Ezra Klein: Candidate Obama vs President Obama

Great Op-ed:
At the 2007 Jefferson-Jackson dinner in Iowa, Obama delivered a speech that proved decisive in his campaign’s victory there, and thus his national victory. But its core wasn’t a policy agenda. It was, in a way, a philosophical agenda. It was a promise about how Obama would do business more than about what business he would do. .............But President Obama soon found himself faced with a choice: he could change U.S. politics, or change U.S. policy. He chose changing policy.


http://www.bloomberg.com/news/2011-12-01/we-asked-obama-for-change-got-t-shirts-instead-commentary-by-ezra-klein.html

Bartlett on Revenue Declines from Bush Tax Cuts

This is a brief quote from a recent Bruce Bartlett article on Newt Gingrich. The article is a good read but I found this stat particularly useful:
For example, Republicans frequently assert that tax cuts, especially for the rich, generate so much economic growth that they lose no revenue. This theory has been thoroughly debunked, most recently by the tax cuts of the George W. Bush administration, which, according to C.B.O., reduced revenues by $3 trillion. Nevertheless, conservative groups like the Heritage Foundation (where I worked in the 1980s) still peddle the snake oil that the Bush tax cuts paid for themselves.

http://economix.blogs.nytimes.com/2011/11/29/gingrich-and-the-destruction-of-congressional-expertise/?partner=rss&emc=rss

Robert Dallek Column on Why We Love Certain Presidents

Great column here from Robert Dallek at Bloomberg that discusses why we favor certain Presidents from our history and why our simplistic assumptions contribute to our current political problems.

But America’s current political divide has produced equally ludicrous notions of outsized defects. The contemporary conservative idea that government is the source of all the country’s woes is reductionist and worse. The Tea Party crowd seems incapable of understanding that New Deal and Great Society programs humanized the U.S. industrial system and saved free enterprise from its worst excesses.
On the other side, the Occupiers have decried the greatest concentration of wealth since the 19th-century Gilded Age, but they have been too quick to strike out at symbols of the national malaise without advancing a coherent agenda for righting social and economic wrongs.
The country is unquestionably struggling with large economic problems that jeopardize its domestic tranquility and future prosperity. But anti-government rhetoric and anti-Wall Street complaints hardly provide credible answers. The opposing sides see nothing ahead but doom and gloom unless they win command of the nation’s power centers and enact their programs of change.


http://www.bloomberg.com/news/2011-11-30/kennedy-reagan-loved-for-all-the-wrong-reasons-robert-dallek.html

US Actually Net Fuel Exporter

 This is going to be the first year since 1949 in which America exports more fuel than it imports, thanks to sagging demand at home and booming economies elsewhere.

http://www.newser.com/story/134359/us-becoming-net-fuel-exporter.html?utm_medium=goognews&utm_campaign=chan3_feed

Chart on Deficit

Great chart below from Crandall, Pierce & Co.

Howard Marks on U.S. Taxes

I've put in a link to an interesting memo from Howard Marks, CEO of Oaktree. This is a very comprehensive piece on our current tax policy as well has future alternatives for the tax structure of the US. While I disagree with some of the points he makes in his conclusion, this is still a worthwhile read in order to understand the tax issue at hand.


The top 1% of U.S. taxpayers pay 38% of all individual federal taxes. The top 10% pay 70% of all taxes, the top 25% pay 86%, and the top 50% pay 97%.
That leaves the bottom 50% of all taxpayers paying only 3% of the total.
About half of Americans pay no federal income tax, and almost 25% pay no federal taxes at all.
The average federal income tax rate for the top 1% of Americans is 23% (and for the top half it's 14%), while the average rate for the bottom half is 3%.

Notwithstanding the rhetoric, there's no doubt about the fact that America's top earners are taxed more heavily than the rest. On the other hand, they pay at lower rates than they used to (when I was a boy the top marginal rate was 94%), and it seems progressivity has declined.
". . . the effective federal tax rate, including payroll taxes, for the wealthiest 0.01 percent of earners fell to 31.5 percent in 2005, from 42.9 percent in 1979 [for a decline of 26.6%], according to data from the Congressional Budget Office. Over the same time, effective rates for taxpayers in the center of the range fell to 14.2 percent, a decrease of just 4 percentage points [or 22.0%]." (The New York Times, September 21, 2011)
.....................
One of the outstanding characteristics of the U.S. economy at this time is the rising dispersion between incomes. The percentage of total income going to higher earners has been increasing dramatically, whether because of (a) the rising importance of education and technological literacy or (b) the movement of work offshore, the declining availability of blue-collar jobs and the reduced power of private-sector unions to garner wage gains. And given the pattern of tax cuts and the special treatment given to income on capital, the tax system has magnified the divergence.
A recent report from the Congressional Budget Office provided dramatic evidence of the divergent trends in income. It outlined the percentage gain in average inflation-adjusted after-tax income of various income groups between 1979 and 2007:
Top 1% of the population in terms of income: 275%
Next 19%: 65%
Middle 60%: 40%
Bottom 20%: 18%

http://www.valuewalk.com/2011/11/howard-marks-memo-taxing/

Fact or Fiction: Grover Norquist

This is an interesting fact checker article on Grover Norquist. The Washington Post has several articles on Mr. Norquist on its website today, some that support him and some that deride him. Rather than get caught up in that mess, I suggest you read this article to at least see if his facts are correct. As you can see below, many are not:

Finally, let’s examine Norquist’s claim that “we just wasted $800 billion on stimulus spending that added to debt that killed jobs. There are fewer jobs than before.”
First of all, Norquist appears to have forgotten that, depending on how you do the math, the stimulus bill included between $218 billion and $288 billion in tax cuts. Norquist is a huge fan of marginal rate reductions so perhaps he does not consider items such as the “Making Work Pay” tax credit to be a true tax cut. But it is simply incorrect to refer to “$800 billion of stimulus spending.”
http://www.washingtonpost.com/blogs/fact-checker/post/grover-norquist-a-misleading-accounting-of-recent-history/2011/11/27/gIQAAhER2N_blog.html

Terrific Article on Governance in the US

I have found very few articles that cut to the heart of what's wrong in today's political environment better than this article by Clive Crook of Bloomberg. Please take the time to read it. Some relevant selections:

• Lately the ideological center in Congress has thinned, and the distance between the parties has widened. Compromise has come to be seen as surrender -- and the U.S. government has all but come to a halt.
• One school of thought says that voters only think they want compromise. If they saw it, they wouldn’t like it...... I don’t believe it. I have a higher opinion of voters. Most of them, I think, would support the Simpson-Bowles approach if it were offered to them and properly explained. Somebody ought to try it, at least.
• My own theory of U.S. political paralysis is not that a deeply divided electorate is getting what it asks for, but that the balance of power between party leaders and activists has moved too far in favor of activists. This leaves the center disenfranchised. Activists are not ordinary people......The insurgents have pushed a modern Republican Party that was conservative to begin with much further to the right.

http://www.bloomberg.com/news/2011-11-23/paralyzed-congress-better-than-self-destruction-commentary-by-clive-crook.html

WSJ Video onhiring practices of U.S. Multinational Firms

WSJ CEO Conference- Simpson/Bowles Interview

This is a must read for anyone concerned with recent budget deficit proposals.


http://online.wsj.com/article/SB10001424052970203699404577041774026396602.html