Austan Goolsbee, the new Chair of the Council of Economic Advisers at the White House, tackles the tax cut fight and what it means that Congressional Republicans are “holding middle class tax cuts hostage.”   He uses the old fashioned white board and does it effectively.

Beezer here.  Click on the white board link to see the video.  The first links to the President’s speech.

From the blog Angry Bear by Dan Becker who writes a post going over the numbers about that $4 trillion in deficits that will accrue if the Bush tax cuts are allowed to run for the next 10 years.

“This is a simple little exercise that frankly I wonder why no one with a pulpit (that would be you congress critters, executive office and MSM) has done it. It is for those who think simplistically. Thinking like:  wealthy people create jobs with their extra money and not the non-wealthy people’s demand for stuff that makes them feel wealthy.

Let’s say that tax cuts create jobs.  770,000 jobs  for what is it, $4 trillion over 10 years? The obvious question is: How many jobs do we really need for that money to break even? Come on conservatives, you’re suppose to be the “efficient minded” thinkers. How many jobs would it take to pay it back?

Median household income for 2009 is $49,777. 5% less than the peak of 1999 by the way. Full time working men it was $47,127, women $36,278. Per capita income was $26,530. These numbers are from here. 

Using the household income number just because, in 10 years, you would need 80,358,389 jobs created to equal the tax cut.. Eighty plus million jobs. Of course, that we created these jobs does not mean all that money is paying for the $4trillion in lost tax collections. Only a percentage of the income is collected by We the People as income tax. Based on the Tax Foundations data that figures out to an average of 12.68% of taxable income paid as income taxes. Thus, $6,311.72 is paid for income tax for the median household income.

Stay with me here, this is simple. $4 trillion divided by $6311.72 is: 633,741,674 jobs in ten years. About double our total population in 10 years needs to be working.

Our policies have to start producing 63,374,674 jobs as soon as the tax cuts are passed, at the beginning of each year (’cause we need to collect the full $6311.72 at the end of each year) to pay for the tax cut. That is over the year, we need the equivalent of 63,374,674 jobs each having generated $49,777 of taxable income to make the mark for paying off the tax cut for that year. Not every job will pay that much for the year, so we actually need more than 63,374,674 jobs. That is, unless magically at one tick past midnight New Years Eve suddenly we have those jobs paying at that rate.

Sixty three million jobs per year. Really? Come on, you think this is possible? This nation is gonna need a lot more copulation and immigration happening over the next ten years for that to happen.
Let’s say it is possible, just not here. China?

Not even in China can do it, as they only managed 22 million jobs in 2 years . Though they did manage to provide 112 million more willing workers over the last 10 years. Problem is, even at 22 million jobs, those sure are not at a median income of $49,777/year.

So.  Really… tax cuts? LOL. Pay for them with job creation? Oh please, you’re killing me!”

The first amendment to the Constitution protects religious freedom and prohibits establishing a national religion.

But in order to have those freedoms and prohibitions actually exist, it requires that the final authority in the matters of religion be secular and free from religious influence.   In order to have government protect religious freedom, government must have the same freedom from religious influence.  These two freedoms are two sides of the same coin.   Freedom of religion requires freedom from religion.

Take for example the current controversy surrounding a proposal to build a Muslim mosque  near the site of the September 11, 2001 massacre of more than 3,000 people in New York City.  This massacre was committed by Muslims.  In many parts of the world Muslims celebrated the massacre.  Not surprisingly therefore, many US citizens are offended by this particular proposal.

While the Constitution clearly gives Muslims a right to practice their religion freely, it also clearly requires a secular process of approving the church project.  The desire to build the church comes in the form of a request that must be approved by a secular body.  It cannot be a demand, it must be a request.  

Thus, the secular process is required and sacrosanct.  Whether the final approval or disapproval of this particular church building proposal comes in New York City or before the US Supreme Court, the final authority resides in a secular process.  Not in a religious one.

This doesn’t make the decision any easier.  But one thing is Constitutionally clear, the decision will be made in a secular arena free from religious influence.

Courtesy of the Onion, a spoof on the defense of the rich.

Analogies are always imperfect of course.  But the root watering one as an analogy for what’s been happening to America’s economic ‘plant,’ is appropriate.

In an economy, the ‘roots’ are represenated by the vast numbers of workers, professionals and small to mid-sized companies.  It’s from these areas that economic vitality grows–or withers if these areas are not cared for.

A precise measurement of whether these drivers of economic vitality are healthy or not is how much these sectors get of the economic pie.  Because these sectors are the major creators of economic vitality that grows the pie, if they are failing to benefit from growth then it follows that the economic vitality will wither.

This measure is about shifts in income.  The measure shows that over the past 30 years there’s been a big shift in income from labor, professionals and small to mid sized companies to large corporations, their top executives and their owners.

From an article at the Center on Budget and Policy Priorities  in its ‘Off the Charts’ section entitled ‘Enough is Enough on Tax Cuts for Wealthy,’ written by economist Chuck Marr.  Marr is the Director of Federal Tax Policy at the Center on Budget and Policy Priorities.  From 1999 through 2004, he was Economic Policy Advisor to Senate Majority Leader Tom Daschle and Senior Advisor for Budget Policy at the National Economic Council from 1997 through 1999 during the second term of President Clinton.  Tax policy was a key area of responsibility of both these positions.  In addition, earlier in his career he was Chief Economist of the Senate Budget Committee and a professional staff member of the Senate Banking Committee.

“As I’ve noted before, over the last three decades a stunning shift in income has taken place in this country, from the middle class to those few at the very top of the income scale.  Back in 1979, the middle 20 percent of Americans had more than twice as large a share of the nation’s total after-tax income as the top 1 percent.  But by 2007, the top 1 percent’s slice of the economic pie had more than doubled and in fact exceeded the middle class’s slice, which had shrunk.

This great income shift means the average middle-income American family had about $9,000 less after-tax income in 2007, and an average household in the top 1 percent had $741,000 more, than they would have had if the 1979 income distribution had remained.  Here’s how this looks in graph and table form:

Fully two-thirds of the income gains in the last economic expansion (2001-2007) flowed to just the top 1 percent.  This is not a healthy sign for a society.  As Professor Thaler urges, we need to decide whether we want to promote still-greater inequality (by extending the high-income tax cuts) or lean against this trend.  Each year the average millionaire gets about $125,000 from the Bush tax cuts, according to the Urban-Brookings Tax Policy Center.  Now seems to be a good time to say enough is enough.”

Democracy is under assault around the world.

Communist countries like China and formerly communist Russia have merged their non-democratic governments with capitalism to form state capitalism where state treasuries are used to provide an unlimited amount of capital to semi-autonomous private corporations.   These corporate hybrids are busy buying up basic resources around the world in an effort to insure their economies of the future will have the resources to thrive.

In terms of power and reach these hybrids dwarf traditional private corporations.  They dominate global finance, and  international trade, including that of petroleum. 

In the United States, large domestic and multi-national corporations dominate the political system.  With the power of corporate treasuries applied to lobbying Congress and the White House, these special interests have always been a force in government. 

The US Supreme Court, in a decision this year, consolidated this corporate grasp of government by removing a century of Supreme Court decisions that restricted the use of corporate funds to influence campaigns.   

Unleashing this flood of corporate money has already had a predictable result.  In today’s newspapers the Associated Press reports: “In one way at least, the fight for control of Congress is grossly one-sided.  Just five weeks from midterm elections, groups allied with the Republican Party and financed in part by corporations and millionaires have amassed a crushing 6-1 advantage in television spending and now are dominating the airwaves in closely contested districts and states across the country.”

In recent decades the Republican Party has become narrower and narrower politically.  It jettisoned most of its moderate members, and the right wing Republican Tea Partiers are now in the process of jettisoning what few moderates remain.  The party is being funded almost entirely by large corporations or their non-profit political action committees (PACs).

In a January 21 post  about the Court’s decision we predicted this result.  ”The only cure for this idiocy is new laws, or re-written laws.  The Supreme Court’s role is to interpret laws.  But only Congress can write the laws.  Congress needs to respond to this problem quickly.  Otherwise, in direct contravention to what the Supreme Court says, the vast majority of Americans will have their voices drowned out.  This is a prescription for abuse, and it will dishearten many who will give up any hope of real change because they will now have no reason at all to believe our governments reflect their desires.”

Barry Ritholtz, author of the blogsite The Big Picture, described the change as a new dynamic, a new paradigm.  The old dynamic of left vs right is now one of individuals vs corporations.  ”This may not be a brilliant insight, but it is surely an overlooked one,” wrote Ritholtz, “It is now an Individual vs. Corporate debate – and the Humans are losing.”  

Where this all leads is any one’s guess, of course.  But from the early signs, one place all this won’t lead to is more democracy.