Saturday Reads Around the Internets - Romney is Bush Redux

shocknews Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.

 

Romney's Economic Policies Would Be Bush Redux

Bloomberg did an in depth report on Romney's economic advisers and policy positions. Surprise, he's back....like poltergeist, it's Gregory Mankiw, Bush's economic adviser.

Among the financial and business experts advising Romney’s campaign are Columbia University’s R. Glenn Hubbard and Harvard University’s N. Gregory Mankiw, both economists who headed the Council of Economic Advisers under President George W. Bush. Rounding out the team are former Missouri Senator Jim Talent and onetime Minnesota Congressman Vin Weber, now Republican lobbyists at Washington-based firms.

Hubbard, who helped craft the 2001 Bush tax cuts, played a key role in drafting Romney’s tax initiatives. He, and later Mankiw, chaired the Council of Economic Advisers amid the slowest job growth for any prior president since World War II.

 

Financialization & Executive Pay Fuel Income and Wage Inequality

EPI has a new report on executive compensation, including options, worker pay and income inequality. But what they prove is what we already know. Wall Street and outrageous CEO pay have literally turned the United States into the land of serfs and the feudal lords.

Growing income inequality has a number of sources, but a distinct aspect of rising inequality in the United States is the wage gap between the very highest earners—those in the upper 1.0 percent or even upper 0.1 percent—and other earners, including other high-wage earners. Driving this ever-widening gap is the unequal growth in earnings enjoyed by those at the top. The average annual earnings of the top 1 percent of wage earners grew 156 percent from 1979 to 2007; for the top 0.1 percent they grew 362 percent (Mishel, Bivens, Gould, and Shierholz 2012). In contrast, earners in the 90th to 95th percentiles had wage growth of 34 percent, less than a tenth as much as those in the top 0.1 percent tier. Workers in the bottom 90 percent had the weakest wage growth, at 17 percent from 1979 to 2007.

 

The Real Reason the Unemployment Rate is Dropping

The Washington Post details how eight more states are cutting extended unemployment benefits. Run out of unemployment without a job and guess what, soon you aren't counted in the unemployment statistics either.

More than 230,000 jobless Americans will lose their unemployment insurance by this weekend as reductions in the federal program that provides extended benefits to the long-term unemployed take broader effect.

The new round of reductions is hitting eight states this month, meaning that about 400,000 long-term unemployed Americans in 27 states will have been cut off of the federal government’s extended unemployment benefits program this year, according to an analysis by the National Employment Law Project, which advocates for the unemployed.

 

Even with Medicare, Expect to Blow Your Retirement

MarketWatch, one of the more accurate organizations covering economic reports, has yet another eye popping statistic. People retiring in 2012 can expect to pay 240,000 bucks more on their health care. That's with Medicare.

Retirement health-care costs are enough to cause a severe anxiety attack. Even with Medicare benefits, a 65-year-old couple retiring in 2012 will spend at least $240,000 in retirement, according to the latest estimate from Fidelity Investments. That doesn’t include long-term-care costs, over-the-counter medications and most dental costs.

Plus, that $240,000 estimate is based on average life expectancy for a 65-year-old—the husband living until age 82 and the wife until 85—but “average” means half of people live longer than that.

 

Student Debt Wiping out a Generation of Dreams

The New York Times outlines the terrible debt burden that comes with trying to go to college these days.

With more than $1 trillion in student loans outstanding in this country, crippling debt is no longer confined to dropouts from for-profit colleges or graduate students who owe on many years of education, some of the overextended debtors in years past. Now nearly everyone pursuing a bachelor’s degree is borrowing. As prices soar, a college degree statistically remains a good lifetime investment, but it often comes with an unprecedented financial burden.

Ninety-four percent of students who earn a bachelor’s degree borrow to pay for higher education — up from 45 percent in 1993.

 

Rotten Apple

Apple is worth more than many countries' GDP and their profits are a result of offshoring. Angry Bear overviews how Apple gets away with it:

This is a genuine problem for the US in the age of digitized information. Companies easily "sell" their most important intellectual property to offshore affiliates, for prices that are set by modeling and that fail to capture the obvious--that no price would actually be sufficient to purchase the company's valuable intellectual property away from it, since the IP is in fact the basis for the company's business. So companies offshore their profits to post-office boxes in tax haven countries and claim that the US Is no longer the source of their profits, even though the IP was invented in the US, is still used in the US and still results in most of the sales actually in the US.

There are at least two possible solutions. One would be to deny companies the ability to treat the IP they use to create their products as sold for tax purposes, and to permit only licensing for royalties to actual factories in countries that are not tax havens. Another would be to end the deferral on "active business" profits offshore. It makes no sense because it incentivizes companies to offshore as much of their business as possible.

 

Big Oil is Gaming the System

Ritholz doesn't mince words. He outlines how big oil is gaming the system to keep U.S. gas prices high.

The U.S. Is Now EXPORTING Oil, But the Oil Companies Are Gaming the System By Switching To a Different Benchmark to Keep U.S. Oil Prices HIGH … And the Keystone Pipeline Will Create Even HIGHER U.S. Prices.

 

On the Brighter Side

The United States posted it's first budget surplus since 2008. MarketWatch:

The U.S. government in April posted its first monthly budget surplus since September 2008, the Treasury Department said Thursday, as tax receipts climbed and spending on education, Medicare and certain defense programs fell.

The surplus of $59 billion is the first of Barack Obama’s presidency, and lands at the outset of a presidential-election campaign expected to be fought largely over the issues of government spending, taxes and jobs.

The surplus in September 2008 — the month Lehman Brothers filed for bankruptcy — was $46 billion.

 

California's Budget Deficit to Hit $16 Billion

Good god, and they are proposing to raise taxes despite already being the highest in the nation.

California’s budget deficit has swelled to $16 billion after tax collections trailed projections amid the tepid economic recovery.

Brown this week submitted more than 1.5 million signatures to place the tax measure on the ballot. It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.

Illegal immigration is estimated to cost California $11 billion a year. Just sayin'.

 

Trade Agreement Tool of the 1%

Public Citizen is tracking the latest disaster for regular people under the guise of a new trade agreement, called TPP:

The Trans-Pacific Partnership (TPP) twelfth round of negotiations will begin behind closed doors at the Intercontinental Hotel here. Branded as a "trade deal" by its corporate proponents, the TPP in reality would establish new corporate rights to ease job offshoring, attack environmental and health laws in foreign tribunals and extend medicine patents. Its expansive non-trade provisions would impose constraints on government regulation of financial firms, food safety and more. As the Huffington Post's Zach Carter reported, the TPP would even ban "Buy America" procurement policy.

The TPP also includes aspects of SOPA, the controversial Stop Online Piracy Act. The pact would even elevate corporations to equal status with signatory governments allowing them to privately enforce their new rights be suing government in foreign tribunals to demand taxpayer compensation for policies that undermine the companies' expected future profits. Intensive negotiations have been underway for two years under conditions of extreme secrecy. More than 600 hundred corporate "advisors" have access to the draft texts while the press, public and Congress are shut out.