It is only certain that uncertainty rules . . .
It really doesn't make a whole lot of difference if we are in the first part of a double dip recession or close to the bottom of a single dip; the US economic recovery will be very, VERY slow compared to what the country has been used to after past recessions.
The recovery won't really get under way until the real estate market gets back on track. Today, the estimate is that we have more than a year’s supply of homes on the market. That is, a year's supply of what used to be a year's supply in the good (read, "of course the beanstalk grows to the moon, stupid") old days. In today's market it is two or three times that amount. Then there is the shadow inventory (those are the houses that the banks will wind up owning when this all shakes out, and which they will then dump on the market.) that will be, at least, another 12 months added. So you see, in real terms it may be 4, 5, 6 or even seven years before things get back to some semblance of "normal" in the residential real estate market. Oh yes, we are just now beginning to feel the slump in the commercial real estate market. That bit of bad news has yet to be figured into the sound bites of the Political Wonks.
The American Consumer is not as stupid as most political and financial pundits are. Those of us who live in the real world, that is East of Riverside, CA, and west of the Hudson River, excluding that part of the heartland which lies inside "Beltway"; have a much better understanding where the economy is, and where it is going than those inside the Beltway, on Wall Street, or the nuts of the West.
Consumers have become Savers and are saving all they can, at least those who have a job are. Job or no job, there are few who are spending on anything which isn't necessary, so retail sales aren't going to pull us out of the doldrums. Small businesses, the major creators of jobs, aren't going to do anything that uses cash because they don't know what "money grabbing/money costing" Sisyphean Load Washington will pile on their backs next.
Maybe the Tea Partiers and their associated groups will get Washington's attention and stop the ridiculous taxing and spending spree before it is too late. The only certainties are these:
· Unless things turn around, the U.S. will be relegated to Third World Status by the time my Grandson graduates from collage and has to go to India or China to find a job.
· Until entrepreneurs are free to carry on business without fear of retribution from Washington, we will continue with 10% plus unemployment.
· Without reducing the exponentially increasing size and cost of government, that’s all governments, Federal, State and Local, to somewhere under 5 % of GDP, we will continue to be a debtor nation.
Maybe it wouldn’t be so bad. I wonder how Mexico would treat US illegals streaming into their country looking for a job?
IMNTBHO
Dave Skibowski
Monday, September 20, 2010
Friday, September 17, 2010
HIGH TAXES AND POORLY EDUCATED WORKERS DRIVE BUSINESSES OFF SHORE . . .
Sending Jobs Overseas, and Corporate Tax Breaks
From: FactCheck.org
Q: What kind of tax breaks does the U.S. give to oil companies and to corporations that send jobs overseas?
When Democratic presidential candidates talk about tax breaks for corporations that ship our jobs overseas and tax breaks and subsidies for oil companies, what are they referring to and are they accurate?
A: Companies with overseas subsidiaries can keep their income untaxed by the IRS if they don't transfer that revenue back to the U.S. Oil and gas companies received tax breaks and subsidies from a 2005 energy bill, but the bill led to a net tax increase for them.
It’s true that Sens. Hillary Clinton and Barack Obama have associated the transfer of U.S. jobs overseas with tax breaks, or loopholes, for companies that practice off-shoring:
Obama, Nov. 3, 2007: When I am president, I will end the tax giveaways to companies that ship our jobs overseas, and I will put the money in the pockets of working Americans, and seniors, and homeowners who deserve a break.
Clinton, Nov. 19, 2007: And we are going to finally close the tax loopholes and stop giving tax breaks to companies that ship jobs overseas. Enough with outsourcing American jobs using taxpayer dollars.
Both candidates are referring to a feature of the U.S. tax code that allows domestic companies to defer taxes on “unrepatriated income.” In other words, revenue that companies earn through their overseas subsidiaries goes untaxed by the IRS as long as it stays off the company’s U.S. books.
But economists, including left-leaning ones, do not agree that eliminating this provision will bring an end to off-shoring. And here’s why: In the U.S., companies are taxed 35 percent on earnings of $10 million to $15 million or on all earnings over $18.3 million. That’s one of the highest corporate tax rates in the world, making an overseas move somewhat attractive to companies that wish to avoid the U.S. tax rate. But that's not the leading reason companies send jobs overseas. According to a 2005 report by the Government Accountability Office, global technological advancement, increased openness of countries such as China and India, the higher education level of foreign workers in technological fields, and the reduced cost per foreign worker are all contributing factors to off-shoring.
We first addressed this popular theme in 2004, when we reported on a John Kerry campaign ad in which he blamed President George W. Bush for providing tax incentives to companies “outsourcing” jobs overseas. At the time we found that such tax breaks, which do exist, pre-dated the Bush administration and that even Democratic-leaning economists did not support the idea that changing the corporate tax code would end the movement of jobs overseas.
Three years later, in Dec. 2007, we reported on an ad launched by a labor group in support of John Edwards. The ad implied that corporate tax breaks were responsible for the shipment of jobs overseas from an Iowa Maytag plant. We found that the jobs were actually sent to Ohio and that, again, eliminating such tax breaks would not go far in stanching the flow of jobs overseas.
Oil Company Tax Breaks?
Both leading Democratic candidates have referred to tax breaks to oil companies:
Clinton, July 23, 2007: First of all, I have proposed a strategic energy fund that I would fund by taking away the tax break for the oil companies, which have gotten much greater under Bush and Cheney.
Obama, June 22, 2007: In the face of furious lobbying, Congress brushed aside incentives for the production of more renewable fuels in favor of more tax breaks for the oil and gas companies.
Both candidates are referring to H.R. 6, the 2005 energy bill that contained $14.3 billion in subsidies for energy companies. However, as we’ve reported numerous times, a vast majority of those subsidies (all but $2.8 billion) were for nuclear power, energy-efficient cars and buildings, and renewable fuels research. In addition, according to the nonpartisan Congressional Research Service, the tax changes in the 2005 energy bill produced a net tax increase for the oil and gas companies, as we’ve reported time and time and time again. They did get some breaks, but they had more taken away.
Emi Kolawole
Sources
Remarks of Senator Barack Obama: A Change We Can Believe In. 3 Nov. 2007. Obama for America. 26 Feb. 2008.
Policy Address on America's Economic Challenges. 19 Nov. 2007. Hillary Clinton for President. 26 Feb. 2008.
Remarks of Senator Barack Obama: Taking Our Government Back. 22 Jun. 2007. Obama for America. 26 Feb. 2008.
Democratic Presidential Debate. 23 Jul. 2007. CNN Transcripts.
Congressional Research Service. "Oil and Gas Tax Subsidies: Current Status and Analysis." Washington: GPO, 2007.
U.S. Government Accountability Office. "Offshoring of Services: An Overview of the Issues," Nov. 2005.
Copyright © 2003 - 2009, Annenberg Public Policy Center of the University of Pennsylvania
From: FactCheck.org
Q: What kind of tax breaks does the U.S. give to oil companies and to corporations that send jobs overseas?
When Democratic presidential candidates talk about tax breaks for corporations that ship our jobs overseas and tax breaks and subsidies for oil companies, what are they referring to and are they accurate?
A: Companies with overseas subsidiaries can keep their income untaxed by the IRS if they don't transfer that revenue back to the U.S. Oil and gas companies received tax breaks and subsidies from a 2005 energy bill, but the bill led to a net tax increase for them.
It’s true that Sens. Hillary Clinton and Barack Obama have associated the transfer of U.S. jobs overseas with tax breaks, or loopholes, for companies that practice off-shoring:
Obama, Nov. 3, 2007: When I am president, I will end the tax giveaways to companies that ship our jobs overseas, and I will put the money in the pockets of working Americans, and seniors, and homeowners who deserve a break.
Clinton, Nov. 19, 2007: And we are going to finally close the tax loopholes and stop giving tax breaks to companies that ship jobs overseas. Enough with outsourcing American jobs using taxpayer dollars.
Both candidates are referring to a feature of the U.S. tax code that allows domestic companies to defer taxes on “unrepatriated income.” In other words, revenue that companies earn through their overseas subsidiaries goes untaxed by the IRS as long as it stays off the company’s U.S. books.
But economists, including left-leaning ones, do not agree that eliminating this provision will bring an end to off-shoring. And here’s why: In the U.S., companies are taxed 35 percent on earnings of $10 million to $15 million or on all earnings over $18.3 million. That’s one of the highest corporate tax rates in the world, making an overseas move somewhat attractive to companies that wish to avoid the U.S. tax rate. But that's not the leading reason companies send jobs overseas. According to a 2005 report by the Government Accountability Office, global technological advancement, increased openness of countries such as China and India, the higher education level of foreign workers in technological fields, and the reduced cost per foreign worker are all contributing factors to off-shoring.
We first addressed this popular theme in 2004, when we reported on a John Kerry campaign ad in which he blamed President George W. Bush for providing tax incentives to companies “outsourcing” jobs overseas. At the time we found that such tax breaks, which do exist, pre-dated the Bush administration and that even Democratic-leaning economists did not support the idea that changing the corporate tax code would end the movement of jobs overseas.
Three years later, in Dec. 2007, we reported on an ad launched by a labor group in support of John Edwards. The ad implied that corporate tax breaks were responsible for the shipment of jobs overseas from an Iowa Maytag plant. We found that the jobs were actually sent to Ohio and that, again, eliminating such tax breaks would not go far in stanching the flow of jobs overseas.
Oil Company Tax Breaks?
Both leading Democratic candidates have referred to tax breaks to oil companies:
Clinton, July 23, 2007: First of all, I have proposed a strategic energy fund that I would fund by taking away the tax break for the oil companies, which have gotten much greater under Bush and Cheney.
Obama, June 22, 2007: In the face of furious lobbying, Congress brushed aside incentives for the production of more renewable fuels in favor of more tax breaks for the oil and gas companies.
Both candidates are referring to H.R. 6, the 2005 energy bill that contained $14.3 billion in subsidies for energy companies. However, as we’ve reported numerous times, a vast majority of those subsidies (all but $2.8 billion) were for nuclear power, energy-efficient cars and buildings, and renewable fuels research. In addition, according to the nonpartisan Congressional Research Service, the tax changes in the 2005 energy bill produced a net tax increase for the oil and gas companies, as we’ve reported time and time and time again. They did get some breaks, but they had more taken away.
Emi Kolawole
Sources
Remarks of Senator Barack Obama: A Change We Can Believe In. 3 Nov. 2007. Obama for America. 26 Feb. 2008.
Policy Address on America's Economic Challenges. 19 Nov. 2007. Hillary Clinton for President. 26 Feb. 2008.
Remarks of Senator Barack Obama: Taking Our Government Back. 22 Jun. 2007. Obama for America. 26 Feb. 2008.
Democratic Presidential Debate. 23 Jul. 2007. CNN Transcripts.
Congressional Research Service. "Oil and Gas Tax Subsidies: Current Status and Analysis." Washington: GPO, 2007.
U.S. Government Accountability Office. "Offshoring of Services: An Overview of the Issues," Nov. 2005.
Copyright © 2003 - 2009, Annenberg Public Policy Center of the University of Pennsylvania
Tuesday, September 14, 2010
Elections and Obama's Foreign Policy Choices
They may be few, but he has choices.
September 14, 2010
0856 GMT
From: Stratfor Golobal Intelligence http://www.stratfor.com/
By George Friedman
We are now nine weeks away from the midterm elections in the United States. Much can happen in nine weeks, but if the current polls are to be believed, U.S. President Barack Obama is about to suffer a substantial political reversal. While we normally do not concern ourselves with domestic political affairs in the United States, when the only global power is undergoing substantial political uncertainty, that inevitably affects its behavior and therefore the dynamics of the international system. Thus, we have to address it, at least from the standpoint of U.S. foreign policy. While these things may not matter much in the long run, they certainly are significant in the short run.
To begin thinking about this, we must bear three things in mind. First, while Obama won a major victory in the Electoral College, he did not come anywhere near a landslide in the popular vote. About 48 percent of the voters selected someone else. In spite of the Democrats’ strength in Congress and the inevitable bump in popularity Obama received after he was elected, his personal political strength was not overwhelming. Over the past year, poll numbers indicating support for his presidency have deteriorated to the low 40 percent range, numbers from which it is difficult, but not impossible, to govern.
Second, he entered the presidency off balance. His early focus in the campaign was to argue that the war in Iraq was the wrong war to fight but that the war in Afghanistan was the right one. This positioned him as a powerful critic of George W. Bush without positioning him as an anti-war candidate. Politically shrewd, he came into office with an improving Iraq situation, a deteriorating Afghanistan situation and a commitment to fighting the latter war. But Obama did not expect the global financial crisis. When it hit full blast in September 2008, he had no campaign strategy to deal with it and was saved by the fact that John McCain was as much at a loss as he was. The Obama presidency has therefore been that of a moderately popular president struggling between campaign promises and strategic realities as well as a massive economic crisis to which he crafted solutions that were a mixture of the New Deal and what the Bush administration had already done. It was a tough time to be president.
Third, while in office, Obama tilted his focus away from the foreign affairs plank he ran on to one of domestic politics. In doing so, he shifted from the area where the president is institutionally strong to the place where the president is institutionally weak. The Constitution and American tradition give the president tremendous power in foreign policy, generally untrammeled by other institutions. Domestic politics do not provide such leeway. A Congress divided into two houses, a Supreme Court and the states limit the president dramatically. The founders did not want it to be easy to pass domestic legislation, and tradition hasn’t changed that. Obama can propose, but he cannot impose.
Therefore, the United States has a president who won a modest victory in the popular vote but whose campaign posture and the reality under which he took office have diverged substantially. He has been drawn, whether by inclination or necessity, to the portion of his presidency where he is weakest and most likely to face resistance and defeat. And the weaker he gets politically the less likely he is to get domestic legislation passed, and the defeats will increase his weakness.
He does not, at the moment, have a great deal of public support to draw on, and the level of vituperation from the extremes has reached the level it was with George W. Bush. Where Bush was accused by the extreme left of going into Iraq to increase profits for Halliburton and the oil companies, Obama is being accused by the extreme right of trying to create a socialist state. Add to this other assorted nonsense, such as the notion that Bush engineered 9/11 or that Obama is a secret Muslim, and you get the first whiff of a failed presidency. This is not because of the prospect of midterm reversals — that has happened any number of times. It is because Obama, like Bush, was off balance from the beginning.
If Obama suffers a significant defeat in Congress in the November elections, he will not be able to move his domestic agenda. Indeed, Obama doesn’t have to lose either house to be rendered weak. The structure of Congress is such that powerful majorities are needed to get anything done. Even small majorities can paralyze a presidency.
Under these circumstances, he would have two choices. The first is to go into opposition. Presidents go into opposition when they lose support in Congress. They run campaigns against Congress for blocking their agenda and blame Congress for any failures.Essentially, this was Bill Clinton’s strategy after his reversals in 1994, and it worked in 1996. It is a risky strategy, obviously. The other option is to shift from the weak part of the presidency to the strong part, foreign policy, where a president can generally act decisively without congressional backing. If Congress does resist, it can be painted as playing politics with national security. Since Vietnam, this has been a strategy Republican presidents have used, painting Democratic Congresses as weak on national security.
There is a problem in Obama choosing the second strategy. For Republicans, this strategy plays to their core constituency, for whom national security is a significant issue. It also is an effective tool to reach into the center. The same isn’t true for the Democrats. Obama’s Afghanistan policy has already alienated the Democratic left wing, and the core of the Democratic Party is primarily interested in economic and social issues. The problem for Obama is that focusing on foreign policy at the expense of economic and
September 14, 2010
0856 GMT
From: Stratfor Golobal Intelligence http://www.stratfor.com/
By George Friedman
We are now nine weeks away from the midterm elections in the United States. Much can happen in nine weeks, but if the current polls are to be believed, U.S. President Barack Obama is about to suffer a substantial political reversal. While we normally do not concern ourselves with domestic political affairs in the United States, when the only global power is undergoing substantial political uncertainty, that inevitably affects its behavior and therefore the dynamics of the international system. Thus, we have to address it, at least from the standpoint of U.S. foreign policy. While these things may not matter much in the long run, they certainly are significant in the short run.
To begin thinking about this, we must bear three things in mind. First, while Obama won a major victory in the Electoral College, he did not come anywhere near a landslide in the popular vote. About 48 percent of the voters selected someone else. In spite of the Democrats’ strength in Congress and the inevitable bump in popularity Obama received after he was elected, his personal political strength was not overwhelming. Over the past year, poll numbers indicating support for his presidency have deteriorated to the low 40 percent range, numbers from which it is difficult, but not impossible, to govern.
Second, he entered the presidency off balance. His early focus in the campaign was to argue that the war in Iraq was the wrong war to fight but that the war in Afghanistan was the right one. This positioned him as a powerful critic of George W. Bush without positioning him as an anti-war candidate. Politically shrewd, he came into office with an improving Iraq situation, a deteriorating Afghanistan situation and a commitment to fighting the latter war. But Obama did not expect the global financial crisis. When it hit full blast in September 2008, he had no campaign strategy to deal with it and was saved by the fact that John McCain was as much at a loss as he was. The Obama presidency has therefore been that of a moderately popular president struggling between campaign promises and strategic realities as well as a massive economic crisis to which he crafted solutions that were a mixture of the New Deal and what the Bush administration had already done. It was a tough time to be president.
Third, while in office, Obama tilted his focus away from the foreign affairs plank he ran on to one of domestic politics. In doing so, he shifted from the area where the president is institutionally strong to the place where the president is institutionally weak. The Constitution and American tradition give the president tremendous power in foreign policy, generally untrammeled by other institutions. Domestic politics do not provide such leeway. A Congress divided into two houses, a Supreme Court and the states limit the president dramatically. The founders did not want it to be easy to pass domestic legislation, and tradition hasn’t changed that. Obama can propose, but he cannot impose.
Therefore, the United States has a president who won a modest victory in the popular vote but whose campaign posture and the reality under which he took office have diverged substantially. He has been drawn, whether by inclination or necessity, to the portion of his presidency where he is weakest and most likely to face resistance and defeat. And the weaker he gets politically the less likely he is to get domestic legislation passed, and the defeats will increase his weakness.
He does not, at the moment, have a great deal of public support to draw on, and the level of vituperation from the extremes has reached the level it was with George W. Bush. Where Bush was accused by the extreme left of going into Iraq to increase profits for Halliburton and the oil companies, Obama is being accused by the extreme right of trying to create a socialist state. Add to this other assorted nonsense, such as the notion that Bush engineered 9/11 or that Obama is a secret Muslim, and you get the first whiff of a failed presidency. This is not because of the prospect of midterm reversals — that has happened any number of times. It is because Obama, like Bush, was off balance from the beginning.
If Obama suffers a significant defeat in Congress in the November elections, he will not be able to move his domestic agenda. Indeed, Obama doesn’t have to lose either house to be rendered weak. The structure of Congress is such that powerful majorities are needed to get anything done. Even small majorities can paralyze a presidency.
Under these circumstances, he would have two choices. The first is to go into opposition. Presidents go into opposition when they lose support in Congress. They run campaigns against Congress for blocking their agenda and blame Congress for any failures.Essentially, this was Bill Clinton’s strategy after his reversals in 1994, and it worked in 1996. It is a risky strategy, obviously. The other option is to shift from the weak part of the presidency to the strong part, foreign policy, where a president can generally act decisively without congressional backing. If Congress does resist, it can be painted as playing politics with national security. Since Vietnam, this has been a strategy Republican presidents have used, painting Democratic Congresses as weak on national security.
There is a problem in Obama choosing the second strategy. For Republicans, this strategy plays to their core constituency, for whom national security is a significant issue. It also is an effective tool to reach into the center. The same isn’t true for the Democrats. Obama’s Afghanistan policy has already alienated the Democratic left wing, and the core of the Democratic Party is primarily interested in economic and social issues. The problem for Obama is that focusing on foreign policy at the expense of economic and
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