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City Lights

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Home country: United Corporations of America
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Member since: 2001
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Mother Jones: It's the Wealth Gap, Stupid

Why the truly alarming economic trend is not income inequality.

—By Reid Cramer
Mon Feb. 13, 2012 3:00 AM PST

When Mitt Romney bowed to political pressure and released his 2010 tax return, it showed, to no one's great surprise, that the Romneys are rich. Really, really rich. They reported income of more than $21 million, itemized deductions of over $4.5 million, and a total tax bill of just over $3 million. They made charitable contributions of almost $3 million, although more than half of that went to their church.

But what really stood out in the tax return—beyond the presidential candidate's 13.9 percent tax rate—is not that Mitt makes a lot of money, it's that he has a lot of money. Romney's finances are illustrative of the growing gulf between haves and have-nots. It's not about income equality; it's about the widening wealth gap.

In recent years, the fortunes of the Romneys and others in their cohort have continued to grow, notably diverging from the majority of Americans still struggling to deal with a slow economic recovery. The Occupy Wall Street protestors stole the media spotlight this past fall by creatively highlighting these discrepancies. President Obama has taken notice and, as reflected in his State of the Union address, is teeing up inequality as a major a campaign theme for the fall. But it is not enough to highlight the gap between incomes of the top 1 percent and the bottom 99. What’s more alarming—and consequential over the long haul—is the growing concentration of wealth.

Recent estimates indicate that the while the top 1 percent earn 21 percent of the nation's income, they possess 36 percent of total wealth. This is especially troubling because while income dictates how well you’re doing today, it is access to wealth (the stock of resources) that creates opportunities down the line. Wealth is the bundle of assets, investments, and savings that can be tapped at will and strategically deployed. Or it can be used to generate passive income, as it does for the likes of Warren Buffett and Mitt Romney. There certainly is an issue of fairness to consider. As long as we tax capital gains and dividends well below the tax rate on earnings gained through work, the rich will have much lower marginal tax rates than the rest of us.

Read the entire piece at MotherJones.com

TPM: Are Republicans About To Commit Medicare Suicide?

Brian Beutler

February 7, 2012, 5:40 AM

It’s shaping up to be spring 2011 redux. Just under a year ago, Republicans — euphoric after a midterm election landslide, and overzealous in their interpretation of their mandate — passed a budget that called for phasing out Medicare over the coming years and replacing it with a subsidized private insurance system for newly eligible seniors.

The backlash was ugly. But Republicans seem to have forgotten how poisonous that vote really was, and remains…because they’re poised to do it again. This time they’re signaling they’ll move ahead, with a modified plan — one that, though less radical, would still fundamentally remake and roll back one of the country’s most popular and enduring safety net programs.

“We’re not backing off any of our ideas, any of our solutions,” GOP budget chairman Paul Ryan said last week in an interview with Fox.

Why on earth would Republicans put the whole party back on the line? Particularly after a year of serial brinkmanship and overreach that has dragged their popularity down to record lows?

Read the entire piece at TPM.com

TPM: Bait And Switch: GOP Leaders Renege On Debt Limit Deal Defense Cuts

Brian Beutler
February 3, 2012, 5:57 AM

Republican leaders in Congress have all but reneged on a key agreement they reached with the White House last summer rather than reconsider their unwavering stance against new tax revenue.

Relations between the Obama administration and the congressional GOP were already just about as bad as can be. But even so, this sets a precedent future Congresses and White Houses will remember when partisan mismatches force them to strike deals and govern.

“I’ve got concerns about the sequester,” House Speaker John Boehner told reporters Thursday. “I’ve made that pretty clear. And replacing the sequester certainly has value. The defense portion of the sequester, in my view, would clearly hollow our military. The Secretary of Defense has said that, members of Congress have said it. But the question I would pose is, where’s the White House? Where’s the leadership that should be there to ensure that this sequester does not go into effect.”

“Sequester” is budget-speak for across-the-board cuts. But the cuts he’s talking about were part of a deal he recently claimed he’d honor. Here’s what he’s talking about.

Read the entire piece at TPM.com


Republicans suck!

TPM: McConnell’s Revisionist History: Congress Gave Obama Everything He Wanted!

Sahil Kapur

January 31, 2012, 5:36 AM

Senate Minority Leader Mitch McConnell (R-KY) has embraced the argument that President Obama was able to pass every bit of his legislative agenda in his first two years thanks to large Democratic majorities in both houses of Congress. It’s intended as a counterpoint to the President’s re-election strategy of attacking the congressional GOP as do-nothing obstructionists. But it’s also a revisionist history of the 111th Congress, during which McConnell more than any other Republican in Washington stood athwart Obama’s agenda to great effect.

The White House has “been trying to pretend like the President just showed up yesterday, just got sworn in and started fresh,” McConnell declared Sunday on CNN’s State of the Union. “In fact, he’s been in office for three years. He got everything he wanted from a completely compliant Congress for two of those three years… We are living in the Obama economy.”

This isn’t a new claim for McConnell, but it’s audacious even by Washington’s lax standards. It was McConnell, after all, who led Senate Republicans in serial filibusters — a record-setting number — successfully thwarting large chunks of Obama’s agenda.

By forcing Democrats to find 60 votes to nearly every action, McConnell and his members were able to block major initiatives including climate change and immigration reform bills, various appropriations bills, myriad presidential appointments, and arguably also a Democratic effort to let the Bush tax cuts expire for high incomes. Meanwhile, big legislative items that did pass, such as health care reform and the economic stimulus package, were notably scaled back as a result of the GOP filibusters.

Read the entire piece at TPM.com

Sirota: Overconsumption won’t save America

Friday, Jan 27, 2012 1:00 PM UTC

To avoid another crisis, we need an economy based on thrift and sustainability not loans and credit card debt

By David Sirota

In 1977, two Boeing 747s collided on an airstrip in the Canary Islands. According to accident investigators, those who survived the initial blast in one plane had time to escape before a fire consumed the wreckage. But eyewitnesses reported that many remained in their seat looking perfectly content — as if nothing was wrong.

Not surprisingly, dozens of these dazed victims were burned to death, and the episode became a reminder of the so-called normalcy bias — a cognitive phenomenon whereby many who are faced with imminent disaster instantly convince themselves that everything is normal and that they don’t have to modify their behavior.

Unpleasant as this anecdote is to recount, it exemplifies the psychology at the root of one of America’s most destructive traits: our obsession with materialism and consumerism. To extrapolate the metaphor, if our damaged economy, record-low savings rate and sky-high personal debt levels are that smoldering plane about to explode, then America’s “shop till you drop” normalcy bias may be engineering yet another avoidable tragedy.

The most recent holiday binge exemplified the impending crisis. Despite persistent unemployment, flat wages and higher prices for necessities (food, healthcare, etc.), America nonetheless went on its usual post-Thanksgiving buying spree.

Read the entire piece at Salon.com

Beutler via TPM: Three Key Questions Raised By Romney’s Tax Revelations

Brian Beutler - January 25, 2012, 5:44 AM

Mitt Romney’s campaign has tried desperately to put a lid back on the can of worms that burst open weeks ago when the one-time GOP presidential front runner declined to release any of his tax returns.

But by actually releasing his 2010 return, and an estimation of his 2011 return, camp Romney has provided reporters with some, but not all, of the answers they’re looking for as they try to paint a complete picture of the finances of one of the wealthiest candidates for President in U.S. history.

Romney’s revelations confirm that his effective tax rates in the past couple years have been as low or lower than those of workers with truly modest means. They also confirm that he’s availed himself of truly complex tax strategies designed to boil his liability down to the lowest level allowed by the country’s heavily rigged, labyrinthine tax code. And we know, too, that these are things Romney didn’t want voters to know — at least not yet.

But they raise a series of new questions that will likely require Romney to disclose several years’ worth of additional tax returns if he wants to answer them satisfactorily. Here are three big ones that touch generally on the theme of Romney’s efforts to reduce his tax burden by taking advantage of areas of the law that simply aren’t available to most people.

Read the entire piece at TPM.com

Kornacki via Salon: Obama’s 99 percent speech

Wednesday, Jan 25, 2012 4:33 AM UTC

There was plenty of mush in his State of the Union, but also an unmistakably combative and populist tone
By Steve Kornacki

Before Tuesday night, it had been 16 years since a Democratic president gave a State of the Union address in his reelection year.

And in some ways, the speech that Barack Obama delivered was very similar to the one that Bill Clinton offered back in 1996. But if you put aside all of the platitudes, mushy rhetoric and feel-good proposals, the heart of Obama’s remarks demonstrated that he’s intent on pursuing a far more combative and populist path to a second term than the one Clinton followed.

It was during his Jan. 23, 1996, State of the Union that Clinton uttered the signature line of his presidency. “The era of big government is over,” he told a joint session of Congress that night. The line captured the essence of an election year message that largely conceded the broad themes of the Reagan revolution while offering the incumbent as a more compassionate implementer of them than his Republican opponents.

Obama’s address included no shortage of appeals to unity, bipartisanship and overriding national purpose, and he articulated plenty of vague, popular-sounding policy goals, much as Clinton did during his ’96 campaign. But his central message stressed a sharp and basic philosophical contrast with his partisan opponents – one he clearly plans to make the centerpiece of his reelection effort.

Read the entire piece at Salon.com

Walsh: Mitt pounces, Newt pouts: Two rich guys squabble

Tuesday, Jan 24, 2012 5:45 AM UTC

Gingrich gets "sad" about "personal, nasty" attacks as Romney tax returns show he paid 13.9 percent on $21 million
By Joan Walsh

Newt Gingrich clearly missed the rabid South Carolina crowds at Monday night’s debate. NBC asked the Tampa, Fla. audience not to cheer, and mostly they didn’t, leaving Gingrich listless without angry mob energy. He didn’t bash the media the way he did in last week’s Fox and CNN debates, and he tried to act presidential when Mitt Romney jabbed him about his work for Freddie Mac and Fannie Mae.

But he failed. Presidents don’t pout. A sulky Gingrich complained the GOP campaign had become “unnecessarily personal and nasty, and that’s sad.” Gingrich objecting to “personal and nasty” is as believable as Romney pretending he does his own laundry. That’s really sad. But Romney had the better night, hitting Gingrich early and often for having to resign the House speakership “in disgrace” due to ethics charges. And when Gingrich tried to claim he left his leadership post voluntarily, Ron Paul double-teamed him with Romney. “He didn’t have the votes, that was what the problem was,” Gingrich’s former House colleague told the crowd.

Also Monday night, Romney made partial tax returns available to reporters. They showed he paid a rate of 13.9 percent in 2011 and 2010, on income of around $21 million both years. That means in a single day, Romney earned more than the median income for U.S. workers, just over $31,000. He paid a lower tax rate than workers making $40,000 to $50,000, because his income came from investments (somehow it seems he didn’t have to declare the $374,000 he made last year from speaking fees; it’s still not clear how he dodged that.) Tuesday morning the focus will be back on Romney’s shamefully low tax rate, and the way he earned his wealth at Bain Capital. Monday night he got his licks in on Gingrich.

Romney hammered Gingrich hard on some financial information Gingrich released Monday: his contract with Freddie Mac. While Gingrich insists he didn’t lobby, Romney noted that his newly released contract showed he was hired by the firm’s chief lobbyist. “We have congressmen who say you lobbied them,” he told his rival. “I didn’t lobby them,” Gingrich shot back, his voice getting high and whiny the way it did when that Iowa voter told him he was a disgrace to his party last spring. At one point he fell awkwardly silent. “You can call it whatever you like, I call it influence peddling,” Romney concluded. Score that round for the wealthy former frontrunner.

Read the entire piece at Salon.com

Chi-Trib: Sen. Mark Kirk undergoes surgery after suffering stroke

9:31 a.m. CST, January 23, 2012

U.S. Sen. Mark Kirk underwent surgery today at Northwestern Memorial Hospital after suffering a stroke, his office said.

"On Saturday, Senator Kirk checked himself into Lake Forest Hospital, where doctors discovered a carotid artery dissection in the right side of his neck," his office said in a statement.

"He was transferred to Northwestern Memorial Hospital in Chicago, where further tests revealed that he had suffered an ischemic stroke," it said. "Early this morning, the senator underwent surgery to relieve swelling around his brain stemming from the stroke. The surgery was successful.

"Due to his young age, good health and the nature of the stroke, doctors are very confident in the Senator's recovery over the weeks ahead."

http://www.chicagotribune.com/news/local/breaking/chi-sen-mark-kirk-hospitalized-after-suffering-stroke-20120123,0,6664285.story

Salon: When a party flirts with suicide

Monday, Jan 23, 2012 12:50 PM UTC

The last time GOP elites lost control of their nominating process, they got Barry Goldwater – and an epic landslide
By Steve Kornacki

Everything about Newt Gingrich screams “general election disaster.” He is burdened with far too much personal and ethical baggage, is far too prone to needlessly inflammatory and polarizing antics, and turns off far too many voters with his arrogance and unconcealed contempt for his opponents.

The three most recent national polls all show his unfavorable rating at or near 60 percent — more than double his favorable score.This mirrors what happened the last time Gingrich played such a prominent role on the national stage, when he claimed the House speakership after the 1994 election and promptly established himself as the country’s most despised public figure — the star of an estimated 75,000 Democratic attack ads in the 1996 campaign cycle. The more most people see of him, the less they like him.

So while it’s theoretically possible that Gingrich would somehow defy his reputation and overcome his worst tendencies in a fall campaign, George Will was probably on solid ground when he said in the wake of Gingrich’s South Carolina triumph: “All across the country this morning people are waking up who are running for office as Republicans, from dog catcher to the Senate, and they’re saying, ‘Good God, Newt Gingrich might be at the top of this ticket.’’

The good news for Will, who recently wrote that Gingrich “embodies the vanity and rapacity that make modern Washington repulsive,” and other worried Republicans is that the former speaker’s breakthrough isn’t exactly unprecedented. Candidates widely seen as unelectable by their party’s elites have emerged during past primary seasons as threats to win the nomination, and the elites have generally managed to stop them. The question is whether they’re still capable of doing it in 2012 — or if the tricks they’ve mastered in the past few decades simply don’t work anymore.

Read the entire piece at Salon.com
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