Great Minds

All right, so mine’s not so great as Hilzoy’s, but we were thinking alike. Here’s me on the Wall Street wonders last night:

They need to put down the champagne and pick up some history books. I’d advise them to start with the French Revolution. Specifically, what happened to the “let them eat cake” crowd.

Here’s Hilzoy on the Wall Street wonders who’re whining about people wanting to take their outrageously enormous bonuses away:

As someone who thinks that levels of compensation in the US are absurdly unequal, and that this is bad for the country, it’s tempting to say: oh, go ahead, you idiots. Keep your sense of entitlement to other people’s money. Make people come after you with pikes and tumbrils. See if I care.

Ha. HA! I’m not the only one thinking French Revolution.

And Hilzoy and I aren’t the only ones with visions of violence:

Something about the AIG story is bringing out strange reactions. Chuck Grassley:

“In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.” (…)

And no, none of us really want to see the Wall Street robber barons bleeding in the streets. Much. But when someone’s robbed you blind, then demanded you pay them for the privilege, it’s pretty hard not to think of things like tumbrels and hari kiri, even though you’d be horrified if those things actually came to pass.

But this is one other good thing about AIG’s outrageous behavior: it allowed a Republican to get off a cutting one-liner that absolutely delighted me. I agree with Sen. Grassley without reservation on that point.

Now if you’ll excuse me, I need to go have a lie-down after such a shock.

Great Minds

Outrageous Fatcats

Someone needs to hit these people with an industrial-strength clue-by-four:

From the WSJ:

“American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG’s collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.

Chief Executive Edward Liddy told Treasury Secretary Timothy Geithner in a letter dated Saturday that the next payments to employees of the financial products unit — whose woes caused massive losses at the giant insurer — are due on Sunday, and added “quite frankly, AIG’s hands are tied.”

Those payments are in addition to $121.5 million in incentive bonuses for 2008 that AIG will start making this month to about 6,400 of its roughly 116,000 employees. AIG, which was rescued in September as it faced potential bankruptcy, is also making over $600 million in retention payments to over 4,000 employees.

Together, the three programs could result in roughly $1.2 billion in retention and bonus payments to AIG employees.”

If you want to get really angry, consider that this division, whose members will be getting nearly half a billion dollars in bonuses for the remainder of 2008 and 2009, has about 370 employees. That’s well over a million dollars a person, to a group that lost over $40 billion (so far!), and bankrupted its parent company. Nice work if you can get it.

I’m all for letting those fuckwits try their luck in the job market just now. We don’t necessarily need the arsonists who burnt the house down to have a hand in rebuilding it. Something tells me they wouldn’t be using the latest in flame-retardant materials anyway…

And just for a little added outrage, how’s this for cluessless?

Following up on the news that AIG executives are so arrogant that they are actually going to insist that taxpayers pay their bonuses in spite of their epic failures to fulfill their fiduciary duty, this will really make your day:

Champagne corks are always popping somewhere, of course, and the high life never disappears entirely, especially in New York. But these days, a $750 magnum of Perrier-Jouët stands in striking contrast to the scene outside Bagatelle’s glass-paneled door, where the Dow has lost half its value since the fall of 2007, the recession has claimed a net total of 4.4 million jobs since it began, more than 850,000 families lost their homes to foreclosure last year, and the word “depression” is being heard in the land.


As for how he and his fellow Wall Streeters could still afford such afternoons, he said: “We all made so much money in the past five years, it doesn’t matter.”

A 29-year-old man who works for a large investment management firm and was at Bagatelle’s brunch one recent Saturday and at Merkato 55’s the next, put it another way: “If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion.

Fitzgerald was right. They really are different from you and me. I’m not even sure they’re human.

They need to put down the champagne and pick up some history books. I’d advise them to start with the French Revolution. Specifically, what happened to the “let them eat cake” crowd.

Outrageous Fatcats

The Fallout Continues Apace

Poor Jim Cramer. He just had no idea that a nice comedian like Jon Stewart was gonna pwn his ass:

Since his brutal interview with Jon Stewart on Thursday, CNBC host Jim Cramer has largely disappeared from public view. He skipped a planned Friday morning appearance on MSNBC’s Morning Joe, and MSNBC producers were also asked to avoid bringing up the debacle during yesterday’s programming. Today, the Washington Post’s Howard Kurtz hints at the internal turmoil the interview caused, noting that staffers were “furious” with Cramer for failing to defend the network:

Cramer has told colleagues he felt blindsided by Stewart’s hostile approach. But many CNBC staffers were furious with Cramer yesterday for failing to defend the network’s reporting or to criticize Stewart’s video clips as selectively edited or out of context.

I don’t think any sort of context would have helped, and Cramer knew this. Why do you think he didn’t defend himself? Why do you think he didn’t hit back?

Watch those videos again, and you will see a truth: Cramer knew he was busted. He knew there was no defense. That’s why he turned spoiled-milk white when Jon slammed him with that video clip, and why all he did was throw himself on the mercy of the court. It’s too bad CNBC and the rest of its staff are too clueless to recognize when the jig is up.

And do you want to know how badly it’s up? We’ve got a Republican calling for more regulation, for fuck’s sake:

Oopsie-daisies. Talk about your unexpected consequences. The highly-blogged about tête-à-tête between Jon Stewart and CNBC’s Jim Cramer has exposed the very ugly underbelly of how the former hedge-fund manager made money before his TV career. Former Congressman Tom Davis (R-VA) says it’s time some investigator takes a closer look at Cramer:

CNN reporter Jim Acosta reflected on limited regulation of hedge fund’s and how they attracted “wealthy investors.” He then turned to former Rep. Tom Davis, R-Va., once chairman of the House Government Reform Committee, who said Cramer’s the reason hedge funds should be considered for more regulation.

“I think he’s become a poster child for why hedge funds need more regulation and transparency,” Davis said.

When asked if what Cramer said was illegal, Davis admitted that it was not, but “should be. He may well have crossed the line.”

Davis suggested the powers that be “ought to be looking at” Cramer’s confessed manipulation from 2006. “I think the tragedy is over the last few years nobody’s been looking at this at all.”

Of course, this is coming from one of the rare reasonably-sane Republicans, not a Con, but still. Near gave me cardiac arrest, that did.

Davis is right. It’s time for tighter regs, and it’s time for a good, sharp, merciless look at these people. Cramer’s merely the appetizer.

Jon Stewart started something I don’t believe will be finished anytime soon.

The Fallout Continues Apace

"You Will Like Him When He's Angry" – Jon Stewart Annihilates Jim Cramer

Steve Benen’s absolutely right. You will like Jon Stewart when he’s angry:

In 2004, Jon Stewart appeared on CNN’s “Crossfire,” and explained that the show was “hurting America.” He wasn’t kidding. The brutal appearance exposed the show as something of a farce; CNN’s executives ended up agreeing with Stewart; and three months later, CNN announced that “Crossfire” was finished.

With that history in mind, CNBC should feel awfully nervous right now.

After a week of back and forth, Stewart had Jim Cramer on “The Daily Show” last night and not only destroyed the “Mad Money” host, but more importantly, exposed CNBC as an embarrassment. By the time the brutal interview was over, one thing was clear: the network has no clothes.

I’m surprised they’re left with any skin.

Jon Stewart’s treated as something as a lightweight because he does a fake news program on a comedy channel. It’s a mistake. He’s one of the sharpest satirists out there. He’s more of a journalist than the vast majority who lay claim to that title on “serious” programs. And, in the finest tradition of the old Irish bards, his satire brings the mighty crashing down. Kings used to tremble in fear when a bard got annoyed with them. Kings who didn’t respect their power lost their thrones. It’s a historical lesson some folks should revisit, because Jon Stewart is proving that sort of bard.

If you haven’t already done so, take fifteen minutes to watch the demolition in its entirety.

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The Daily Show With Jon StewartM – Th 11p / 10c
Jim Cramer Pt. 1
"You Will Like Him When He's Angry" – Jon Stewart Annihilates Jim Cramer

Damn You, Socialists!

Steve Benen has this chart. I have taken the liberty of modifying it to reflect the opinions of certain of our more conservative lawmakers and “thinkers”:

John Cole posted this graph a few days ago. See that column on the far-right edge? That’s where Obama proposes the marginal top-rate should be.

It’s also the rate conservatives believe is so outrageous, that they’re accusing the president of “socialism” and talking openly about the “Going Galt” scenario in which wealthy and industrious Americans would deliberately make less money to spite their country.

It’s all quite silly, but the graph adds some helpful context to drive the point home.

Obama is proposing a top rate lower than Reagan’s first term, lower than Nixon’s, lower than Eisenhower’s, and lower than FDR’s when he pulled us out of the Great Depression.

So, really, try not to hyperventilate.

But they’re so expert at it….

Michael Lind’s Salon piece dovetails rather nicely with the above theme, and also makes superb use of the absurd:

Barack Obama’s bold, ambitious budget plan proves that he is the true heir of Franklin Roosevelt and the New Deal. Consider Obama’s Rooseveltian energy plan. In 1939, President Roosevelt decided to mobilize Americans to create a new source of energy: atomic power. Although he was urged to focus on government-funded R&D, FDR chose a different route. He wisely encouraged private capital to invest in atomic energy research by a variety of tax incentives. To make atomic power investment more palatable to private capital, FDR boldly chose to make all other forms of energy in the U.S. uneconomical, by slapping high taxes on kerosene and coal. With the money from the new federal Kerosene Cap and Trade system, President Roosevelt and Congress funded a small-scale federal research program, in the hope of attracting much greater private investment …

Wait. What’s that you say? FDR didn’t do that? He poured federal money into the all-public Manhattan Project and created the first atomic bomb in a couple of years? He didn’t tax kerosene to make it uneconomical and to encourage private investment in atomic power? […]

All right, then, forget FDR. He was a socialist, anyway. Let Dwight Eisenhower serve as a model for the Obama administration. President Eisenhower authorized the biggest infrastructure program in American history, when he signed the National Interstate and Defense Highways Act of 1956. The interstate highway act created an elaborate system of private tax incentives and public-private partnerships (PPPs) to encourage private corporations to build national highways. To begin with, all U.S. highways were leased to domestic and foreign corporations for a period of decades. Second, all U.S. highways were set up with toll booths, so that American drivers would be forced to repay the corporate owners of the national highways every few dozen miles. Finally, a system of high-speed lanes with higher tolls was created, so that the rich could whiz down the road while middle-class and poor Americans were stuck in traffic jams …

All right, what now, wise guy? So that’s wrong, too? Eisenhower’s national highway system wasn’t based on tolls, leases to foreign companies, income-based pricing, and tax credits for private corporations? It used gasoline taxes to fund free public highways?

Free highways without toll booths, owned by the public, paid for out of taxes? My God. So the John Birch Society was right after all. Dwight Eisenhower was as much of a socialist as Franklin Delano Roosevelt!

Digby follows up with this astute observation:

The point here is that conservatives have so demonized the concept of the public commons, particularly inside the Beltway, that what is now considered a bold and socialistic policy shift – raising the top marginal tax rates 3-4%, investing in infrastructure with a mix of public and private money, using an individual mandate to keep insurance companies in the health care game, cap and trade – is actually a pre-compromised, market-friendly, neoliberal jumble that fits squarely in the center of the ideological divide. And this is essentially why the Army of Galts screams about socialism, to force the debate further to the right from the center where it is now situated.

And how much will this horrific tax hike cost those poor, soaked rich folk? Digby did the math. I looked up the menu. And it turns out that they’ll be forced to pony up the equivalent of a grande latte at a New York Starbucks per day.

That’s right. Four bucks. That’s how much extra a person making $300,000 will be coughing up.

The poor, poor dears. Socialism is an awful burden to bear, innit?

Damn You, Socialists!

Time to Start a Tax-Consulting Business

Via Steve Benen, Jon Chait and his commenter have a bonza idea for playing Robin Hood in today’s economy:

My post about ignorant rich people who think they can have a higher after-tax income by holding their earnings under $250,000 a year brought on a follow-up from National Review‘s Stephen Spruiell:

But these taxpayers have other reasons to be worried. Obama has proposed increasing the tax rate on capital gains and dividends from 15 to 20 percent for those taxpayers earning over $250,000 (married) and $200,000 (single). If that’s implemented without any kind of phase-in, then going from $249,999 to $250,000 incurs a pretty big tax penalty, right?

Maybe I’m wrong about this (if I am, I’m sure Chait will let me know).

Jesus Christ, yes, you’re wrong. Taxes on capital gains income and dividends work the same as taxes on ordinary income. When you move int a higher bracket, only the income above that level is taxes at the higher rate. So, the lowest ordinary income tax rate is 10%. Everybody, including Bill Gates, pays some of their income tax at the 10% rate. Nobody pays their highest tax rate on all their income.


Commenter “ratnerstar” has the right idea here: It’s time to stop educating these ignorant rich people and start taking advantage of them. We have some number of high-income people out there who earnestly think they can increase their take-home pay by decreasing their salaries.This is one of the great scamming opportunities of all time, with the side bonus that the targets richly deserve their fate.

We should start a franchise. We’ll need a name. H&R Bilk? Jackson Hornswaggle?

No, we don’t have to be subtle. Are you kidding? People this ignorant about the tax laws will be so eager to avoid paying a few extra pennies on the dollar that the meaning of the name will escape them entirely.

Time to Start a Tax-Consulting Business

How One of the Biggest Tax Cuts in History Became Known as a Tax Increase

Ladies and gentlemen, allow Digby to present our self-absorbed media in action:

And on the subject of economics, their perspective is from the perch of the upper class, particularly those media celebrities who pretend they are men and women of the people, but who aren’t good enough actors to hide that they don’t want to see their taxes go up under the Obama budget.

Barack Obama has proposed a budget that, among other things, would reduce taxes on over 90 percent of the population and increase taxes on around 2 percent of the population. Flipping through the Sunday talk shows, it’s striking to see how uniformly wealthy media celebrities think it makes sense to characterize this is a “tax increase” or “raising taxes” and to leap immediately to a discussion of what the impact of these “higher taxes” will be. I think that the majority of people whose taxes are set to go down might be more interested in learning about the impact of lower taxes.

Gee, ya think?

As Sean Quinn noted one reporter saying after the briefing, “Did you notice all the questions about taxes came from reporters making over $250,000 a year, especially the TV guys?”

Jamison Foser tackled this today, especially the way in which the media acted like this was a brand new idea and not a central part of the President’s campaign platform:

What sparked this sudden concern about “class warfare”? President Obama indicated that in order to fund things like health care, the very wealthiest Americans (individuals who make more than $200,000 and families making more than $250,000) might have to pay slightly more in taxes, via the expiration of President Bush’s tax cuts for those earners. Under this plan, the wealthiest Americans (again, those making more than $200,000) would be subject to the same income tax rate they paid in the 1990s — when, it should be remembered, the rich got richer and the economy did quite well.

If this plan — raising taxes slightly on people who make more than $200,000 a year in order to pay for things like health care for people who don’t — sounds familiar, it’s because Obama campaigned on it for roughly two years. Conservatives, amplified by the news media, ridiculed it with labels like “socialism” and “class warfare” and used all kinds of scary rhetoric. And the American people voted for it anyway.

In droves, even. And, considering Obama’s popularity keeps increasing, I do believe everyone’s still happy with Obama’s plans, except for those poor dears who will be thrown into poverty because they’re paying a few extra percentage points’ worth of taxes on their already obscene salaries.

The vast majority of our nation’s media is about as ridiculous as the Republicon party. And it wouldn’t surprise me a bit if they became just as irrelevant.

How One of the Biggest Tax Cuts in History Became Known as a Tax Increase

Spending Cut Calculator – We Needs One

The always brilliant dday comes up with another brilliant point:

One result of the budget mess being resolved here in California was a variety of tax increases (which were mostly flat or regressive and not all that good). The spending cuts were actually larger. However, in two of the weekend editions of the Los Angeles Times, right on page A1 above the fold, there was a graphic of a “tax calculator,” which projected the additional taxes an individual would pay based on certain factors like income, number of dependents and values of vehicles. They have a corresponding tax calculator on their website where users can type in the data and get the precise tax hit coming to them. The Sacramento Bee has the same thing. Talk radio was having a field day with these calculators over the past few days, getting people to call in and disclose their statistics and telling them how much money they will owe. I heard a lady making $126,000 a year ranting about an $800 tax increase, and nobody seemed to find that absurd.

In my life, I have never seen a “spending cut calculator,” where someone could plug in, say, how many school-age children they have, or how many roads they take to work, or how many police officers and firefighters serve their community, or what social services they or their families rely on, and discover how much they stand to lose in THAT equation. Tax calculators show bias toward the gated community screamers on the right who see their money being “taken away” for nothing. A spending cut calculator would actually show the impact to a much larger cross-section of society, putting far more people at risk than a below 1% hit to their bottom line.

But of course, people who are perceived to depend on state services probably don’t log on to the LA Times and the Sacramento Bee websites very often to calculate their tax burden. In reality, we all depend on the state for roads and law enforcement and libraries and schools and county hospitals and on and on. And in Los Angeles County, one in five residents – almost 2.2 million people – receive some form of public aid. So wouldn’t it make sense to portray the real cost of spending cuts in the same way that tax increases are portrayed?

Why, yes. Yes, it would. And I think it would give Americans the shock of their young lives to see just how much they depend on government spending in their daily lives.

I don’t make jack diddly shit, but you know what? I’d accept a tax increase to improve my community and my country. Those services are a damned good bargain. So why the fuck can’t people who earn – lessee – 4.34 times what I make quit their bitching and accept a measly $800 increase?

When did this country become so damned allergic for paying for what they use?

Oh. Right. When the Cons got stuck in the tax cut rut…

Spending Cut Calculator – We Needs One

We Don't Need No Stinkin' Stimulus!

Ah, I’m sure the desperate citizens of these states find it heart-warming that their Con governors are standing on ideology:

BATON ROUGE, La. – A handful of Republican governors are considering turning down some money from the federal stimulus package, a move opponents say puts conservative ideology ahead of the needs of constituents struggling with record foreclosures and soaring unemployment.

Though none has outright rejected the money available for education, health care and infrastructure, the governors of Texas, Mississippi, Louisiana, Alaska, South Carolina and Idaho have all questioned whether the $787 billion bill signed into law this week will even help the economy.


U.S. Rep. James Clyburn, D-S.C., the No. 3 House Democrat, said the governors — some of whom are said to be eyeing White House bids in 2012 — are putting their own interests first.

“No community or constituent should be denied recovery assistance due to their governor’s political ideology or political aspirations,” Clyburn said Wednesday.

In fact, governors who reject some of the stimulus aid may find themselves overridden by their own legislatures because of language Clyburn included in the bill that allows lawmakers to accept the federal money even if their governors object.

He inserted the provision based on the early and vocal opposition to the stimulus plan by South Carolina‘s Republican governor, Mark Sanford. But it also means governors like Sanford and Louisiana’s Bobby Jindal — a GOP up-and-comer often mentioned as a potential 2012 presidential candidate — can burnish their conservative credentials, knowing all the while that their legislatures can accept the money anyway.

Considering how the Con base is shrinking, it seems to me that’s a fool’s gamble. How easy will it be for challengers to annihilate them with “Governor X rejected the money that saved your house/kids/job” ads?

Meanwhile, the insanity in California just gets more insane:

Just to update everyone on the meltdown out here in California – last night the Republicans in the State Senate engineered a putsch, deposing their leader in the dead of night because he was insufficiently unconcerned about the welfare of the state.

Around 11 p.m., a group of GOP senators, unhappy with the higher taxes that Senate leader Dave Cogdill of Modesto agreed to as part of a deal with the governor and Democrats, voted to replace him in a private caucus meeting in Cogdill’s office. Shortly before midnight, it was still unclear who would replace him.

Cogdill’s ouster could be a major setback to budget negotiations. Cogdill was a lead negotiator on the budget package and had committed to voting for it. If he were removed from his leadership post, a new Senate minority leader would likely try to renegotiate the deal, which lawmakers spent three months forging.

This is what happens when you give Cons a 2/3 majority cudgel. And, as Paul Krugman sez:

Everyone should be paying attention to the political/fiscal catastrophe now unfolding in California. Years of neglect, followed by economic disaster — and with all reasonable responses blocked by a fanatical, irrational minority.

This could be America next.

Principled opposition is one thing. It’s necessary and healthy in a democracy. But the obstructionism the Cons are engaging in isn’t principled, it’s just destructive and deadly dangerous. How much of the country do we let them destroy before we have them declared a danger to self and others and carted off to a nice, quiet room with deeply-padded walls, where they can be gently reintroduced to Mr. Reality while the rest of us fix all the stuff they broke during their psychotic rampage?

We Don't Need No Stinkin' Stimulus!

The Answer to a Very Good Question

Cujo359, the official Thinking Brain Dog of En Tequila Es Verdad, has an economic post up worth reading in its entirety. But I just want to focus on this bit here:

We were also the ones who allowed our manufacturing and services industries to be shipped overseas. Rather than fix the environmental problems with the semiconductor and steel industries, we let them be shipped elsewhere. The employment that created the highest-paying jobs for us working stiffs were shipped to countries that didn’t bother to enforce employment laws, and took a dim view of labor unions. Now we know the answer to a question that’s been on my mind for some time: How can an economy cast off its ability to make things, and instead live on ever-cleverer “financial instruments” and “intellectual property” to sustain itself?

The answer is now clear: It can’t.

I remember asking myself this very question back in the ’90s, when I was a crass, clueless college student. And I’d come up with the same answer. I was a little surprised when things took so long to tank.

So my new question is, if Thinking Brain Dogs and tequila-soaked economic amateurs could see this coming from over a decade back, why the fuck is it coming as such a surprise to our ruling class?

Oh. Right. Because they live in an alternate reality.

The Answer to a Very Good Question