I sent a copy of INDIREFI to Senate Committees first. If they screw up the loans to the auto industry, it will be deliberate. When Lutz spoke, Congress had a clue of what they could do in a sensible way before Lutz started to talk.

I am still waiting for the Free Traders, Business Roundtable, and the rest of the Economic Surrender Lobby to start screaming. They are very quiet so far, too quiet.

Consumer spending increased. Spin of the spin.

I'm fairly shocked that both parties are running the "lower taxes" mantra as if the tax code is the only economic tool available. But then, this is one massive public relations war versus policy.

There is more to the story than just wages. They can play not only in essence, making profits by manipulating domestic currencies, inflation rates and so on but also reduce their gross profits by keeping money offshore.

In fact, you can say that lowering tax rates may even cause labor arbitrage. The government signals by drops in the corporate rates that no one cares about off-shoring jobs and shuttering factories.

The idea behind this protracted story is that McCain and Obama are about to tell the Big Lie: just lower the rates and the economy will get better. Let us go on record to say why history shows that lowering rates is a fraud and worse.

Carly Fiorina has been doing a media blitz to get the CNBCs of the world to buy into her Con Game. Fiorina has told CNBC that lowering tax rates was what drew HP to Ireland - not lower wages.

Actually corporate taxes make are about 1.5 to 2 percent of Gross Sales. Wages are 60 to 70 percent of Sales. So when HP moved to Ireland, guess why Fiorina did it.

But Palmisano moving production to China was much worse.

Real Estate Lender Integrity Bank has failed.

Regions Bank of Birmingham, Ala., is assuming all of Integrity Bank’s $974 million in insured and uninsured deposits in 23,000 accounts, and about $34.4 million of the bank’s $1.1 billion in assets.

The remainder of Integrity’s assets are being retained by the Federal Deposit Insurance Corporation. The agency said it estimated that Integrity’s failure would cost its deposit insurance fund $250 million to $350 million

I sure hope that is an accurate estimate on the cost.

I'm so used to seeing Billion, even with a bank failure announcement the quantity million is a relief.

As I understand it, India is extremely protectionist themselves:

> For now, India's protectionist regulations give homegrown companies like Pantaloon Retail, RPG Retail and now Reliance Retail a head start. But there is political opposition to opening the retail sector to foreign investment, with fears that overseas competition would lead to job losses and drive smaller domestic operations out of business.

iht article.

> British companies, especially distillers, supermarket retailers and financial and legal services companies, have found Indian bureaucracy and protectionism a formidable opponent.

timesonline

Go to google, type in: "Indian protectionism" with no quotes, and read as much about it as you want.

Since the Korean War and Excess Profits Taxes on Corporations, Top Corporate Rates have fallen steadily. The U.S. has no Value Added tax, like Europe. VAT can be as much as 30 Percent and at least 15 Percent. VAT and Corporation Taxes are social taxes on production by society. The current effective rate on corporations is just over 20 percent. 38 percent of companies pay no tax at all, or get hit with the corporate Alternative Minimum Tax of 20 percent. So when we see the 35 percent sticker price (top rate) quoted, remember that hardly anyone pays 35 percent. So what did we get for cutting corporate rates for 50 years? Manufacturing jobs fell from almost 30 percent of all jobs to less than 10 per cent of the job base.

In the last 8 years we see falling income with the middle class.

So when any candidate at any level proposes Corporate Rate Cuts, please ask for any proof that rate cuts do any good.

Until   Taxable Inc           Max Rate (%)

Year

1946   50000                   53

1950   25000                   42

1951   25000                   50.75 (1)

1967   25000                   48 (2)

1968   25000                   52.8

1970   25000                   49.2

1974   25000                   48

1979  100000                  46

1981  100000                  46

1983  100000                  46

1986 1405000                 46

1987 1405000                 40

1993   335000                 34

2004 18333333                35 (3)

(1) sum of income and excess profits taxes was capped t a given percentage of income (from 62% to 70%)

(2) Rates include the Vietnam War surcharge of 10 percent.

(3) AMT Rate Set at 20% - IRS Reports 38 Percent of Corps pay No Tax Actual Max is 35 Percent

Roubini repeated the $1.5 Trillion. The original number was a calculation of an estimate of default based upon 7 percent of the value of all mortgages outstanding.

Who really knows what that number is. It's a guess. Markets love to hear outside estimates so they can put a number on something an go on to other destructive actions.

It's where they empty the coffee cup that has me worried.