Monday, October 31, 2011

The Great Divergence

"The Great Divergence" is the span from 1980 to the present in which the U.S. income distribution has gone haywire. A disproportionate fraction of gains have gone to those at the highest income levels, leaving the rest of us in their dust. What factors contributed to The Great Divergence? Timothy Noah, senior editor of The New Republic, wrote a 10-part series in Slate last year in which he considered all the factors bandied about by economists.

Noah concluded that some potential contributors actually had little or no impact on income divergence. For example, race and gender were eliminated on the grounds that the gaps between men and women and between whites and blacks have not increased. The gender gap actually decreased by 50%. Single-parenthood and the computer revolution were also considered and dismissed.

Panderbear constructed the pie chart using rough percentages assigned by Noah to those factors that did have measurable effect. Immigration putting downward pressure on the wages of unskilled U.S. workers had a modest effect, as did trade with low-wage countries. Dramatic changes in tax policy beginning with President Reagan were judged to have a relatively small impact, because The Great Divergence appears in both pre-tax and after-tax incomes.

Causes of Income Divergence

The decline in labor union membership and consequent loss of political clout was deemed an important contributor to income divergence. Education related failures including decelerating rates of educational attainment and failure of schools to prepare students for the new economy are a major factor. A financial sector grown morbidly obese inventing ever more complex financial instruments of unknowable risk, yet generating huge profits, and the dramatic increase in CEO's salaries and in corporate lobbying of Congress were also major contributors to The Great Divergence.

Which government actions or failures to act aided and abetted these contributors to our historically high income divergence? Coming up.

submit to reddit Share on Tumblr

Friday, October 28, 2011

Class Warfare

Princeton political scientist, Larry Bartels, used data from the Census Bureau Historical Income Tables to shed light on the "Great Divergence" of inflation-corrected income growth across income levels. It turns out that income growth rates are highly correlated with the party of the President. Bartels attributes the first year of each presidency to the previous administration to allow time for changes in White House policies to take effect. The result is the kind of table Panderbear loves, chock full of political illumination.

Income growth rates were higher across all income levels under Democrats than under Republicans. For Democratic presidents income growth was somewhat greater for low income groups than for higher income groups. This pattern was most pronounced during the "Great Compression" that characterized the more egalitarian Great Depression and post-WWII era, when the wealth gap was at a minimum and realization of the American Dream soared. Except for the highest income group, growth rates were lower during Republican administrations, devastatingly so for the lowest income groups.

All Income Groups Do Better Under Democratic Presidents

Every attempt to increase tax rates for the highest income individuals and corporations, reduce the wealth gap, and restore the American Dream is met with the Republican pander that any such effort is class warfare. Panderbear concludes there is strong circumstantial evidence for class warfare in the income data. Namely, Republicans have declared war on all but the wealthiest Americans. And they're winning. One wonders how long such an obvious tilting of the scales in favor of the rich will be allowed to persist before Republicans are held to account at the polls. At least Occupy Wall Street has brought the symptoms of this war to light. As to what specific Republican policies cause the Great Divergence, stay tuned.

submit to reddit Share on Tumblr

Thursday, October 27, 2011

Outrageous Truth

Alan Grayson
Former U.S. Representative Alan Grayson has become a darling of left-wing media and is the devil's little helper according to Fox News and other right-wing propagandists. What did Grayson say to gain such notoriety? Well, mostly the truth.

Using the ratings of Grayson's statements by non-partisan fact-check website Politifact.com yields a gaudy Truth Quotient of 2.57. Panderbear doesn't include Grayson in the regular Truth Quotient rankings. If added his TQ would be off the chart, the highest that Panderbear has calculated for any politico. He would easily eclipse all the congressional leaders of both parties, all candidates for the Republican nomination, even the current individual TQ champ, President Obama.

So what were some of Grayson's statements that prompted conservatives to set their hair on fire? Well, he said 24 million people in this country "can't find a full-time job," 50 million "can't see a doctor when they're sick," 47 million people need government help to feed themselves and 15 million families owe more than the value of their home. These are all true statements that pundits and panderers on the right don't want to talk about unless they're blaming them on President Obama. Congressional Republicans have voted overwhelmingly, usually unanimously, against every effort by the President and Democrats to address these issues constructively.

In another "incendiary" statement Grayson said, "According to Wikipedia, there are only five countries in the entire planet that are more unequal than the United States in the distribution of our wealth." (It's 3-5 depending on the date of the statistics.) Conservatives don't see a problem with that, but Panderbear does, Occupy Wall Street does, and Alan Grayson does.

One last Grayson zinger for the road, "The Republican plan for tax cuts is to give each millionaire -- the top 1 percent of income in this country -- $83,347 a year in tax cuts." Politifact.com's verdict? TRUE.

When Panderbear was a cub there was a name for people who said the things Alan Grayson is saying now, "Democrats." As comedian Bill Maher put it, "Democrats have moved to the right and the right has moved to a mental hospital."

submit to reddit Share on Tumblr

Wednesday, October 26, 2011

Vatican Supports Occupy Goals

Vatican's Pontifical Council for Justice and Peace Support OWS Goals
On October 24 the Vatican's Pontifical Council for Justice and Peace released a document blaming the world's economic troubles on "economic liberalism that spurns rules and controls" directly contravening decades of conservative political dogma requiring ever more deregulation and lower corporate taxes. The Council finds fallacious the notion that “what is useful for the individual leads to the good of the community” (an indictment of trickle-down economics) and calls instead for “a spirit of solidarity that transcends personal utility.” This declaration puts the Vatican in fair alignment with the Occupy movement. It also puts Panderbear in the awkward position of agreeing with the Vatican for perhaps the first time in his life.

Panderbear hardly need point out that fictitious persons, ie. corporations, cannot possibly "transcend personal utility." Nothing in the charter or nature of a corporation admits of anything other than the goal of producing profits for shareholders, not to mention lining the pockets of corporate officers. Maximizing a corporation's personal utility means maximizing profits. If that requires buying, er, lobbying pandering politicians for fewer regulations and more favorable tax treatment, then that's what a corporation will do. Corporations aren't evil any more than a gun is evil. They are tools that we must wield with care. Corporations can only transcend the profit motive if external constraints, regulations and taxes, require them to do so.

Raw capitalism has sharp elbows. The Vatican has avoided a mistake that many on the political right make - accepting the infallibility of capitalism and the free market as an article of faith. As with any religion there is no scientific evidence to support the view that unregulated free markets are inherently benevolent. Without controls corporations become the monopolistic trusts that President Teddy Roosevelt famously busted. We've been down this road. We performed this experiment a hundred years ago and found that under-regulation and under-taxation of corporations leads to concentration of wealth, degradation of the environment, economic boom-and-bust, and social instability. Been there. Done that. Amen.

submit to reddit Share on Tumblr

Tuesday, October 25, 2011

Wealth Gap

Panderbear will address the broader, often pandered issue of "American Exceptionalism" sometime in the near future, but for now will confine himself to one particular respect in which the United States is undeniably exceptional - its wealth gap. Data for the chart comes from a 2006 study by the United Nations University World Institute for Development Economics Research (UNU-WIDER). The plot displays the Gini coefficient of wealth distribution for each of 228 countries.

The Gini coefficient is a measure of the inequality of a distribution. A higher Gini coefficient indicates a more unequal distribution. In the case of wealth, if one person in a country owned everything its Gini coefficient would be 1. If everyone in a country had the same net worth then its Gini coefficient would be 0. Wikipedia has an extensive explanation of the Gini coefficient, but you may need to brush up on your integral calculus and discrete probability functions.

In 2006 the United States had the 4th highest Gini coefficient for wealth distribution in the world. In terms of its exceptionally large wealth gap, the United States keeps the company of countries like Namibia, Zimbabwe, and Libya. Other developed economies like the United Kingdom and Germany have much lower Gini coefficients somewhere near the world mean. Japan and China have the most equal distributions of wealth in the world.

The fact that these latter countries, especially China, have gained and sustain competitiveness in the global economy, suggests that economic success does not require significant wealth inequality, conservative pandering about pampering job-creators notwithstanding. Furthermore, there is considerable evidence that a large wealth gap can lead to economic and social instability. Fodder for a future post.

Wealth Gap in U.S. One of the Highest in the World

submit to reddit Share on Tumblr

Monday, October 24, 2011

We Are The 1%

Occupy Wall Street activists carry signs saying, "We are the 99%." The point is the top 1% of the income spectrum is subject to a fundamentally different set of rules than the rest of us. The 1% now enjoy far more favorable tax treatment and net income outcomes than at any time since immediately preceding the Great Depression. While everyone else is struggling through the effects of wage stagnation and the Great Recession, the economic elite have had smooth sailing, building both incomes and wealth. The chart shows what currently prevails isn't your father's income distribution; it's your great-grandfather's distribution.


Panderbear is aware that correlation is not proof of causation. Nevertheless, the last time this country had a similarly skewed income distribution, things did not turn out well. Financial market collapse followed unbridled speculation and presaged a protracted period of economic and social strife during which socialism and even communism enjoyed considerable followings.

Post-WWII America was characterized by a more egalitarian income distribution and overall prosperity. The American Dream was alive and well. Construction of the interstate highway system, the first manned Moon landing, and other successes engendered relatively positive attitudes toward government. It was this time of optimism, progressiveness, and trust in government in which Panderbear grew up.

All that changed dramatically following the 1980 election of Republican President Ronald Reagan, panderer extraordinaire. Ignoring both sound economics and arithmetic, Reagan pushed through Congress, with the assent of feckless congressional Democrats, massive tax cuts flattening previously more progressive income tax rates. What followed was an historic 3-decade upsurge in the incomes of and concentration of wealth in the top 1% at the expense of the middle class.

In a reprise of the 1920's and 1930's we've experienced boom and bust - speculative financial and real estate bubbles, Great Recession, Tea Party insurrection, and now Occupy Wall Street. If we ignore history and continue to compound our woes with regressive tax rates, corporate deregulation, anti-labor policies, and under-taxation of both corporations and the wealthy, we will not soon see again the optimistic America Pandercub knew.

submit to reddit Share on Tumblr

Friday, October 21, 2011

Corporate Tax Dodgers

In one of the great panders of the 21st century, Republicans have been grousing about the 47% of U.S. households that paid no federal income tax. They argue these mostly middle class families are not paying their fair share. Making these slackers contribute something to government revenues would make a big dent in the deficit, they say. They also continue to harp on their timeworn meme of high corporate taxes putting American business at a competitive disadvantage in the global economy.

In a demonstration of Panderbear's principle that one chart is worth a thousand panders the following graphic puts the lie to both aforementioned panders. It displays the percent of government receipts coming from the three main sources - individual income taxes, corporate income taxes, and payroll taxes. The data presented comes from the Budget of the United States Government: Historical Tables Fiscal Year 2008 Section II Table 2.2. The chart includes data from 1947 on. Why 1947? Because that's the year Panderbear was born. That's right, Panderbear is a Baby Boomer.

Over these six decades three trends are apparent: individual income taxes as a percent of government revenues have remained stable at 40-50%; corporate income taxes have represented an ever shrinking fraction of receipts; payroll taxes as a percent of revenues have grown enormously. The Republican pander conveniently ignores all of these facts. This one chart demolishes both "The 47% Solution" (tax the middle class more) and the "corporate taxes are too high" narrative. Regardless of the nominal income tax rates on individuals and corporations, the historical trends in actual government receipts shows the middle class picking up the tab for the real slackers, tax dodging corporations.

U.S. Corporations Are Income Tax Slackers

submit to reddit Share on Tumblr

Thursday, October 20, 2011

Truth Quotient Rankings - Politicos

You can tell the Republican nomination race is heating up just by watching the TQ ratings of the contenders. They're headed south. Mitt Romney, who only scant weeks ago sported an enviable TQ nearly the equal of President Obama's, has skidded to a score of 1.0. Flip a coin. Improbably, that puts him in a 3-way tie with both Vice-president Joe Biden and Vermont Senator Bernie Sanders.

In another statistical fluke the Democratic National Committee maintains a relatively lofty TQ of 2.5 while the Republican National Committee's rating would have to increase by a factor of 2.5 just to escape panderer territory.

Rick Santorum, Michele Bachmann, and Herman Cain continue their race to the bottom. Cain pulled out all the stops, compiling a series of falsehoods sufficient to wrest sole possession of last place in the TQ standings from Michele Bachmann. Incredible. If he keeps up this pace Cain could give chain emails a run for their money.

Wednesday, October 19, 2011

Tea Party vs Occupy Wall Street - Part III

OWS Goes Global
The Tea Party is a uniquely American phenomenon, while Occupy Wall Street has gone global in its first month. Why the difference in scope of these movements' appeal? The U.S. is not unique in having a viable conservative movement. Conservatives are in power in many countries around the world where Tea Party equivalents have not gained traction. Nor are Americans unique in their degree of exposure to overtly partisan "news" purveyors and a polarized blogosphere. Panderbear entertains the conceit that Occupy Wall Street has gone global because its cause is universal and just and its diagnosis of the source of our ills, corporate personhood, is accurate, whereas the Tea Party remains trapped in the futile conservative game of blame the victims. Unfortunately, that is likely a far too rational theory to explain the real world difference in the two movements' scope.

The U.S. differs from most of the world's largest democracies in one important respect. Unlike parliamentary democracies where the executive leader is chosen by the party winning a plurality in the national legislature, American voters have the dubious power to choose divided government. Frequently, that choice leads to governmental paralysis. Filibuster in the U.S. Senate compounds the problem. Originally intended to be used sparingly to protect the minority from tyranny of the majority, filibuster has become a means for a determined and uncompromising minority to routinely foil legitimate efforts supported by a majority of Congress and the American people. Parliamentary democracies may spin their wheels going first this way then that depending on the latest election results, but they are not subject to the kind and degree of failure to act demonstrated by the current U.S. Congress. Timely action, even if slightly misdirected, is often better than no action at all.

The Occupy Wall Street phenomenon has burned with greater intensity and on a wider stage than the Tea Party. That does not imply it will last longer. The brightest stars in the sky are the shortest lived. Whether Occupy Wall Street becomes a lasting movement with tangible progress toward its goals remains to be seen. Its appeal is wide, but its depth is uncertain. Nevertheless, Panderbear is an optimist and thinks that even if the current wave of demonstrations subsides, the fundamental truth of its participants' ideals will persist and rise again and again until freedom from corporate tyranny is won. The history of Western Civilization is one of ever increasing individual liberty. In the end the momentum of that multi-millenium trend will be telling.

submit to reddit Share on Tumblr

Tuesday, October 18, 2011

Tea Party vs Occupy Wall Street - Part II

Frederick Douglass
While the Tea Party has a natural ally and source of leaders in the Republican Party, Occupy Wall Street so far lacks similar assets. Perhaps these will come in time. President Obama may decide to front-run the movement or try to turn it to his purposes. Democrats, especially congressional leaders, have been slow to embrace Occupy Wall Street. The Democrats' reticence is not surprising given their dependency on corporate donations for reelection campaigns. And perhaps the name "Occupy Wall Street" is too militant sounding for Democrats' milquetoast tastes, though militancy, far from hampering the Tea Party, has been a boon. Naive political purity tests and anti-democratic unwillingness to compromise for the common good are hallmarks of the Tea Party. These attributes have contributed mightily to its impact and to congressional gridlock which suits Tea Party purposes just fine.

Occupy Wall Street's challenge is the greater for requiring positive action rather than stalemate. Occupy Wall Street activists have correctly identified corporate personhood and all that flows from that corrupting notion as a root cause of our most pressing economic and political problems. Our increasingly corporatist economy, characterized by historically low and flat tax rates, market instability, and capital friendly, labor hostile public policies, has crushed the middle class. Beginning with the Reagan administration trillions of dollars of wealth have been transferred from the middle class to the already rich. The wealth gap has grown to pre-Great Depression dimensions, a recipe for economic holocaust and social instability.

Occupy Wall Street is up against the ultimate adversary. Corporate America has unlimited funds, hordes of lobbyists for every Congressman, and a cooperative and activist conservative 5-4 majority on the U.S. Supreme Court. Ultimately, statutory law may be inadequate to the task of taming runaway corporate power and greed. A constitutional amendment may be required to drive a stake through the heart of corporate personhood, no mean feat. Occupy Wall Street must acquire big time political sponsorship and leadership or their movement will sputter and die. If activists fail to turn their outrage and enthusiasm into political power their movement will accomplish little. Being right is not enough. It never is. As escaped slave and leader of the abolitionist movement Frederick Douglass said, "Power concedes nothing without a demand. It never did. It never will."

submit to reddit Share on Tumblr

Monday, October 17, 2011

Tea Party vs Occupy Wall Street

OWS on Corporate Personhood
Superficially, the boisterous beginnings of both Tea Party and Occupy Wall Street appear similar, the former on the political right, the latter on the left. People in both groups believe this country has lost its way and they're damned angry about it. Both groups believe our government has been ineffective in addressing, if not complicit in, problems facing the nation. That's pretty much where the similarities end.

With their conservative instincts the Tea Party has unerringly misidentified the enemy. Our foe is not Big Government, over-taxation, over-regulation, or disregard for this country's founding principles and constitution. Our problems are not due to hordes of illegal immigrants taking our jobs and sending their kids to public schools. Nor are our difficulties the fault of senior citizens living high on the hog with Social Security, Medicare, and Medicaid or lazy parasites collecting unemployment and welfare while paying nothing in taxes. The enemy isn't any of the traditional conservative movement bogeymen.

The woman with the sign suggests Occupy Wall Street activists are on the right track when it comes to identifying the real problems we face and the root causes. The rise of corporate personhood with its attendant attribution to corporations of rights formerly the sole provence of natural citizens is the ultimate culprit for many present day woes, including dysfunctional government and the growing wealth gap. The primary purpose of a corporation is the accumulation of capital for enterprises beyond the means of individuals. Without adequate regulation, not to mention appropriate taxation, corporations naturally tend toward monopoly, concentration of wealth, and undue influence over media, public policy, legislation, and elections. Corporations are reporting all-time high profits while unemployment is high and inflation adjusted wages have stagnated for decades. America is corporatist heaven.

As we saw with the collapse leading to the Great Recession, inadequately restrained corporatist economies produce highly leveraged, dangerously bloated and unstable financial sectors. When they inevitably implode it isn't wealthy CEO's and hedge fund managers that pay the price; it's the middle class that takes the hit in unemployment and lost value of their largest assets, their homes and retirement accounts. A corporation's charter is to make money, not to look out for the public's interests; that is government's job and that's where our government has failed us. We have a right and a patriotic duty to be mad as hell.

submit to reddit Share on Tumblr

Friday, October 14, 2011

Starve the Beast - Part II

Starve the Beast
Nobel Prize winning economist Paul Krugman described the conservative "starve the beast" fiscal political strategy in 2010, "Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government’s fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit ... Republicans insist that the deficit must be eliminated, but they’re not willing either to raise taxes or to support cuts in any major government programs. And they’re not willing to participate in serious bipartisan discussions, either, because that might force them to explain their plan — and there isn’t any plan, except to regain power." Panderbear thinks Krugman has it about right.

Panderbear also thinks the leader of the constitutional convention and first Secretary of the Treasury, Alexander Hamilton, had it about right in Federalist Paper No. 15,  "A government ought to contain in itself every power requisite to the full accomplishment of the objects committed to its care, and to the complete execution of the trusts for which it is responsible, free from every other control but a regard to the public good and to the sense of the people." This statement suggests the starve the beast strategy puts the cart before the horse. It is necessary to decide the scope of services we want from our government, before deciding what powers, including taxation, it should have and to what extent it should exercise them.

No one wants a government bigger than necessary. Bumper-sticker conservative political slogans about small government are pure pandering. Having decided what tasks we require of our government we must then fund it exactly enough to accomplish those tasks. No more and no less.

submit to reddit Share on Tumblr

Thursday, October 13, 2011

Starve the Beast

During the 1980 Presidential debates candidate Ronald Reagan said, "John Anderson tells us that first we've got to reduce spending before we can reduce taxes. Well, if you've got a kid that's extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker." This folksy analogy presaged the conservative fiscal political strategy known as "starving the beast." Starving the beast involves cutting taxes and consequently government revenues to deliberately create a budget crisis. The theory is the crisis will force spending to be reduced. Conservative activist Grover Norquist said, "My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."

History has shown just how dangerous a faulty analogy can be. Your kid cannot print money; the U.S. Treasury can. Your kid cannot borrow money from China; the U.S. Government can. Instead of reducing spending, starving the beast resulted in ever increasing budget deficits. Cutting taxes is always popular; cutting government benefits, not so much. In a move reminiscent of the Sorcerer's Apprentice President Reagan realized during his second term that things were getting out of hand and agreed to a series of tax increases. But it was too late. The era of fiscal magical thinking in the conservative movement and the American public had begun. In every election cycle since Republicans have pandered to voters singing the same seductive refrain, "Cut Taxes!" while remaining silent on exactly which programs to cut.

submit to reddit Share on Tumblr

Wednesday, October 12, 2011

Corporate Welfare

Corporate Welfare
Large corporations pollute our air, water, and soil. They pay CEO's millions and distribute billions in profits to stockholders. Who gets the bill for cleaning up the environmental mess left behind? American taxpayers. This is tantamount to a government subsidy for big business. Panderbear thinks this corporate welfare should stop. It's only fair that polluters be required to clean up after themselves.

The cap-and-trade system proposed by President Obama was designed to do just that. The proposal was shot down by pandering anti-tax Republicans and their Big Oil allies even though it did not represent a net new tax. It would have shifted taxes from the middle class to companies that pollute. Those who create these problems must be held responsible for fixing them. Any company that cannot turn a profit without being forever subsidized by taxpayers should be incentivized to look for a new business model.

Opponents of reform say it would cause energy and other prices to increase. They are only partly correct. Prices on items whose production and use pollute the environment, contribute to global warming, and ultimately threaten our economic security, would and should increase. Creating economic incentives that encourage cleaner technologies and industries is the whole point of cap-and-trade and carbon tax proposals. However, these market-based approaches to pollution control would reduce pollution requiring public-funded remediation. We would, in effect, get a tax break offsetting price increases. By reducing our dependence on foreign oil, pollution control measures would also increase our national and economic security, have a salutary effect on global warming, and just might save our planet.

submit to reddit Share on Tumblr

Tuesday, October 11, 2011

Voter Fraud

Eeeeek! A Fraud!
Like alien abductions anecdotal reports of voter fraud abound while evidence to support these claims is lacking. An analysis of 250 allegations of fraud, conducted by the Brennan Center of Justice, New York University Law School, found Indiana's proposed photo ID requirements would not have prevented a single fraudulent vote. None. Zero. Nada. Voter fraud is a fraud, a myth.

Nevertheless, conservatives continue to spew unproven claims, present opinion as fact, make unsupported inferences, and deliberately conflate voter fraud with vote fraud. A TPMMuckracker article recounts an enlightening exchange between Senator Al Franken and leading voter fraud mythologist, Hans von Spakovsky.

There is ample evidence of vote fraud in the form of convictions for ballot box stuffing, reporting false counts, and discarding legally cast ballots. These isolated instances of criminal behavior are not at all the pervasive illegal voting by non-citizens that conservatives trumpet in pandering to paranoid low-information voters. 

What's going on here? Voter fraud is essentially non-existent, yet Republican-controlled legislatures across the country are pushing more restrictive photo identification rules into law. The Brennan Center noted such laws, "could well disenfranchise legitimate voters." Indeed, in an Indiana primary, a dozen elderly nuns were prevented from voting, because they lacked acceptable ID.

What's going on is a cynical political calculation by the Republican Party. Restrictive voting laws reduce election turnout, especially among the poor, minorities, and students, who are less likely to have a driver's license. These groups traditionally vote more heavily Democratic. Republicans are trying to win elections by suppressing Democratic votes. The GOP apparently puts lust for political power ahead of respect for democracy and the U.S. Constitution.

submit to reddit Share on Tumblr

Monday, October 10, 2011

Truth Quotient Rankings - Politicos

In the only recent change of TQ ranking Senate Majority Leader Harry Reid leapfrogged Sarah Palin by virtue of a single slightly-more-true-than-not statement. Reid is, however, in no danger of escaping Panderers Row anytime soon. That would require a truly unprecedented string of true or mostly true statements.

The big news is the addition of Senator Bernie Sanders of Vermont to the rankings. Sanders debuts with a respectable TQ of 1.00, which means, unlike most politicians, his statements are as good a predictor of the truth as a coin flip. Like Ron Paul, Bernie has a habit of making insightful and sometimes outrageous statements that often as not turn out to be true. As the first avowed socialist in the U.S. Senate, Bernie Sanders brings a refreshingly different perspective to the American political scene. To the consternation of conservatives everywhere Vermont voters' heads did not explode at the thought of electing a democratic socialist to political office. He has served Vermont as mayor of Burlington, U.S. Representative for 8 terms, and since 2006 U.S. Senator. Even more vexing for conservatives, Vermont does not seem to have suffered any detectable damage from its scary flirtation with demon socialism.


Friday, October 7, 2011

Sarah Palin Not Running

Sarah Palin
Former Alaska Governor, Sarah Palin, says she will not run for president. This announcement may have surprised some political pundits, but Panderbear predicted months ago, to Mrs. Bear, that the camp-following Palin would milk the celebrity accorded potential presidential candidates for all it was worth before declining to run.

To understand and predict Sarah Palin's actions is not all that difficult. Follow the money. Halfway through her term as governor of Alaska, demi-governor Palin resigned. Why? The governor's salary paled in comparison to the seven-figure book deal she nabbed and the prospect of future riches.

But how to maintain the cash-cow of public celebrity? What better way than a faux campaign for the Republican nomination for president? Actually running for office is a cash-burning strategy. That's not what Sarah Palin is about. Having to answer gotcha questions like "What do you read?" isn't on her menu either. Celebrity, notoriety, and most especially money, are. Money is Palin's Blue Plate special, her raison d'ĂȘtre.

Sarah Palin has sacrificed both friends and family on the altar of ambition. The tale of her rise to the governorship of Alaska is a sordid one. But, for reasons that even she may not understand, Palin's real ambition is wealth, her driving force avarice.

submit to reddit Share on Tumblr

Thursday, October 6, 2011

Steve Jobs

Steve Jobs
Panderbear composes his missives on an Apple MacBook Pro, or an iPad, or an iPhone. Once written blog posts travel over an Airport Extreme network to the internet. While pursuing his birding passion in Ecuador recently, Panderbear recorded his sightings using an iPhone app. Upon returning home he transferred his sightings to a Numbers spreadsheet and the contents of his camera to iPhoto. Not a day passes that he doesn't spend hours enjoying the minor miracles of Apple hardware and software.

Apparently Steve Jobs had a few rough edges. What man of genius and passion does not? In the Bear family Jobs will be remembered for three decades of joy, fun, surprise, and wonder at his creativity and insight and for turning a nearly bankrupt Apple into the world's number one technology company. We cheered for Steve Jobs and Apple every step of the way. His life was an amazing story. His passing diminishes our universe.

Wednesday, October 5, 2011

Where the Money Is

When asked why he robbed banks, Willie Sutton famously replied, "because that's where the money is." Panderbear is loathe to equate taxation with robbery, but the fundamental truth in Slick Willie's statement is undeniably apt when it comes to looking for sources of federal tax revenue.

Where the Money Is

As the accompanying chart demonstrates it's no good looking for additional revenue among low income tax payers. Taxing these folks at a 50% rate would devastate the middle class, lead to the mother of all tax revolts, and still would only raise half a trillion dollars a year.

However, following Willie's maxim and taxing the top 1% at the same 50% rate would raise ~$850 billion a year and leave those wealthy tax payers only slightly less rich. Rates representing penal taxation of lower income individuals barely ruffle the gilded feathers of the rich.

Panderbear previously addressed the fairness issue and the intentions of Founding Fathers regarding the distribution of the tax burden. The Founding Fathers expected and fairness demands higher tax rates for the wealthy than for the less privileged. Add to those the most obvious reason of all. That's where the money is.

submit to reddit Share on Tumblr

Tuesday, October 4, 2011

Tortured Values

Does Torture Work?
Does torture work? Does torturing enemies increase our national security? According to the U.S. military the answer is no. The military opposes "enhanced interrogation techniques," because our use of torture aids al Qaeda recruitment, erodes support among our allies, and is less effective than traditional interrogation. Those who apply "enhanced" techniques admit that traditional interrogation yields more reliable intelligence. The tortured say whatever makes the torture stop. Usually that has little relation to truth. During the Bush administration there was not one documented instance of torture saving American lives, pandering to the contrary then and since notwithstanding.

Is waterboarding torture? Following WWII the United States convicted Japanese officer, Yukio Asano, of war crimes for waterboarding a U.S. civilian. Asano was sentenced to 15 years of hard labor. If waterboarding is torture and a war crime when our enemies employ it, isn't it the same when we use it?

Often overlooked is the demoralizing and dehumanizing effect torture has on the torturer. The U.S. Constitution promises freedom from "cruel and unusual punishment." What claim have we to moral superiority when we deny prisoners that same fundamental human right? How are we better than our enemies when we engage in their barbaric, inhumane behavior? How can a commander-in-chief or a nation ask its warriors to perpetrate such morally dubious acts?

Use of torture not only violates our international agreements, it is contrary to our basic values as Americans. If in time of threat we torture our enemies, are we not already defeated? Are we not lost when we willingly sacrifice the core values that define us? I think hope we're better than that.

submit to reddit Share on Tumblr

Monday, October 3, 2011

Corporate Personhood

Corporate Personhood
If you think the U.S. Supreme Court is the last great bulwark against partisan politics, think again. An inordinate fraction of all decisions by the present court are decided by the same 5-4 margin, the 5 activist conservative justices versus the remaining 4. This was the case in Citizens United v. Federal Election Commission when the Court ended most limitations on corporate involvement in politics, sinking the McCain-Feingold Campaign Reform Act and threatening both our democracy and our national security.

Because corporate entities have virtually unlimited resources, they can influence public opinion and affect outcomes of elections far more than corporeal beings. Even more troubling, we face the perilous prospect of foreign-controlled corporations manipulating U.S. domestic and foreign policy to our detriment.

Federal courts have promulgated two notions foreign to the signatories of the U.S. Constitution and toxic to true democracy – "corporate personhood" and "money-speech equivalence." These two doctrines have enabled corporate entities and their lobbyists to effectively seize control of our government. The doctrine of corporate personhood subverts what was intended as a citizen’s right to freedom of speech by its extension to corporate entities. Corporations are neither people nor citizens. They cannot vote. They cannot run for office. In fact they cannot speak except through the expenditure of money. The doctrine of money-speech equivalence ensures the rich, whether individuals or corporations, can exercise greater political power than the average citizen. This state of affairs is antithetical to democracy.

Given Supreme Court rulings on corporate personhood, statutory law cannot restore government by and for the people. The dual doctrines of corporate personhood and money-speech equivalence must be utterly abolished via constitutional amendment. Nothing less than the survival of our republic is at stake.

submit to reddit Share on Tumblr

Sunday, October 2, 2011

Great Conservative Accomplishments

Slavery
Conservatives seem never to tire of being on the wrong side of history. Hubris leads conservatives, in one of the great panders of American politics, to claim the Founding Fathers as their own, but those icons of American history were revolutionaries, treasonously so according to conservative supporters of King George. 19th century conservatives fought the Civil War in an attempt to maintain a slavery-based economic system. President Hoover's conservative, laissez-faire economic policies led directly to the Great Depression. Similar policies, starting with President Reagan and culminating with the hapless George W. Bush, likewise, and with painful predictability, presaged the recent Great Recession.

Great Depression
Social Security, Medicare, child-labor laws, integration of the military and of public schools, the Civil Rights Act of 1964, the Voting Rights Act of 1965, and healthcare reform are all victories for America bitterly opposed by conservatives pandering to their backward constituents. Quick! Name 3 great accomplishments of conservatives in all of U.S. history. Give up?

The verdict of history is clear. Political conservatism, born of the fear of change, is unerringly wrong-headed. Our nation's greatness arises from a willingness to embrace the challenges of the day and to lead the world in effectively addressing issues of social and economic justice. That is the true legacy of our Founding Fathers. As always, that legacy is under attack by foot-dragging conservatives whose backward-looking policies are a prescription for ceding moral and economic leadership in the 21st century.

submit to reddit Share on Tumblr

Saturday, October 1, 2011

Tax Rates Chart

Panderbear just loves charts. They'd be the perfect antidote for low-information voters if they weren't so determined to stay low-information. Sigh. This chart shows the history of top marginal tax rates from 1916 through 2010.

Note that personal income, corporate income, and capital gains are taxed at different rates. Generally, capital gains are taxed at the lowest rate, corporate profits at an intermediate rate, and personal income at the highest rate of all.

Tax Rates History
(Click for larger chart.)

The income of the rich often consists mostly or entirely of capital gains which are currently taxed at a modest 15%. You are likely paying a much higher rate than that on your last dollar of income, especially if you include Social Security and Medicare, i.e. payroll taxes. As billionaire Warren Buffett is fond of pointing out he pays a lower tax rate than his cleaning lady. Buffett goes on to say the wealthy have never had it so good. He should know.

At present corporate and individual rates are nominally equal. However, with their ability to shift profits offshore and convert profits into capital gains, corporations actually pay much lower rates. Many corporate giants like General Electric use this strategy so well that some years their profits are in the billions of dollars and yet they pay no federal income tax at all. Zero.

There is much more to glean from this chart, but for now Panderbear will just point out that all three tax rates are far below their post-depression averages. This puts the lie to the Republican and Tea Party meme that taxes are too high. Panderbear has some sympathy for the notion that the middle class is overtaxed, but conservatives do not favor tax cuts targeted at the middle class. The Bush tax cuts went mostly to "job creators," aka the wealthy. Unfortunately, the widening wealth gap and high unemployment suggest that rather than creating jobs, they just put the money in their pockets.

submit to reddit Share on Tumblr