Must Read Posts for July 5, 2010

On The Economic Populist you might have noticed the right column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.

Sometimes though, one cannot say it better but miss those who did.

Must Read Post #1

The New York Times analyzed the corporate tax code and found the oil industry is one of the most subsidized of them all.

According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.

And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by var-ious credits. These companies’ returns on those investments are often higher after taxes than before.

Must Read Post #2

Intel Corporation founder and retired CEO Andy Grove promotes a new industry policy, manufacture in the U.S. He specifically calls out offshore outsourcing and global labor arbitrage as the thing hurting the U.S. worker. It's almost a cultural problem, the Venture Capitalist, investors culture. It's herd behavior from them, requiring start-ups to offshore outsource production, manufacturing and even R&D even to obtain funding. Add Grove's article to the top 10 revamp U.S. manufacturing plans, dutifully being ignored by Congress and the Obama administration.

As time passed, wages and health-care costs rose in the U.S. China opened up. American companies discovered that they could have their manufacturing and even their engineering done more cheaply overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering.

Must Read Post #3

The actual study isn't out yet, but Naked Capitalism overviews PhRMA's lies, claiming they must jack up drug prices due to research costs. Pharmaceutical companies have been lying for years, now an upcoming study by the London school of Economics will prove it. They also offshore outsourced much R&D in 2006.

Must Read Post #4

Paul Krugman calls out the GOP for refusing to pass unemployment benefits extensions in Punishing the Jobless.

Must Read Post #5

Paul Krugman also believes the U.S. is in the early stages of the third Depression and puts the responsibility for it right where it belongs, the politicians and their inane policy and legislation.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.



27,000 abandoned gulf wells not checked for leaking

This is scary, AP is reporting there are 27,000 abandoned oil wells in the gulf that no one is checking for leaking.

Ya all, the "Must read posts" are also open threads, so if there's something shocking you don't want to make an instapopulist or you just want to say something, this is a good place.

Wall Street Journal Writes Economic Fiction

This is incredible. Talk about the inability to even look up the never ending declining tech jobs in the U.S. or our never ending increasing trade deficit in advanced technology. WSJ claims it's "no big deal" to offshore outsource jobs and spits in Andy Grove's face. Uh, WSJ, have YOU ever built up an entire microprocessor industry? I don't think so!

Hawley Smoot

This illiterate on the WSJ never bothered to find out that by the time the Fed has squeezed the byJezus out of the economy from 1929-30, the Depression was already upon us.

HS needs careful examination. There is a weird twist in HS Tariff in no other: petroleum exports got a tariff also. That's right, America's biggest export was taxed on sales around the world. In those times, the US supplied the world with oil.

HS was one of hundreds of tariffs passed by Congress between 1789 to 1929. Guess what? No tariffs were imposed before the 1873 Depression.

The very first bill passed by Congress in 1789 was a Tariff on 69 articles from Britain, and surprise! no depression.

BTW, how well is 35 years of Free Trade starting with the WTO in 1975 working out? Not so good? So compare
the post WWII era with 1975 and after. How did so-called free trade help us? And how do we get so many terrible recessions with so many Free Trade agreements?

Burton Leed