world oh so well! Oh yeah and one more thing the moneys ACORN received during fiscal years 2005 to 2009 amount to about 0.3% of The 2008 Bank Bailout, which begs one more question: Don’t Mr. Welch and the rest of congress have anything better to do than bully and subsequently shutdown an organization like ACORN? I thought we wanted the truth, the whole truth, and nothing but the truth! Orwell was right Ignorance Is Strength on Capitol Hill.

Below I have plotted the average annual income here in the US back to 1815 for the US Senate and 1967 for us little people. I mean that in all seriousness, because if ever there was a graph that said it all it is this one. The inset simply shows the same data for the period between 1967 and 2009, which is the timeframe where data is available for all percentiles. You will note the inset also has a number followed by the letter x, which if you remember back to any statistics or math courses you may have taken is simply the slope of a given trend (i.e., in this case it is a linear regression). The # that proceeds each x corresponds to the annual increase in each percentile’s average annual income. There are two extremely disquieting trends in this data: 1) the “haves” (i.e, Top 5^th percentile) and “have nots” spread is widening at an ever great clip, with annual income increases for the former 2.3 to 22× that of the latter percentiles and 2) the DC fat cats are gaining on this nation’s net-worth “elite” at a pace that one would hope would cause them a mild case of opprobrium. Fat Cat Fat Chance!

Maybe those Tea-Partiers are on to something if you strip away their bigoted, xenophobic, and often hypocritical bluster. The gentlemen and women that occupy the The Dirksen Senate Office Building have seen their wallets explode “George Costanza” style, however, only poor George who’s wallet was stuffed with junk our esteemed senators have jammed their wallets, pocketbooks, or man-purses full of Cold Hard Cash. Yet, in an effort to to not appear crooked – like Mr. Costanza did when he stuffed his other pocket with napkins – these folks shower us with patronage in the form of huge defense contracts, agricultural subsidies, and a static retirement age even though life expectancy in this country has risen to 148% of what it was at the turn of the 20^th century.

To those on the right that preach against Obama’s predilection for industrial policy I would challenge them not to avert their eyes when the next defense or farm bill comes their way, because if they don’t they will see plenty of industrial policy in these two massive pieces of legislation. The fact is that when we hear senators and their little brothers and sisters in the House talk about putting a freeze on non-discretionary spending they appear to be including their own salaries in the non-discretionary portion of the ledger. It seems to me that one of the reasons The Capitol Hill Gang doesn’t really attack everyone from Lloyd Blankfein and Rex Tillerson to their buddies Warren Buffett and Monsanto CEO Hugh Grant because they know that the only way they can maintain their excessive $3,676 annual salary increase is if they cajole the club they are set to surpass within the next ten years.

If you will humor I would like to return briefly to the George Costanza analogy vis à vis DC Motley Crue in order to put a bow on this portion of the story. As this particular episode of Seinfeld came to an end Mr. Costanza’s wallet suffered a tragic end at the hands of its greedy owner who decided to stuff a guitar lesson advertisement in it. This was the last item placed in the poor wallet as it exploded due to an excess of everything from hard candy and coupons to the requisite cash and receipts. Unfortunately the only people in this country willing to expose congress for its glutinous ways, both personal and as it relates to the aforementioned ill-apportioned largesse, are the Tea Partiers on the right and the folks I have marched proudly with at The UN, The Capitol, The RNC in St. Paul, etc. Both sides have heroes and when you scrape away the veneer each makes valid points. However, they (we) couch our arguments in so much irrational exuberance and non sequitur attacks that the message and the facts that directly – or indirectly – back them up are easily marginalized or out-and-out mocked by the media and the lawmakers alike.

Regarding Supreme Court case No. 08-205 Citizens United v. Federal Election Commission, which ruled that the federal government may not ban politically motivated spending by corporations in candidate elections:

“…the most partisan decision since Bush v. Gore.”

“It’s basically the neutron bomb in our election system. It’s such a reversal, you can only guess at some of its far reaching implications.”

You would think these were the words of someone who had done everything in his or her power to prevent the inevitable 5-4 ruling handed down by the Supreme Court last month. You would think if this is the ex post facto reaction of a legislature than maybe that legislature had exhausted all avenues of preventing such a ruling. You would be wrong. These are the words of Vermont’s senior senator Patrick Leahy in The New York Times (http://www.nytimes.com/2010/01/29/us/politics/29scotus.html?ref=todayspaper) and on VPR (http://www.vpr.net/news_detail/87100/), respectively.

It is really quite simple Senator Leahy as the lead Democrat on the Senate Judiciary Committee during the confirmations of both Chief Justice John Roberts and his sycophant Samuel Alito had the option to filibuster the confirmations of both to the Supreme Court. He chose not to do so in both cases. He chose a more conciliatory tact instead, because George W Bush had been so amazingly conciliatory I guess?

Even the least schooled legal onlooker could see during the confirmation of these two archconservatives they were hell bent on reshaping the American legal system. Neither judge gave what appeared to be answers to the questions posed to them by Senator Leahy and his fellow Democrats. In all fairness the questions were quite pointed, however, the problem was that for as pointed as the questions were the answers were equally opaque to the point of being complete mumbo-jumbo. Yet, the point that both justices made perfectly clear was their allegiance to the principle of stare decisis, which basically means that judges are obligated to show deference to historical precedent. Judge Roberts especially was quite adamant in his loyalty to this principle, while judge Alito as was his want preferred a more circuitous route. Here is where it gets juicy last month’s ruling on which both judges predictably sided with big corporations overruled two…PRECEDENTS! The first being Austin v. Michigan Chamber of Commerce and McConnell (i.e. Senator Republican Leader Mitch McConnell) v. Federal Election Commission, both of which challenged the Bipartisan Campaign Reform Act or as it is commonly referred to McCain-Feingold.

The conservative majority and fence rider Anthony Kennedy decided that corporations are entitled to protections under the Fourteenth Amendment as jurisitic persons (http://en.wikipedia.org/wiki/Juristic_person). This idea that corporations should have the same inalienable rights as citizens dates back to cases like Santa Clara County v. Southern Pacific Railroad Company in 1886and later U.S. v. Detroit Timber and Lumber in 1905 (http://en.wikipedia.org/wiki/Santa_Clara_County_v._Southern_Pacific_Railroad; http://www.answers.com/topic/santa-clara-county-v-southern-pacific-railroad). The common thread is the debate about what constitutes a person in the United States. With this latest ruling the Supreme Court came down decidedly in favor of the idea that my vote and your vote are no less important than the collective will of corporations. This is a very scary thought as is evidence in Senator Leahy’s comments. More importantly this was a ruling that could have easily been avoided if Senator Leahy had stood up to the corporatist and civil liberty violating ways of the Bush administration. He didn’t and I would hasten to add that is why we’re at the dawn of a new era in electoral subterfuge

What these two judges said and how they ruled, wrote, and spoke in the past were two entirely different things. I knew this from my brief reading-up on the two candidates and I am sure Senator Leahy and his considerable staff at the Senate Judiciary Committee, with considerably more resources and expertise was well aware of this double-speak and -think. Yet, Leahy knowing all this and with his considerable legal background decided to back away from a filibuster the most extreme tool he had left. Extreme times call for extreme measures Senator Leahy and make way for someone that wants to stay in the ring for all nine rounds.