Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
It Could Have Been Worse
About the only thing Populist Progressive Democrat Congressman Peter DeFazio can say about Obama these days is it could have been worse. Long slide down from the irrational exuberance of 2008.
Expect More More Market Insanity
This is a no brainer, but just in case someone out there thinks the Market ride is over, Market Watch gives you some outliners on why it's going to be another wild ride. This site will overview these economic reports, but for computerized flash trades, uh, we can't even write that fast.
The Dow Jones Industrial Average, DJIA -1.57%, shed 4% in the past week, for an 11% loss in August. Similarly, the S&P 500 Index, SPX -1.50%, dropped 4.7% on the week for a 13% loss in August, and the Nasdaq Composite Index, COMP -1.62%, dove 6.6% for the week for a 15% August haircut.
The dollar fell against the major currencies Friday, pushing it toward a weekly decline, while the greenback hit a new low against the Japanese yen.
Gold, GC1Z +1.83%, futures surged to another record Friday as investors held a dim view of global growth prospects and sought instead the perceived safety of the metal.
Gold added 6.4% in the week and closed at $1,852.20 an ounce. It has gained 14% this month, having ended July at $1,631.20 an ounce. On Friday, it traded as high as $1,881.40 an ounce, an intraday record for the metal.
How Big is the Deficit
Attempting to counter more economic creationism, Economist James Kwak sets down to show you the real deficit numbers in this budget analysis article:
According to its CBO score, the Budget Control Act of 2011 (a.k.a. the debt ceiling agreement) initially reduced aggregate budget deficits over the next ten years (2012–2021) by $917 billion, with a provision that ensures that deficits will be reduced by another $1.2 trillion (either through an agreement in the joint committee that is ratified by Congress, or through automatic spending cuts). The chatter in Washington is that even with the $1.2 trillion, this is still too small, and there is still this massive deficit hanging over our heads. This is true to an extent, but not the way you are being led to believe.
Foreign Students on Work Visas Walk Out On Hershey
Yet another cheap labor scam, this time corporations bring over students on work/travel Visas and instead of seeing America, they are forced to become glorified slave labor. The question never asked is why is this allowed in the first place with an official unemployment rate above 9%, with the unemployment rate for those under 25 hitting depression era levels?
The students, from countries including China, Nigeria, Romania and Ukraine, came to the United States through a long-established State Department summer visa program that allows them to work for two months and then travel. They said they were expecting to practice their English, make some money and learn what life is like in the United States.
In a way, they did. About 400 foreign students were put to work lifting heavy boxes and packing Reese’s candies, Kit-Kats and Almond Joys on a fast-moving production line, many of them on a night shift. After paycheck deductions for fees associated with the program and for their rent, students said at a rally in front of the huge packing plant that many of them were not earning nearly enough to recover what they had spent in their home countries to obtain their visas.
Bad Math Makes It to Key Economic Indicators
Frankly, it's very easy to make a calculation mistake, a cut and paste error, or a typo. Sorry, blame Microsoft. I do. This Wall Street Journal piece outlines the latest problems with raw data. Yes folks, check everything, we do.
Last week, the U.K.'s statistical agency erroneously reported that second-quarter construction output, a key measure of economic activity, had risen 2.3%, then corrected the figure to a far less robust 0.5%. The revision whipsawed financial markets.
Sometimes, technology makes it easier for mistakes to happen. Computerized trading has given rise to a genre of errors on Wall Street known as fat-finger slip-ups, because pressing a wrong key can mean a difference of millions or billions in trades. Several times in the past two decades such flubs have sent market indexes careening.
With so much data flowing in to corporations and governments, glitches are inevitable, says Gary Steinberg, a spokesman for the U.S. Bureau of Labor Statistics. His agency routinely issues corrections to its official reports. So far this year, they have had three dozen corrections, which are distinct from routine revisions of economic indicators issued once more precise data become available.
HP is a Shining Example of Bad Corporate America
In case you missed it, two months after releasing a major technology product line, HP cancelled it, plus now wants to compete with IBM, moving to software and services, and exit from the hardware & PC business. Why? Low Profit Margins. Who helped make low profit margins happen in the world of PCs and hardware? Why Hewlett-Packard with their never ending offshore outsourcing and labor arbitrage. Market Watch really nailed it in calling HP the worst of Corporate America:
Thursday’s performance is a fitting example of how short-lived any rays of hope are for HP these days amid the frenetic pace of company developments. The 10-figure buyouts. The claims that it is rethinking its role in the tech sector. The blatant flaunting of its massive cash stockpile at a time when companies claim to be suffering from the economic downturn.
Hewlett-Packard is everything that’s wrong with corporate America right now — stupidity, a lack of innovation, bloated operations and no leadership.
Lots of people thought that Hewlett-Packard was batty when it bought Palm in 2010. At the time, the company didn’t bother to hedge its bets but instead engaged in the typical hyperbole of a big-name buyout.
The piece goes on. We can point to hundreds of companies who do the same absurdity. Executives fire entire divisions, execute a non-sensical LBO which gives great bonus to executives, fire the very engineers who generated key critical patents in the past, thinking they can offshore outsource that creative energy for cheaper or more frightening, believe only the young can innovate.... Corporations routinely start major technology initiatives only to cancel the entire technical strategy without giving it any change and, of course, fire everyone involved to boot. Stupid is as Stupid does. So sorry Packard & Hewlett that your legacy is now being dragged through the mud.
Obama Grants De Facto Amnesty
Unable to pass the Dream Act through Congress, the Obama administration just did it through the executive branch. 300,000 illegals will not be deported, instead given guest worker Visas. This op-ed calls it:
the Obama administration Thursday announced it will impose a version of the Dream (development, relief and education for alien minors) Act on America through administrative fiat.
This is blatant political pandering in an election cycle at the expense of American citizens.
On Thursday, Homeland Security Secretary Janet Napolitano told Congress she has authority to halt deportation of illegal aliens not perceived to be a criminal threat as long as they meet certain criteria, such as attending school or having family in the military.
The new rules would cover up to 300,000 illegal aliens. In 2010, the government deported 200,000 with no criminal records. Under the new rules, most would now likely be allowed to stay and apply for permits.
Opposed by a majority of Americans and twice defeated in Congress, the federal Dream Act essentially grants amnesty to any illegal alien in America if they agree to enlist in the military or attend a U.S. college.
It's true, the Obama administration is more interested in enabling further immigration than using administration power to generate jobs for Americans. Come on, with this level of a jobs crisis anyone believe we need to import more foreign guest workers?
About the only silver lining is taking each situation on a case-by-case basis. But knowing the politics, there won't be too much practicality here in who really deserves to stay, instead more politics. Think that will pull enough votes for ya in 2012 Obama and Democrats?
Warren Buffet's Tax Me!
This Warren Buffet op-ed calling for the super rich to be taxed more raised quite the stir. Gee, the super rich need more money than God, I wonder why that is?
If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.
To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.
Additionally taxing investment profits at 15% increases financialization or the great casino gambling hall called the Markets, and decreases investment in the real, or production economy.
Pete DeFazio on Obama
From the beginning, even before Clinton, Peter DeFazio was active in telling the truth about NAFTA and other so-called FTAs. He marched with union members in the 'Battle in Seattle' in 1999. Earlier in the 1990s, he actively opposed the Clinton administration on NAFTA, pointing out the clause affecting truckers long before that was discussed generally.
Peter DeFazio also had spent summers doing charitable work in Mexico, although he doesn't campaign about it. My point is that he could hardly be accused of opposing NAFTA as a 'racist' -- the way the WTO crew liked to do back then (and maybe still, although you don't hear it much anymore).
Before taking the anti-NAFTA case to the public, he read the thing in its entirety in both English and Spanish. He accurately and publicly, on whatever media he could, explained that the effect of the FTAs would be to render the U.S.A. a third-world nation.
At a town meeting back in those days (first Clinton administration), DeFazio stated that he was pretty sure that Bill Clinton had never read any of the actual proposed agreement. DeFazio seriously had concluded from all his information gathered there in Washington that Bill Clinton had not read NAFTA before he advocated for its enactment. (Some Rhodes scholar!)
When a constituent asked him early in 1994 how he rated Clinton, DeFazio replied that he thought Clinton might aspire to become "one of our better Republican presidents."
Every two years, the RNC collects corporate donations to get DeFazio defeated in November. Every two years their efforts are for naught. DeFazio is one of the greatest arguments ever for opposing term limits. Corporate 'free' trade advocates would love to see him timed out!
some interesting things on DeFazio
I'm pretty sure DeFazio can do math and knows labor econ. Of course anyone who dare comment on immigration and labor markets is labeled a racist, ignoring the info like the above.
DeFazio is one of the few out of the box. So is Marcy Kaptur. We sure could use a lot more out of the box.
J-1 visas for cheap labor, meanwhile 16% U6 unemployment
From: Foreign Students in Work Visa Program Stage Walkout at Plant
"Each summer, the State Department brings many thousands of foreign students to the United States on the international work-travel program, with visas that are known as J-1. "
With U6 unemployment at 16%, this J-1 visa program should be abolished. That's thousands of jobs that Americans could be working. This story provides yet more evidence that guest-worker visa programs are all about providing cheap labor at the expense of American workers.
J-1, L-1, H-1B, H-2B, B-1, pick a guest worker Visa
It's absolutely obscene that they are importing more foreign labor in a jobs crisis so severe it's literally ushering in at minimum, no growth and at maximum a second recession, which at this point I think should be recategorized as a Depression.
It's positively criminal. Even worse, right at this moment, we have a host of insane people who don't know their basic labor economics 101 trying to claim that displacing American workers some how "creates jobs". Not by the statistics and not by the theory does it do this when you're displacing U.S. workers and repressing wages to boot with it.
White House fact-checking scores 37.5%
A specious argument is made in the the Obama administration's PDF, 'A Blueprint for Immigration' that "immigrants are job creators" (p. 11). The argument reduces to that "Intel, Google, Yahoo and eBay" were all founded by immigrants, and therefore all US employees of those companies (and other companies allegedly founded by immigrants "between 1990 and 2005") owe their jobs to open immigration policies. Therefore "immigrants are job creators."
There is no indication that the corporation founders included anyone other than immigrants -- no use of the term co-founder.
On investigation, the founders of Intel are Robert Noyce, born in Burlington, Iowa, and, Gordon Moore, born in San Francisco.
0% correct by the White House.
For Google, Larry Page was born in Michigan, and Segey Brin was born in Russia. White House scores 50% for a half-truth, but -25% for failing to tell the whole truth, without so acknowledging.
For Yahoo, Jerry Yang was born in Taiwan, and David Filo was born in Wisconsin. White House scores 50% for a half-truth, but -25% for failing to tell the whole truth, without so acknowledging.
eBay was founded by Pierre Omidyar, who was born in Paris, France. White House finally got one right!
Average truthfulness rating 37.5%
The argument itself is silly, as it ignores key issues, notably full employment. Aside from that, where are the controls? For example, Japan "has the most homogeneous population of any industrialized nation in the world because of the tight control it has had on immigration" (Wikipedia article 'Immigration'), yet Japan has produced many corporate job-producers, businesses and industrial geniuses. Australia overhauled its former liberal immigration policies, exactly because it still has a full employment policy ... and something close to full employment (currently 5.1%).
To give a devil his due, the White House PDF includes other and better presentation of an overall immigration policy, including arguments for eVerify. The real problem is that there is no mention whatsoever of any full employment policy. Sometimes it's what you don't say that reveals the truth.
Seeing 'reasoning' and 'fact-checking' like that in the White House 'A Blueprint for Immigration' , we can readily understand the eminent collapse of Obama's popularity. Obama has been brilliant at playing 'politics as usual' including the usual promise of 'change' ... while actually pursuing a policy attempting to guide the nation toward greater global economic integration even as political globalization disintegrates. But politics as usual isn't the game today, in these times of radical change.
you referring to that "immigrants innovate and start companies"?
It is pure B.S. Andy Grove is from Hungary, but came over as a child. This is true of most of the "immigrant" founders (Google founders also came over as little kids, they are American, de facto), plus they ignore the many failed startups, the hype, the scam and then....my favorite, they ignore many of these so called companies are offshore outsourcing conduit shops.
It's truly obscene. One "study" tried to claim "immigrants" have patents by going through the USPTO and categorizing last names as "foreign looking". I kid you not! As if all of America doesn't have "foreign" sounding names. Gee, you can't be a native born American and have the last name Lin? I don't think so!
If they wanted to really start companies they would have a program to give tax incentives to people with valid business plans and background who are U.S. citizens.
The age discrimination is beyond belief in tech with all sorts of talent laid to waste. Many of these people truly can innovate, are creative. Put them into what's called an incubator with support and have them brain storm, prototype and groom them, give them funding.
A slew of startups and innovation would result.
But that said, these days it's discriminatory against Americans because VCs all want companies to have their offshore outsourcing plan in their first rev. business plan. I kid you not. Before one dime is given, even some Angel investors, they want to make sure that business is going to manufacture in China at minimum and even do R&D in India or abroad, at least part of it.
Very very discriminatory and there is so much talent sitting around in the United States, we truly need a host of something to give funds, incubation support, to people with U.S. citizenship required. I think they should have an unemployed preferred requirement as well.
Think about all of those people 35 years and older who cannot get any job. Many of them have years of experience, management experience, there is a lot of low level executive experience out there too.
Instead, nope, corporate lobbyists are demanding even more $$ goes offshore and they are going to displace even more Americans.
Believe me, there are so many methods to get into the country, Tesla is wooed beyond belief and will not be kept out.
This is another very disgusting lie going on and is all about global labor arbitrage and capital flows to EEs, globalization game.
On the Buffet thing
I've never been able to find the charts, so I figured I'd run the numbers to see what Federal marginal tax rates are when you combine Income, Social Security, and Medicare taxes. Even ignoring the absurd capital gains situation and other loopholes and just assuming that everybody received all their income as wages (and just took the standard deduction and personal exemptions), the rich have a lower Federal marginal tax rate than most middle class single folks and middle to upper class married folks thanks to the Social Security Wage Base and the 10.4% tax break on income above the six figure mark.
Here are the charts:
Highlights (The two income figures assume neither makes more than the wage base):
Marginal Tax rates:
Single Income $43850-$92950: 38.3%
Single Income $92950-$106800: 41.3%
Married w/single income $87700-$106800: 38.3%
Married w/two income $87700-$158050: 38.3%
Married w/two income $158050-213600: 41.3%
Single Income $388500+: 37.9%
Married Income $397850+: 37.9%
These figures include the current payroll tax holiday so add 2% to the figures that are less than the SS Wage Base when those expire:
Single Income $43850-$92950: 40.3%
Single Income $92950-$106800: 43.3%
Married w/single income $87700-$106800: 40.3%
Married w/two income $87700-$158050: 40.3%
Married w/two income $158050-213600: 43.3%
Single Income $388500+: 37.9%
Married Income $397850+: 37.9%
Charts w/o payroll tax holiday:
way to go Scooter!
Yes, they conveniently leave out FICA taxes when calculating the income taxes as if that's all there is.
Also state taxes
State taxes, especially sales tax in some states.
Nonetheless, very good work by Scooter.
Ah, the students.
Robert, I don't know where you live in meatlife...but speaking as a native Rust Belt punk from Hershey Corporation's home state....
I'd say Hershey's did a damn good job of teaching them what life was like in the United States for workers, except for the brief time in the few places where workers successfully organized for a share of the wealth their productivity generated.
Either they'll return to their respective global garden spots feeling superior (and ready to accept what their bosses tell them there), or they'll maybe work on organizing there. Who knows.
The thing is, this is what life is like for grownups all over the world, whether globalized capital is in charge or not. This is what work is like. You don't have to engage in expensive, fossil-energy-intensive schooling related tourism to learn that. You just have to grow up and go into the job market (or vice versa).
But let's face it. Teenagers getting jetted around the world to learn the obvious are probably going to end up in a higher quintile of global income/wealth no matter what they do. If they come into my community expecting a different deal than the locals get, not to mention for things to work out as they dreamed, that's pretty disingenuous. And what were they expecting? That you jet into a place, get your privileges, and jet out ahead of the game AND ahead of all the local workers whose jobs you took?
Sorry, but in this case, I think the corporate structure actually did the world a service. :^D
The fact is that the locals who work at Hershey probably don't have the luxury of walking out and "rallying" in the parking lot. That sort of thing comes easier when mom and dad, or the rich university supporters or taxpayers of your school, are paying for your short term immersion in real life, as part of a schooling scheme intended give you a class leg-up on all the folks in Hershey, PA, who've had nothing but doing shit work all their lives.
In other words, real slave labor can't Twitter and Facebook their experience, climb on a plane at the end of the fixed term of employment, and go somewhere else. These students weren't slaves, they were tourists. And in my view, it's always good when locals place a reality tax on those romantic getaways.
Excellent points, especially how the people who need to speak out the most simply cannot. They are too busy working themselves to death to make rent and sure don't have smart phones with $130/month "plans" to enable them to twitter and facebook when anything is "happening".
More self-destructing by Obama administration
Obama's going to need those politically-aware volunteers at the local level in 2011, but all he seems to be able to do is alienate his core voters. He must calculate that the game is 100% corporate money and corporate media -- or maybe corporate vote counting?
Either that, or he is counting on the GOP to put on a major clown act in 2012.
Or just praying for some kind of miracle.
Or maybe, Obama is like a great general presiding over a strategically necessary slaughter of his own forces, like Stalin's incredible misdirection of the Red Army's defense against the Wehrmacht's onslaught in 1941.
See, currently linked (at EP) New Deal 2.0's On the Obama Administration's Pressuring of NY Attorney General Office -- heavy-duty lifting on behalf of increasing profitability of the financial sector.
With friends like these -- Franklin and Eleanor Roosevelt Institute, good friends of American working families, sponsor of New Deal 2.0 -- Obama hardly needs any enemies.
Congress -- connect the dots?
Congress has gone into August recess, without enacting the three FTAs, despite earlier promise by Speaker Boehner of no recess until FTAs are passed and even though there has been an 'agreement to agree' in the Senate since August 4. (The three bills pending are the Korea, Colombia and Panama FTAs.
That's the good news, as good as it gets these days.
The bad news is that, under the guise of "a shot at passing jobs-creating bills"
Congress will get right back on it after Labor Day, with Boehner continuing his pressure on Obama to push for the FTAs!
COULD THIS FTA HANKY-PANKY BY THE MONEY PARTY POSSIBLY BE CONNECTED TO ANOTHER AUGUST POLITICAL NON-EVENT?
Although Peter DeFazio (widely known as an opponent of fast-track FTAs) is out there working his town meetings in southern Oregon .... according to survey by nonpartisan No Labels organization, 60% of members of Congress are NOT holding August town halls this year. "Members of both parties share the blame with about 67% of Democrats and 50% of Republicans stating that they had no town hall meetings scheduled for the recess period."
CBS News (Stephanie Condon, 23 August 2011), reporting the No Labels survey, also cites CBS News/New York Times poll earlier this month showing all-time high of 82% disapproval of Congress, with just 14% approval. See, CBS News story on poll, 4 August 2011
Could somebody please connect the dots for me? I mean, it's so hard to see
What? A connection between a big push to enact FTAs and congress critturs deciding NOT to hold Town Hall meetings with constituents this August?
Connect the dots, anyone?
FTAs pending ........................................................ NO Town Hall meetings
no one wants these FTAs beyond U.S. Chamber, MNCs
people are speaking out all over the place and everyone should write your representatives too. It's obscene, just another demand from MNCs and that S. Korean one is going to be a disaster for U.S. auto workers.
Panama is beyond belief, there's nothing in it except a "judgment proof" tax haven de facto (I wrote about this recently).
Elected officials could care less what the entire nation thinks of them, that's clear and they use cable noise to deflect what the real issues are.
Not wanting these passed goes across the political spectrum. Huge majority.