Best Politicians Money Can Buy!

The newly elected gov of Florida, Rick Scott, a mega millionaire, spent $73 million of his own money on the election. In 2009, on an income of $7.87 million, Scott paid Federal taxes at a 13 percent rate, much less than the rest of us. Of course, he wants to continue the tax breaks for the rich.

Why do we let our government do this? Don't tell me that these fat cats create jobs for the rest of us poor slobs.

Bonuses on Wall Street

Bonuses on Wall Street are not likely to be up much from last year, though they will still be strong. Over all, Goldman, Morgan Stanley, Citigroup, Bank of America and JPMorgan Chase have set aside $89.54 billion this year to pay employees, 2.8 percent less than a year ago, according to data from Nomura.

Total revenue for the five firms, meanwhile, has fallen about 4 percent this year. A study by the influential compensation expert Alan Johnson says broadly that bonuses will be up 5 percent this year across all financial services companies, with employees in some businesses like asset management getting increases of 15 percent.
This is a far cry from 2007, when some firms on Wall Street set records for compensation payouts. That year Goldman Sachs set aside $20.19 billion in compensation and benefits; in 2008, it set aside just half of that amount, $10.93 billion for pay. In 2009, that number climbed to $16.19 billion. These guys were royally rewarded for creating a financial crisis that most other people suffered from.

In the years leading up to the credit crisis some executives became famous for their expenditures, like L. Dennis Kozlowski, the ex-chief executive of Tyco International whose $6,000 shower curtain became a symbol of unnecessary extravagance.

I repeat, and the new Congress wants to extend tax cuts to these people!

Tidbits & Outrages

Profits Soar, Employment lags
(items gleaned from the New York Times)
The nation’s workers may be struggling, but American companies just had their best quarter ever.
American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms.

Return of Conspicuous Consumption
But when it comes to personal indulgences, there are signs that the wallets are beginning to open up. Traders and executives say that jobs seem much more secure. Businesses whose fortunes ebb and flow with the financial markets are thriving again.
“Wall Street is back spending as much if not more than before,” said the New York cosmetic surgeon Dr. Francesca J. Fusco, whose business is booming again after a difficult few years.
Christie’s auction house says investors from the financial world who fell out of the bidding market during the 2008 credit crisis are “pouring” back in.
Expensive restaurants report a pickup in bookings. At the Porter House restaurant in the Time Warner Center across from Central Park, the head chef, Michael Lomonaco, says business is up about 10 percent over a year ago and “people are starting to shake off what happened.” The restaurant is a favorite of A-list Wall Street executives, including Goldman Sachs’s chief executive, Lloyd C. Blankfein.
Real estate agents say Wall Street executives have already begun lining up rentals in the Hamptons for next summer. Dolly Lenz of Prudential Douglas Elliman said the bidding this year was “hotter and heavier” than previous years. “There is a passion now in the market I haven’t seen in a while,” she said.
She said her clients, almost exclusively from Wall Street, were afraid to lose out. Just recently, Ms. Lenz said, she had three people bidding more than $400,000 for a summer rental in Southampton.
And the new Congress wants to extend tax cuts of these people!

Justice

"Tom DeLay, one of the most powerful and divisive Republican lawmakers ever to come out of Texas, was convicted Wednesday of money-laundering charges in a state trial, five years after his indictment here forced him to resign as majority leader in the House of Representatives." New York Times, Nov. 24, 2010.

I hope that all members of Congress take this to heart; even the most powerful must obey the law. The prosecution chose to accuse him of money-laundering, but he also broke Texas law prohibiting corporations from giving to political candidates. DeLay's tactics resulted in enough law makers to redraw Texas Congressional districts in favor of the Republicans.

Terrorism

There is only one way to reduce terrorist attacks in the US, and it is not more elaborate airport security. We must stop our own terrorist attacks in Afghanistan. As long as we are occupying the country, we will inspire never-ending hatred that creates martyrs.

State Spending and Employment Falls

While the Federal stimulus funds are trying to save and create jobs, they can't keep up with the decline in spending and public jobs. For example:

"The Great Recession of 2008 and 2009 decimated (Michigan)school revenues. State taxes, adjusted for tax restructuring, fell 8.6 percent from FY2008 to FY2009 compared to an income drop of 3.0 percent and inflation of -0.3 percent.
The Great Recession of 2008 decimated state tax revenues from all sources, causing actual year-overyear declines in FY2009 and FY2010." Source:Citizens Research Council.

The State of Michigan, to help solve its looming budget crisis, offered generous early retirement to its employees. 4,755 employees out of a total of 53,000 state employees took the early retirement. The problem will deepen next year if Congress fails to extend stimulus spending, which the Republican house has pledged to do.
Across the country, when many voters said the stimulus did no good, the problem was it never was of a size to offset the decline in state and local budgets and employment occasioned by declines in the state income tax and local property tax (related to the decline in real estate values).

Fed to Buy Treasury Bonds

The Federal Reserve Bank is going to buy many of the Treasury bonds to be issued in the coming months. Good idea. Now the government will be paying the interest to itself. This is the same as zero-interest public debt that I have been advocating.
Now if the Congress would vote a healthy increase in stimulus spending and finance it this way, we might see the end of the recession.

Larry Beinhart writing in The Huffington Post shows that a big chunk of the stimulus went for tax breaks (a poor way to increase jobs he says, especially breaks for the rich). http://www.huffingtonpost.com/larry-beinhart/why-the-stimulus-package_b_781206.html?view=print