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Good Signs In The Downturn
These are good signs:
I hope and expect to see more like this. Such activism is not only morally right, it is needed to change the direction of a capitalist system run wild back to a more social(ist) one.
Obama's stimulus plan includes some good ideas, mostly domestic investment in infrastructure and education.
But more will be needed.
Taxes for rich people need need to go up dramatically. Minimum wages and social spending have to go up too to create more basic demand. (Marc Thoma has a good overview over the various theories behind this.) Demand based on credit has to be replaced with demand based on income.
To reach these steps a movement will have to grow that pressures Washington to take such steps. Such pressure can only come from the streets. As FDR told a reformer group of his own party:
I agree with you, I want to do it, now make me do it.
Unless there is pressure on Congress and Obama, little will be done to change the dynamics that ruled the economic-political fields over the last 30 years. It is good to see the above stepsand we should support them. Even if they are yet small ones, they build the pressure that pushes the politicians into the right direction.
The chattering classes were agog magog this morning over Obama’s $700B government public works entitlement give-away, because, after all, now that grampa’s dead and we’re dividing up the grandkids’ inheritence as their “trustees”, there will be certain handling fees and carrying charges for that “trust”. Just a little “taste”.
Instead of redistributing $700B in “bubble up” tax breaks: say, a $1000 groceries rebate, a $3000 utilities rebate, a $5000 rental rebate to every working American, which would truly solve the crisis, overnight, (but downsize government due to the smaller net tax revenues), instead we get Big Daddy Warbucks, on steroids.
If you thought Halliburton, KBR and Blackwater were frauds, on this $700B-in-four- years public infrastructure deal, imagine this: 10% will be immediately lost in State sales taxes, yupp, that’s right, all public works are subject to sales tax, whoop right off the top translating into more State employee hiring. 15% will be lost to miscegenation by large national consulting firms, 15% vaporized by State EPA and class-action “green” roadblocks and legal mechanizations to remove them. Fully 25% to 45% will be burned up on government administrative overhead, permit fees, planning charettes, and public hearings. Another 20% will be lost in contractor profits and of any remainder, 50% on average will be lost in cost change-orders by mega-contractors and Fed contractors who know how to milk the system.
Hey, we’re not doing this for our health, heah!
And that’s the rosey scenario. That’s if everything goes the way it’s going already.
Why is every state besides Vermont deep in red? Government administrative overhead! And that’s State and local government! This is Federal spending! This is a BIA, for example, that burns 92% of Native American entitlements in administrative overhead!
So does $700B down the public works rathole help the common man? No, it helps the State and local government employee unions and with it, their pension and health care entitlement system. Does $700B Obama Stampede prevent hiring outsource foreign technical support working from some cubie in Mubai? Not at all. Does the giveaway prevent foreign-owned or foreign-incorporated corporations from bellying up to the public trough? No, there will be dozens, hundreds possibly of Bermuda or Dubai-based corporations taking. Will there be “right to work” challenges, union busting on a grand scale, to make sure the on the ground workers receive only limited or no long-term benefits? You bet there will.
Can you spell Davis-Bacon?
And did I mention passive investment? Did I mention commodities speculators? Are the winners in the $700B Obama Raffle prohibited from paying increased dividends to passive investors, indeed, to foreign investors, to investors who pay no income taxes as they bleed away private profits from public monies to overseas? Then will Obama announce a national ‘maker-taker’ regulation prohibiting passive speculation in commodities futures, a regulation we used to have, before Billy gave away the milk cow for some Gramm beans? Not at all! Laissez les bon temps roulez!
‘These are unusual times’, Obama cautions. ‘The solutions that might have worked in ordinary times aren’t suitable now’, he says. So why are we embracing a crony patronism public works pork barrel lashup!? Votes for jobs, payoffs for jobs, hasn’t anyone here grown up under a Chicago-style alderman system? Think of all the shovel-leaners this public works entitlement program will create, paying off the local mafia boss or district alderman for their “job” to stand around and “work”.
Big Dig? We ain’t seen nothing like this since Tutankhamun!
Posted by: Doug MacArthur | Dec 7 2008 18:53 utc | 6
b 7) People on social security are by definition working Americans or they wouldn’t have social security, just as does the Citi CEO. You see, I’m not a ‘some pigs are more equal’ socialist. I would prefer the government ‘spending’ come in the form of income tax rebates (matched with sharply reduced government size), so that the US economy can start rolling as soon as they can print out the revised 2008 tax tables,
and those rebates go equally to everyone FICA, without a means or citizenship test.
M 8) Trust me, combined taxes, fees and overheads on public works near double the cost, and that’s a ‘clean’ private contract, not 700% cost overrun Boston Big Digs, or $16B Seattle Alaska Way Viaduct to Nowhere. Since 75% of public works spending is skimmed off in government administration, in taxes, fees, overheads and profits, and a 20% tithing fee will be added to our future taxes just to service debt on the deficit that results from this pork barrel, I believe a prescription for income tax rebates to *every* working American, effective as soon as you can file your 1040 after the inauguration, is not only a more egalitarian solution, but the only one that works, because it mandates a sharp decrease in government bureaucracy.
“We understand that we’ve got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can’t worry short term about the deficit. We’ve got to make sure that the economic stimulus plan is large enough to get the economy moving,” Obama said.”
So do you transfuse US, or build new hospitals from the blood of unborn children?
What we’re getting is pork barrel, by definition, and a President who says he’s relying on a “new ethic” to prevent it! Why not leave all bank vault doors open?!
Why not say to every American, we trust you on your tax return, forged abahd et!
We’ll declare a liberal policy of peristroika and glasnost for all!
If you don’t understand how this government pork barrel process works to inflate the cost of construction, and increase the size of government, then you’re part of the problem not part of the solution. And trust me, you sure as heck can outsource pork barrel to Mumbai, and once again, if you don’t understand Mumbai outsourcing, it’s best not to become a deny-er. Right now, at this moment, I’m PDF’ing design project back office files to my cohorts in Mumbai, to have ready for tomorrow AM.
So what do we really need?
We need existing infrastructure repaired everywhere, not just big city pork barrel. We need potholes paved, we need aging water and sewer lines replaced, we need old abandoned buildings demolished and rural bridges rebuilt so farmers can get food to market. We need the whole real estate and lending business cleaned up and locked down, not 20% of every $1 squandered to environmentalist green mail, and one more 8-lane freeway snaking out to the exurbs, or some firkwad plan for boutique fuels,
with new AC units and “green” ceiling lighting in every government office building, lorded over by some black ops backroom government “who shall have this” means test.
Otherwise we’re just one more race of aboriginals shoved on the rental reservation, with a bunch of blue coats behind the stockades drinking up our kids’ inheritance.
Just imagine Obama doing a little jig at at Berchtesgaden, and you’re either in The Party, with a little kuchen and a little schnapps, or you’re UnterMenschen who will see no benefit from this Machiavellian 4 Year Plan, other than smaller portions in your food bowl, and a quicker trip to the ovens when your retire without a pension.
Because that’s what this whole Bilderberg Bailout Reich means. Unserer Kampf!
No country has ever deficit-spent its way out of a Depression, not even the Pharoahs.
Posted by: Doug MacArthur | Dec 8 2008 2:09 utc | 11
b 13) Forget the Citi CEO! A rebate has to be universal or it’s an elitist plan. Good for Citi if he doesn’t need it, neither do 10M’s of retired folks with $M’s in the bank. The point is, if you want to help people at the *bottom*, you tax rebate, period. No amount of pork barrel is going to reach them, just look at the Katrina money train!! Whether it gets spent on groceries, utilities and rent (poor people), or socked away in a 401 or a 509, the effect is 1) immediate and 2) stimulus and 3) helps put off credit defaults. As for people who don’t pay income tax, if you mean the black market barter economy, or the undocumented alien economy or the offshore passive investor economy, if they don’t pay in, why should they draw out? And what other means of rebate can reach them? Dropping $100’s from helicopters? Ad absurdum arguments are what Rovians use when they can’t mount a positive counter-response.
The Bush tax breaks were borrowed from future income, they increased Federal debt. My proposal is a tax cut in the form of fixed, not graduated, rebates, which would force government to discard ivory tower white paper crap and fix the damn roads.
Rick 14) Anyone who has worked who is not an undocumented alien or black market barter economy pays FICA, hence has social security hence, if they have social security then they were once a worker, and entitled to a rebate on their taxes.
See response to b) above how a tax rebate sans Congressional pay-it-backward bleed
would bring about a smaller government, and here I’m using reductio ad absurdum to show that government will *never* make itself smaller, ever. We are their cash cow.
The way to fix the existing infrastructure is simply to capitalize it. There are public works departments existent in every level of government, however, they are starved for operating and capital incomes, in favor of more grandiose government like master planning sports stadiums for private franchises, or port facilities for private shipping franchises, or expanding the EPA department to 10,000 staffers, or expanding the power of health and human services and prisons because of matching Fed grants, or expanding DOT paving-for-pork because of matching Fed grants, etc.
If you have ever worked in government, you know public works is at the very bottom,
because government is run like any other corporation, maximum ‘profits’ (personnel, pay, perks and pensions). They don’t give a flying firk about the roads or sewers.
Of course, this entire thread is reductio ad absurdum, just as b)s thesis that CDSs should be declared null and void. 1st class financiers are stealing our taxes to payoff 2nd class government (who might have indicted them) with this public works con job, and 3rd class soon-working children took a $9.2T with 20% interest bleed.
Capiche ‘Vampire Royal’? Capiche ‘English Caste System’? Is that what we all want?! Because at some point very soon, if you do the P&L math, America will cross over to indentured servitude, absent the discovery of cold fusion or some miracle resource. Every penny you have will be taxed to pay the debt the vampire royals paid backward.
Those in EU who shrug their shoulders might recall if the royals succeed, and crush wages, crush human services, crush interest rates, lock down even larger shares of global natural resources, and indenture Chindians for cheap labor and IT, then that pain will visit your shores soon, as surely as the English colonizers sailed into Virginia Dare centuries ago, as natives rent their foreheads and hid their children.
Aufweidersehen, Mumbai calls.
Posted by: Doug M | Dec 8 2008 5:23 utc | 17
Judge for yourself:
If Obama’s somewhere-between-$130B-to-$700B-to$1T public works bailout being bandied around is funded at, say, $500B, capital funding only, that is, “shovel ready”, no administrative overhead, no operations setaside or A/E/P consultant massagenation other than project controls, then immediately $100B will be skimmed off as state/local tax, licenses, fees, bonding, insurance, bid costs and overhead.
Now we have $400B, let’s say it all goes into rebuilding delapidated schools, 100%.
The latest federal public works rehabilitation costs found on OSD CAIG are $275 a square foot in 2002 dollars. Since then, construction materials have gone up 40%, and comprise roughly 40% of the project, so basic cost is ~$330 per square foot.
Hazardous materials removal and remediation comprise ~$25, cross-jurisdictional (school, city, state, Fed) handling $50, extensive green treatments another $55, and high efficiency HVAC about $35. So we’re down to $165/$330th’s of $400B, or $200B for actual square feet. The “load”, that is, occupied usable classroom space as a ratio of entire building area, is approximately 33%, leaving us with $133B.
$133B divided by $330 a square foot is roughly 400,000,000 square feet of actual classroom that can be renovated under the plan. Divided by 600 cities over 50,000 population in 2000 census is 670,000 square feet of renovated classroom, per city.
http://ncbg.org/schools/design_capacity.htm says 40 square feet of classroom per student is average, that’s 16,800 student capacity per city.
Zooming back out again, that’s 10,800,000 students nationwide enjoying renovated schools, at least in the 600 biggest towns. Now comes the “who shall have this”.
There were 75,000,000 students in the US on the 2000 census.
So here’s the final breakdown. There are 25,375 towns in the US in the 2000 census. If you’re lucky enough to live in one of the Big 600 (1 in 40) and lucky enough to be one of those selected for renovated school attendance (1 in 8), then even if Obama spends all $500B renovating schools *already designed and permitted, waiting for funding*, Joe Student has one chance in 320 of attending a renovated school.
There are roughly 165,000,000 working Americans. $500B over ten years to repay the pay-it-backward at guaranteed 10% interest to the Chinese is more than $5,000 per American worker, (and less than 40% of them even have children in school!)
You’ll pay $5000 to give your kid a 1 in 320 shot at attending a renovated school, in the best possible case, provided the entire “incentive” goes to schools already designed, ready to start construction, and no government administative overhead.
With more likely 1:1:1 DOT:GOV:EDU split, and 45% administrative overhead, you’ll be paying $5000 to give your kid a 1 in 2000 shot at attending a renovated school!
Gotta get cracking on that bake sale!
Posted by: Doug M. | Dec 9 2008 3:07 utc | 25
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