Tidbits Quotations
To Accompany the September 8, 2011 edition of Tidbits
Bob Jensen at Trinity University

MSNBC liberal Hard Ball Chris Matthews says that whites who voted for Obama in 2008 but not in 2012 are probably racist. Why is it that liberals play the race card when their hands are going badly?

Kucinich, who in March suggested President Barack Obama’s authorizing of airstrikes on Libya were “an impeachable offense” and sponsored a July measure to defund the military effort there, criticized what he called an evolving rationale for the NATO offensive.
Rep. Dennis Kucinich (D-Ohio), NATO's Libya generals should be hauled to court, sPolitico, "August 23, 2011 ---
According to the dogma of MSNBC's Chris Mathews, Dennis Kucinich is probably racist. If you don't vote for President Obama you're probably racist.

The inspiration of the Libyan war is as much anti-Western as it is anti-Gadhafi . . . The anti-Gadhafi, anti-Western forces that NATO power has brought to apparent victory through an air war and not-so-secret deployment of special forces (so far costing U.S. taxpayers $1 billion) include jihadist forces the U.S. and NATO allies have been fighting for the past decade in Iraq and Afghanistan.
Diana West, Townhall, August 26, 2011 ---

President Obama, this is your army. We are ready to march (against Tea Party gatherings). Let's take these son-of-a-*$#%!out . . .  
Teamsters President Jimmy Hoffa, Jr. --- http://finance.townhall.com/columnists/bobbeauprez/2011/09/06/jimmy_hoffa_on_tea_party_lets_take_these_son-of-a-------_out!
Didn't Sarah Palin get in trouble for much softer targeting that the liberal press blamed for the shooting of Cathy Gifford?
In fairness, President Obama followed the hate-mongering Hoffa to the podium and appealed for people to "just get along." It would not be wise for President Obama to incite "take-out" violence at Tea Party rallies.

Howard Shultz is one of the most progressive Jewish supporters Democratic Party and allegedly supports some Jewish causes. Early on Starbucks provided medical insurance to part-time employees who worked as few as 20 hours per week ---
Starbucks has, however, resisted employee unionization.

Starbucks CEO and Obamacare Supporter Now Decries Law's Small Business Impact ---
Starbucks may well join McDonalds, Burger King, many labor unions, and most states in dropping employee health coverage when Obamacare kicks in.
"Look who's getting out of ObamaCare," by Michelle Malkin, New York Post, May 19, 2011 --- Click Here

September 2011

Dear Starbucks Friend and Fellow Citizen:

I love our country. And I am a beneficiary of the promise of America. But today, I am very concerned that at times I do not recognize the America that I love.

Like so many of you, I am deeply disappointed by the pervasive failure of leadership in Washington. And also like you, I am frustrated by our political leaders' steadfast refusal to recognize that, for every day they perpetuate partisan conflict and put ideology over country, America and Americans suffer from the combined effects of paralysis and uncertainty. Americans can't find jobs. Small businesses can't get credit. And the fracturing of consumer confidence continues.

We are better than this.

Three weeks ago, I asked fellow business leaders to join me in urging the President and the Congress to put an end to partisan gridlock and, in its place, to set in motion an upward spiral of confidence. More than 100 business leaders representing American companies - large and small - joined me in signing a two-part pledge:

First, to withhold political campaign contributions until a transparent, comprehensive, bipartisan debt-and-deficit package is reached that honestly, and fairly, sets America on a path to long-term financial health and security. Second, to do all we can to break the cycle of economic uncertainty that grips our country by committing to accelerate investment in jobs and hiring.

In the weeks since then, I have been overwhelmed by the heartfelt stories of Americans from across the country, sharing their anguish over losing hope in the strongest and most galvanizing force of all - the American Dream. Some feel they have no voice. Others feel they no longer matter. And many feel they have been left behind.

We cannot let this stand.

Please join other concerned Americans and me on a national call-in conversation on Tuesday September 6th hosted by "No Labels," a nonpartisan organization dedicated to fostering cooperative and more effective government. To learn more about the forum and the pledges, visit www.upwardspiral2011.org 

America is at a fragile and critical moment in its history. We must restore hope in the American Dream. We must celebrate all that America stands for around the world. And while our Founding Fathers recognized the constructive value of political debate, we must send the message to today's elected officials in a civil, respectful voice they hear and understand, that the time to put citizenship ahead of partisanship is now.

Yours is the voice that can help ignite the contagious upward spiral of confidence that our country desperately needs.

With great respect,

Starbucks CEO, Howard Schultz [mailto:Starbucks@e.Starbucks.com]

chief executive officer, Starbucks Coffee Company


"Washington Is Eliminating Red Tape:  New reforms will save Americans billions without sacrificing public health or safety," by Cass Sunstein, The Wall Street Journal, August 25, 2011 ---

Early this year, President Obama ordered an unprecedentedly ambitious government-wide review of existing federal regulations, emphasizing that we must "measure, and seek to improve, the actual results of regulatory requirements." He directed agencies and departments to produce preliminary plans to streamline those requirements and eliminate red tape.

Last May, agencies released over two dozen preliminary plans, identifying reforms that will save billions of dollars. At the same time, agencies asked the public to evaluate the preliminary plans, identify new reforms, and participate in creating a 21st-century regulatory system that protects public health and safety while also promoting economic growth and job creation.

Today I can announce that agencies are releasing their final plans, including hundreds of initiatives that will reduce costs, simplify the system, and eliminate redundancy and inconsistency.

We have already achieved a great deal. Significant burden-reducing rules have been finalized or publicly proposed by the Department of Labor, the Environmental Protection Agency and the Department of Transportation—and they are expected to save more than $4 billion over the next five years.

Many of the reforms focus on small business. For example, the Department of Defense recently issued a new rule to accelerate payments on contracts to as many as 60,000 small businesses, thus improving their cash flow in an economically difficult time. The Small Business Administration is adopting a single electronic application to reduce the paperwork burden now imposed on certain lenders, which in turn will benefit borrowers who seek relatively small amounts of capital to grow and succeed.

The reforms announced today span a wide range:

• The Department of Health and Human Services will soon propose to remove unnecessary regulatory and reporting requirements now imposed on hospitals and other health-care providers, potentially saving $4 billion over the next five years.

• The Department of Labor is finalizing a rule to simplify and improve hazard warnings for workers, likely saving employers more than $2.5 billion over the next five years without compromising safety.

• The Department of Transportation is proposing a rule that will eliminate unnecessary regulation of the railroad industry, saving a total of $340 million or more.

• The Environmental Protection Agency will soon propose a rule to reduce burdens on hazardous-waste generators by moving from paper-based to electronic reporting, saving up to $126 million annually.

• By the end of this year, the Internal Revenue Service will eliminate 55 million hours in annual paperwork burdens by consolidating reporting requirements and streamlining various tax forms.

Today's plans explicitly recognize that the regulatory look-back is not a one-time endeavor. Agencies will continue to revisit existing rules, asking whether they should be updated, streamlined or repealed. And they will do so in close consultation with the public. Ideas are welcome at any time.

The president has directed agencies to give careful consideration to both benefits and costs, to promote public input and listen to stakeholders, to simplify and harmonize rules, to select approaches that promote innovation, and to consider flexible approaches that reduce burdens and maintain freedom of choice.

Building on this direction, we are announcing today that Chief of Staff William Daley has given new instructions to the cabinet. He has asked cabinet members to minimize regulatory costs, avoid imposing excessive regulatory burdens, and prioritize regulatory actions that promote economic growth and job creation.

Today's cost-reducing reforms complement, and do not displace, our efforts to safeguard public safety and our environment. Just this month, the Department of Transportation and the Environmental Protection Agency finalized a historic rule to reduce fuel costs and air pollution from heavy-duty trucks, thus promoting energy security and public health while saving American businesses up to $50 billion in fuel costs. The Federal Aviation Administration continues to take steps to ensure that air travel is safe. The Department of Agriculture and the Food and Drug Administration work every day to protect Americans from unsafe food.

Continued in article

"Young and Jobless," by Catherine Rampell, Economix Blog in the New York Times, August 25, 2011 ---

Jensen Comment
Note how the unemployment statistics are badly understated as of late because so many unemployed young people have simply stopped trying to get a job. Many are going to school, but many are also simply living with parents and wasting what should be the most opportune times of their lives.

Minimum wage levels most certainly have led to dramatic declines in teen employment during times when employers are struggling with revenue declines. Whereas minimum wages are important to low-skilled workers seeking to raise families on low incomes, minimum wage increases can be job killers for teens seeking part-time work and school vacation work. Perhaps more relief should be given to employers who can demonstrate what portion of work on the job is devoted to raising skill levels. Perhaps employers should be allowed to pay less than minimum wage for portions of job time devoted to vocational training.

Many economists argue that minimum wage hikes are not as destructive to the numbers hired as business firms argue --- Click Here
But these studies focus heavily on industries where jobs are not easily exported to lower wage countries, especially fast food hiring. The argument is that the numbers hired at minimum wage in the fast food industry will not dramatically increase if the minimum wage is lowered. This may well be true, but liberal economists tend to shy away from industries like the calling industry where call operators in the U.S. tend to lose their minimum wage jobs to India even though customers would rather have call operators that they can better understand in English.

This happened to me as a customer of both Sears and Dell. I now have to deal with some operators in India that are hard for me to understand on the phone.

"Was Buffett Right? Do Workers Pay More Tax than Their Bosses?," by Roberton Williams, Tax Policy Center, August 23, 2011 --- Click Here

. . .

Warren Buffett may be right when he says that high-income taxpayers could pay more, especially given the extremely rapid rate of income growth at the top of the distribution. And he’s certainly correct when he says that the low tax rate on investment income cuts his tax bill well below that of many Americans. But he’s off base when he suggests that all high-income taxpayers pay a smaller share of their income in taxes than their middle-income coworkers.

Continued in article

Jensen Comment
Especially note the graph in this article.

"Cheney's Book Is More Than Meets the Eye" (read that as meaning more than the eye sees on television) ---
This is what the liberal press is finding so frustrating about reporting on some previously unknown facts in the book --- like what was really happening with Cheney's Haliburton Compensation.

But perhaps the most striking revelation in the new Treasury data is that the ownership of these larger pass throughs — particularly subchapter S corporations — is highly concentrated among high-income taxpayers. If the goal is to help small business, a high-end rate cut is surely way off target.

"Should We Raise Tax Rates On Wealthy Employers?" by Martin A. Sullivan, Tax Analyst, 2011 ---

. . .

How would preventing the return of the top rates to 36 and 39.6 percent affect the overall economy? From the perspective of Keynesian demand-side economics, keeping rates low would provide some stimulus, but it would be one of the least effective stimulus policies we could choose. As a tool for encouraging supply-side economic growth, it provides benefits, because a less progressive rate structure is always better for long term growth. However, determining the size of these benefits — like most issues in empirical economics — is highly uncertain, and economists’ conclusions always seem to align with their political affiliations. Whatever the size of the benefits, they must be weighed against the detrimental effects of a larger deficit (if in fact the increased revenue would be used for deficit reduction) and age-old concerns about tax fairness.

. . .

Inefficient Employment Incentive
The left side of Figure 1 shows business income of high-bracket taxpayers as a percentage of all business income. High-bracket taxpayers receive 52 percent of all passthrough employer income. Although there are many differences in technical details, this 52 percent figure using new Treasury data is conceptually similar to the 48 percent figure cited by Hassett and Viard. This number tells us nothing about the efficiency of rate cuts for job creation at pass throughs. For that information we need to look at the right side of Figure 1 and the bottom of the first column of Table 2. They show business income of high bracket taxpayers as a percentage of all high bracket income. (High-bracket income here excludes capital gain and dividend income subject to preferential rates.) Only 17 percent of the income of wealthy taxpayers

. . .

The refined Treasury data used in Figure 2 do not change the basic conclusion. Most of the tax effect of the high-end rate change has no direct impact on pass through employers. The gross inefficiency of high-end rate reduction as a job creation policy provides the administration with an opportunity. As an alternative to the Republican proposal to extend rate cuts for all income tax payers, it can propose almost any sort of tax relief tied to wages paid. Few economists would be able to deny that an employment tax credit is far better targeted, and therefore a far more effective job creation mechanism, than high-end rate cuts.

. . .

The most important goal of Keynesian economic policy is to stimulate aggregate demand when the economy is in recession. This can be done by increasing government spending or cutting taxes. For tax cuts to be effective, taxpayers must use their tax benefits to buy more goods and services. Of all possible types of tax cuts, those for the wealthy are least effective because the rich are more likely to save than spend. Keynesian stimulus is a policy focused on increasing employment in the short run. A rate cut for the wealthy is probably the last place politicians who are clamoring for rapid job creation should be looking.

Supply-side economics provides a far more flattering view of high-end rate cuts. Lower tax rates provide individuals more incentive to work, save, and invest. Because of the enormous political implications involved, the size of these effects has always been and always will be the subject of dispute. But we can say definitively that whatever the size of the effects, it is better for long-term economic growth to provide rate cuts for high income households than low-income households. High-end rate cuts make tax rates more equal, and equalizing tax rates always provides a more efficient allocation of resources. Moreover, for the same reason that high-end rate cuts are bad from a demand-side perspective, they are good from a supply-side perspective: Rich people are more likely to save. And saving is the key to long-term productivity growth and competitiveness.

But that’s not the end of the supply-side story. Now more than ever we must keep in mind the positive supply-side effects of deficit reduction. Tax increases on the wealthy or on anybody, if they are used to reduce the deficit, increase public saving.

Supply-side growth is fueled by saving irrespective of whether it is from public or private sources. In a 2003 study mandated by a Republican-controlled House of Representatives, the JCT reported that the positive supply-side growth effects of rate cuts were offset by the negative supply-side effects of an enlarged deficit. (See ‘‘Mandated JCT Report Says House Bill May Hurt Economy,’’ Tax Notes, May 19, 2003, p. 948, Doc 2003-12563, or 2003 TNT 98-7; and ‘‘Macroeconomic Analysis of H.R. 2, The ‘Jobs and Growth Reconciliation Tax Act of 2003,’ Prepared by the Staff of the Joint Committee on Taxation,’’ Congressional Record, House of Representatives (May 8, 2003), Doc 2003-11771 or 2003 TNT 91-83.)

 More on Small Business
Beside the facts presented so far, the Treasury report sheds a lot of new light on the size distribution of pass through businesses. As we have already noted, the study shows us that a lot of pass through businesses are not small. But perhaps the most striking revelation in the new Treasury data is that the ownership of these larger pass throughs — particularly subchapter S corporations — is highly concentrated among high-income taxpayers. If the goal is to help small business, a high-end rate cut is surely way off target. But that’s enough for now. We will share more results from the new Treasury study on the smallness of passthrough business in our next article.


Also see the Becker and Posner commentaries (note especially the comments that follow each article) at

"Gov. Deval Patrick ignores real victims Michael Graham," by Michael Graham, Boston Herald, August 25, 2011 ---

. . .

Even after all this, Patrick rejects Secure Communities. He still believes that when Guaman was arrested in 2008 for assault, breaking and entering, and resisting arrest, Massachusetts did the right thing by not handing him over to immigration authorities. By releasing him back onto the streets of Milford, where he could continue to be a threat to his neighbors.

. . .

What the statement doesn’t say is that Patrick would refuse to allow Massachusetts to send Guaman’s fingerprints to Immigration and Customs Enforcement the first time they arrested him, or the many times Milford cops arrested, detained or answered calls to his apartment afterwards.

. . .

“Some time ago.” Perhaps last month. That’s when (Governor) Patrick was in Milford for a town-hall-style forum. Angry locals confronted him with signs, like “When will you secure OUR community?” They begged him then to end this ridiculous policy, told him of residents killed by illegal immigrants in the recent past.

What did Patrick tell them?

We don’t need Secure Communities.” All it does is “give the impression that we are doing something.”

I wonder if Patrick would be willing to go back today and tell Matt’s parents that, even after the loss of their son, we still don’t need it.

The most disturbing part of this story is that it is so common. A year ago I wrote a column about a 4-year-old Springfield girl raped by an illegal immigrant enjoying sanctuary. The very same weekend Matt Denice died in Milford, a 4-year-old California boy was crushed to death during a hit-and-run by an illegal immigrant with two previous arrests.

Continued in article

Jensen Comment
This is the same Governor who appointed a Parole Board that released a convict actually sentenced to three life sentences. The first thing the convict did upon release is kill a cop during a robbery.

Even Massachusetts does not deserve Cadillac Patrick who demanded a State supplied Cadillac when he first became Governor.

"The Clinton Surplus Myth," by Craig Steiner, Townhall, August 22, 2011 ---

Time and time again, anyone reading the mainstream news or reading articles on the Internet will read the claim that President Clinton not only balanced the budget, but had a surplus. This is then used as an argument to further highlight the fiscal irresponsibility of the federal government under the Bush administration. 

The claim is generally made that Clinton had a surplus of $69 billion in FY1998, $123 billion in FY1999 and $230 billion in FY2000 
. In that same link, Clinton claimed that the national debt had been reduced by $360 billion in the last three years, presumably FY1998, FY1999, and FY2000--though, interestingly, $360 billion is not the sum of the alleged surpluses of the three years in question ($69B + $123B + $230B = $422B, not $360B).

While not defending the increase of the federal debt under President Bush, it's curious to see Clinton's record promoted as having generated a surplus. It never happened. There was never a surplus and the facts support that position. In fact, far from a $360 billion reduction in the national debt in FY1998-FY2000, there was an increase of $281 billion.

Verifying this is as simple as accessing the 
U.S. Treasury (see note about this link below) website where the national debt is updated daily and a history of the debt since January 1993 can be obtained. Considering the government's fiscal year ends on the last day of September each year, and considering Clinton's budget proposal in 1993 took effect in October 1993 and concluded September 1994 (FY1994), here's the national debt at the end of each year of Clinton Budgets:

Continued in article

"The Great Recession and Government Failure:  When comparing the performance of markets to government, markets look pretty darn good," by Nobel Laurete Gary Becker, The Wall Street Journal, September 2, 2011 ---

The origins of the financial crisis and the Great Recession are widely attributed to "market failure." This refers primarily to the bad loans and excessive risks taken on by banks in the quest to expand their profits. The "Chicago School of Economics" came under sustained attacks from the media and the academy for its analysis of the efficacy of competitive markets. Capitalism itself as a way to organize an economy was widely criticized and said to be in need of radical alteration.

Although many banks did perform poorly, government behavior also contributed to and prolonged the crisis. The Federal Reserve kept interest rates artificially low in the years leading up to the crisis. Fannie Mae and Freddie Mac, two quasi-government institutions, used strong backing from influential members of Congress to encourage irresponsible mortgages that required little down payment, as well as low interest rates for households with poor credit and low and erratic incomes. Regulators who could have reined in banks instead became cheerleaders for the banks.

This recession might well have been a deep one even with good government policies, but "government failure" added greatly to its length and severity, including its continuation to the present. In the U.S., these government actions include an almost $1 trillion in federal spending that was supposed to stimulate the economy. Leading government economists, backed up by essentially no evidence, argued that this spending would stimulate the economy by enough to reduce unemployment rates to under 8%.

Such predictions have been so far off the mark as to be embarrassing. Although definitive studies are not yet available about the stimulus package's overall effects on the American economy, most everyone agrees that it was badly designed and executed. What the stimulus did produce is a sizable expansion of the federal deficit and debt.

The misdiagnosis of widespread market failure led congressional leaders, after the 2008 election, to propose radical changes in financial institutions and, more generally, much wider regulation and government control of companies and consumer behavior. They proposed higher taxes on upper-income families and businesses, and extensive controls over executive pay, as they bashed "billionaire" businessmen with private planes and expensive lifestyles. These political leaders wanted to reformulate antitrust policies away from efficiency, slow the movement by the U.S. toward freer trade, add many additional regulations in the medical-care sector, levy big taxes on energy emissions, and cut opportunities to drill for oil and other fossil fuels.

Congress did manage to pass badly designed laws concerning financial markets, consumer protection and medical care. Although regulatory discretion failed leading up to the crisis, Congress nevertheless added to the number and diversity of federal regulations as well as to the discretion of regulators. These laws and the continuing calls for additional regulations and taxes have broadened the uncertainty about the economic environment facing businesses and consumers. This uncertainty decreased the incentives to invest in long-lived producer and consumer goods. Particularly discouraged was the creation of small businesses, which are a major source of new hires.

The expansion of government resulting from the stimulus and other government programs contributed to rising deficits and growing public debt just when the U.S. faced the prospect of big increases in future debt due to built-in commitments to raise government spending on entitlements. Social Security, Medicaid and Medicare already account for about 40% of total federal government spending, and this share will grow rapidly during the next couple of decades unless major reforms are adopted.

A reasonably well-functioning government would try to sharply curtail the expected growth in entitlements, but such reform is not part of the budget deal between Congress and President Obama that led to a higher debt ceiling. Nor, given the looming 2012 elections, is such reform likely to be addressed seriously by the congressional panel set up to produce further reductions in federal spending.

It is a commentary on the extent of government failure that despite the improvements during the past few decades in the mental and physical health of older men and women, no political agreement seems possible on delaying access to Medicare beyond age 65. No means testing (as in Rep. Paul Ryan's budget roadmap) will be introduced to determine eligibility for full Medicare benefits, and most Social Security benefits will continue to start for individuals at age 65 or younger.

In a nutshell, there is little political will to reduce spending on entitlements by limiting them mainly to persons in need.

State and local governments also greatly increased their spending as tax revenues rolled in during the good economic times that preceded the collapse in 2008. This spending included extensive commitments to deferred benefits that could not be easily reduced after the recession hit, especially pensions and health-care benefits to retired government workers.

Unless states like California and Illinois, and cities like Chicago, take drastic steps to reduce their deferred spending, their problems will multiply as this spending grows over time. A few newly elected governors, such as Scott Walker in Wisconsin, have pushed through reforms to curtail the power of unionized state employees. But most other governors have been afraid to take on the unions and their political supporters.

Numerous examples illustrate government failure in other countries as well. Highly publicized are the troubles facing Greece, Portugal, Ireland, Italy and Spain that are mainly due to the growth in spending and debt of their governments prior to the 2008 crisis. Perhaps the governments of these countries, and the banks that bought their debt, expected Germany and other rich members of the European Union to bail them out if they got into trouble. Whatever the explanation, the reckless behavior by these governments will greatly harm businesses and consumers in their countries along with taxpayers of countries coming to their rescue.

The traditional case for private competitive markets goes back to Adam Smith (and even earlier writers). It is mainly based on abundant evidence that most of the time competitive markets work quite well, usually much better than government alternatives. The main reason is not that individuals in the private sector are intrinsically better than government bureaucrats and politicians, but rather that competitive pressures discipline market behavior much more effectively than government actions.

The lesson is that it is crucial to consider whether government regulations and laws are likely to improve rather than worsen the performance of private markets. In an article "Competition and Democracy" published more than 50 years ago, I said "monopoly and other imperfections are at least as important, and perhaps substantially more so, in the political sector as in the marketplace. . . . Does the existence of market imperfections justify government intervention? The answer would be no, if the imperfections in government behavior were greater than those in the market."

Continued in article

"A Value-Added Tax Fuels Big Government:  In Europe the VAT hasn't substituted for income taxation. It's merely added to the tax burden," by Ernest S. Christian and Gary Robbins, The Wall Street Journal, August 24, 2011 ---

Jensen Comment
It's hard to get extreme liberals and extreme conservatives to agree on much of anything, but one thing they equally despise as the VAT tax. But they hate it for different reasons. Conservatives hate it because it raises prices and reduces demand for products and services. Liberals hate it because, like sales taxes in general, the VAT tax is regressive in that prices are higher for the poor as well as the rich.

I personally am an advocate of the VAT tax. At a minimum it should replace the corporate income tax which simply is not working in the United States. The corporations making the most profits, like General Electric, are paying no corporate income taxes. I like the VAT tax for the same reason business firms hate it --- it's very easy and cheap to collect just as the sales tax is much easier to collect than income taxes and property taxes.

The conservative protests that a VAT tax will simply fuel bigger government are arguable. Congress could both reduce government and collect a VAT tax to reduce the some of the need for borrowing from China and elsewhere in the world. The liberal protests that it is regressive are hard to refute. But there are steps that can be taken just as many states now take some steps to make sales taxes less regressive. And since nearly half the taxpayers in the United States do not pay any income tax, I think it's time to force people at all income levels to pay for some of the government services that benefit them personally. For example, even the poor people in Canada pay something towards basic services such as health care.

Marginal Tax Rates --- http://www.econlib.org/library/Enc/MarginalTaxRates.html

"Nouriel 'Dr. Doom' Roubini: ‘Karl Marx Was Right’,"  International Business Times
As summarized by Jim Mahar on August 18, 2011 ---

"Karl Marx had it right," Roubini said in an interview with wsj.com. "At some point capitalism can self-destroy itself. That's because you can not keep on shifting income from labor to capital without not having an excess capacity and a lack of aggregate demand. We thought that markets work. They are not working. What's individually rational...is a self-destructive process.

Roubini added absent organic, strong GDP growth -- which can increase wages and consumer spending -- what's needed is large fiscal stimulus, agreeing with another high-profile economist, Nobel Prize-winner Paul Krugman, that, in the case of the United States, the $786 billion fiscal stimulus approved by Congress in 2009 was too small to create the aggregate demand necessary to advance the U.S. economic recovery to a self-sustaining expansion."

Jensen Comment
What Roubini and Krugman fail to mention is the inflationary destruction that comes with flooding economic stimulus money in the economy. If this money is simply printed without borrowing or taxing, the impact is highly inflationary such that workers getting $500 per hour may be getting a dire poverty wage. A million Zimbabwe dollars will no longer by one chicken egg.

Taxation at the level needed for our salvation will simply destroy the hoped for gains in GDP attributed to rising consumer demand.

Borrowing from Asia and elsewhere in hundreds of trillions of dollars creates destructive government debt burdens where current interest payments plus entitlement obligations coming due for Social Security, Medicare, Medicaid, Military Pensions, etc. wipe out 98% or more of the Federal budget.

The ultimate solution, as suggested by Nobel Economist Vernon Smith, will probably be a less drastic inflationary solution. But the Roubini and Krugman flooding of the economy with dollars will, in my opinion, hasten explosive inflation that can at least be delayed by a combination of taxation and painful reduced government spending rather than explosive government stimulus spending under the Zimbabwe approach to economic recovery.  The ranting Roubini and Krugman should both be exported to Zimbabwe.

Communism may well be the answer. I just wish there was one communism success that could give us hope for that solution.Communism seems to depend upon hypothetical humans that have not yet evolved.

"Camden Pays Students $100 Each to Not Skip School:  Anti-truancy program pays Camden high school students to go to school," by Teresa Masterson, NBC Philadelphi, August 24, 2011 ---

To receive the promised $100, each of the 66 targeted students must attend classes as well as conflict-resolution and anger-management workshops until Sept. 30.

Not everyone was happy about the pay-off program at Tuesday night’s school board meeting, according to the Inquirer. Board member Sean Brown voiced his anger that he just learned of the truancy program.

Former board member Jose Delgado said that it was “outrageous” and it sends the wrong message to kids, reports the Inquirer.

Continued in article

Jensen Comment
Many things are wrong with this, not the least of which is the timing. The payoffs should come at the end of the year so that the kids do not threaten truancy for another $100 every three months during the school year. Better yet the $100 should be paid on the basis of performance improvement rather than just dozing in class.

Worst of all this is an incentive for students not receiving the payoffs to become worse truants and get in on the action.

Also some may get the clever idea that they should also be paid $100 per day not to rob business establishments.

There was a time when getting a school education was considered a privilege.

What happened to the good old days?

"Can the World Still Feed Itself? Yes, says Nestle's chairman Peter Brabeck-Letmathe, but not if we burn food for fuel, fear genetic advances and fail to charge for water," The Wall Street Journal, September 5, 2011 ---

As befits the chairman of the world's largest food-production company, Peter Brabeck-Letmathe is counting calories. But it's not his diet that the chairman and former CEO of Nestlé is worried about. It's all the food that the U.S. and Europe are converting into fuel while the world's poor get hungrier.

"Politicians," Mr. Brabeck-Letmathe says, "do not understand that between the food market and the energy market, there is a close link." That link is the calorie.

The energy stored in a bushel of corn can fuel a car or feed a person. And increasingly, thanks to ethanol mandates and subsidies in the U.S. and biofuel incentives in Europe, crops formerly grown for food or livestock feed are being grown for fuel. The U.S. Department of Agriculture's most recent estimate predicts that this year, for the first time, American farmers will harvest more corn for ethanol than for feed. In Europe some 50% of the rapeseed crop is going into biofuel production, according to Mr. Brabeck-Letmathe, while "world-wide about 18% of sugar is being used for biofuel today."

In one sense, this is a remarkable achievement—five decades ago, when the global population was half what it is today, catastrophists like Paul Ehrlich were warning that the world faced mass starvation on a biblical scale. Today, with nearly seven billion mouths to feed, we produce so much food that we think nothing of burning tons of it for fuel.

Or at least we think nothing of it in the West. If the price of our breakfast cereal goes up because we're diverting agricultural production to ethanol or biodiesel, it's an annoyance. But if the price of corn or flour doubles or triples in the Third World, where according to Mr. Brabeck-Letmathe people "are spending 80% of [their] disposable income on food," hundreds of millions of people go hungry. Sometimes, as in the Middle East earlier this year, they revolt.

"What we call today the Arab Spring," Mr. Brabeck-Letmathe says over lunch at Nestle's world headquarters, "really started as a protest against ever-increasing food prices."

Mr. Brabeck-Letmathe has extensive experience at the intersection of food, politics and development. He spent most of his first two decades at Nestlé in Latin America. In 1970, he was posted to Chile, where Salvador Allende's socialist government was threatening to nationalize milk production, and Nestlé's Chilean operations along with it. He knows that most of the world is not as fortunate as we are.

"There is a huge difference," he says, "between how we live this crisis and what the reality of today is for hundreds of millions of people, who we have been pushing back into extreme poverty with wrong policy making." First there's the biofuels craze, driven by concerns over energy independence, oil supplies, global warming and, ironically, Mideast political stability.

Add to that, especially in Europe, a paralyzing fear of genetically modified crops, or GMOs. This refusal to use "available technology" in agriculture, Mr. Brabeck-Letmathe contends, has halted the multi-decade rise in agricultural productivity that has allowed us, so far, to feed more mouths than many people believed was possible.

Then there is demographics. Recent decades have seen "the creation of more than a billion new consumers in the world who have had the opportunity to move from extreme poverty into what we would call today a moderate middle class," thanks to economic growth in places like China and India. This means a billion people who have "access to meat" for the first time, Mr. Brabeck-Letmathe says.

"And the demand for meat," he says, "has a multiplier effect of 10. You need 10 times as much land, 10 times as much [feed], 10 times as much water to produce one calorie of meat as you do to have one calorie of vegetables or grain." Even so, we are capable of satisfying this increased demand—if we choose to. "If politicians of this world really want to tackle food security," Mr. Brabeck-Letmathe says, "there's only one decision they have to make: No food for fuel. . . . They just have to say 'No food for fuel,' and supply and demand would balance again."

If we don't do that, we can never hope to square the drive for biofuels with the world's food needs. The calories don't add up. "The energy market," Mr. Brabeck-Letmathe argues, "is 20 times as big, in calories, as the food market." So "when politicians say, 'We want to replace 20% of the energy market through the food market,'" this means "we would have to triple food production" to meet that goal—and that's before we eat the first kernel of what we've grown.

Even if we could pull this off, we will never get there by turning our backs on genetically modified crops and holding up "organic" food as the new gold standard of safety, purity and health. Organic production is all the rage in the rich West, but we can't "feed the world with this stuff," he says. Agricultural productivity with organics is too low.

"If you look at those countries that have introduced GMOs," Mr. Brabeck-Letmathe says, "you will see that the yield per hectare has increased by about 30% over the past few years. Whereas the yields for non-GMO crops are flat to slightly declining." And that gap, he says, "is a voluntary gap. . . . It's just a political decision".

Continued in article

"Yes, We Can Do Stimulus Without Adding Debt. Here’s How," by Robert Shiller, The New Republic, August 29, 2011 ---

. . .

(My colleague Martin Shubik, now an emeritus professor of economics at Yale, has proposed a sustainable solution to this latter problem—namely, a Federal Employment Reserve Authority, a permanent new government agency that would continually be in the business of creating a list of public works projects that are ready to go should there ever be a steep economic downturn. It would resemble a federal agency created in 1941, the Public Work Reserve, which was created to address the risk that the U.S. economy might fall into depression again after the economic stimulus of wartime spending was over.)

The essential idea, again, would be to raise taxes and raise expenditures, simply for the duration necessary to push us out of our current bad equilibrium. For plenty of policymakers, the phrase “tax-and-spend” has become a four-letter word, but it might just offer the optimal solution to our present crisis.

Jensen Comment
Professor Shiller should know better than to propose such a simplistic, costly, and virtually useless WPA solution. Roosevelt's New Deal WPA was a much larger public works effort. When it started unemployment was 18%. When it ended, unemployment was still 18% and would've stayed their if World War II had not come along to put people to work, largely at the expense of the Treasuries of European nations desperately in need of ammunition, tanks, guns, planes, ships, food, etc.

And concluding that Public Works Reserve made a significant dent in post-war unemployment is a joke. The program was terminated in 1946 when World War II ended. What did it do for post-war unemployment?

I am in favor of raising taxes at all income levels with progressively higher increases for higher income people. But spending these dollars on WPA projects is not the answer to reducing unemployment. Instead the dollars would be better spent with transfer payments to business firms that, as part of the deal, spend the money on job creation and training of unskilled workers who make up the lion's share of the unemployment rolls.

"A Short Primer on the National Debt:  With a return to 1990s growth rates, the debt-to-GDP ratio could drop to 56.7%, about where it was in 2000, in just one decade," by John Steele Gordon, The Wall Street Journal, August 29, 2011 ---

With the national debt certain to be a front-and-center issue in the 2012 campaign, it is important to understand the true measure of its size. That size seems to vary considerably in news reports. Some news organizations use the debt held by the public, others use total debt. Still others report total future liabilities of the federal government, without making clear what, exactly, that means.

So, a few definitions. The total national debt of the United States is the sum of all federal bills, notes and bonds that have been issued by the Treasury and not yet redeemed. The publicly held debt is the sum of the Treasury securities held by individuals, financial institutions and foreign governments. (That's not just the Chinese, by the way. Both Great Britain and Japan are also major holders of U.S. debt, as are many other countries in lesser amounts.)

The intra-governmental debt is the sum of Treasury bonds held by agencies of the federal government, principally the so-called Social Security Trust Fund. The liabilities equal the future pensions, health care, Social Security payments, etc., that are promised under current legislation.

But while the Treasury securities bear the full faith and credit of the United States and any failure to pay the interest or redeem the principal in a timely fashion would be a default, the liabilities are liabilities only so long as current law remains unchanged. If, for instance, Congress were to adjust the formula by which Social Security cost-of-living increases were calculated or change the age of eligibility, future federal liabilities would shrink by trillions of dollars instantly.

Should the intra-governmental debt be counted when discussing the national debt? I think the answer is yes. As the Social Security surplus disappears (it did, at least temporarily, in 2010) as the baby boomers increasingly retire, the Treasury will be asked to redeem more and more of these federal bonds.

Congress will then have three options: cut spending elsewhere, raise taxes, or borrow the money in the bond market, thus converting the intra-governmental debt into publicly held debt. The last of the three options is the only plausible one and so the intra-governmental debt should be counted as though it were publicly held debt, as that's exactly what it will be in the fullness of time.

In absolute numbers, the total public debt as of Aug. 11 was $9.924 trillion, and the intra-government debt was $4.666 trillion, for a total of $14.587 trillion. That's well over 300 million times the country's median household income. Stacked as dollar bills, it would reach 920,953 miles high, almost four times as far from Earth as the moon.

But while these numbers are fun to play with, they don't mean much. It's the debt's size relative to gross domestic product that matters, just as personal debts must be measured against a person's income before they can be properly evaluated. The GDP of the United States was $15.003 trillion at the end of the first quarter in 2011. That makes the public debt equal to 66.1% of GDP and the intra-governmental debt 31.1%. Total debt is now 97.2% of GDP and climbing rapidly.

And it's the climbing rapidly part that is worrisome, not the debt's current size relative to GDP. Indeed, the debt has been substantially higher by that measure in earlier times. In 1946, in the immediate aftermath of World War II, it was 129.98% of GDP. But while the debt had increased enormously during the war (it had been 50% of a much smaller GDP in 1940), it did not increase substantially over the next 15 years. It was $269 billion in 1946 and $286 billion in 1960. The American economy grew so much in those years that the debt, while slightly up in absolute terms, was down to only 58% of GDP by 1960.

The debt grew to $370 billion in the next decade, but again economic growth (and, towards the end of the 1960s, inflation) continued to reduce it relative to GDP. In 1970 it was a mere 39%, the lowest it had been since the depths of the Great Depression. And while the debt nearly tripled in the 1970s (to $909 billion), the raging inflation of that decade caused the debt to continue to decline to 34.5% of GDP.

When the Federal Reserve under Paul Volcker broke the back of the 1970s inflation, the debt relative to GDP began to soar. Why? Because Washington continued to increase spending faster than government revenues increased (and revenues increased a whopping 99.4% in the 1980s thanks to the great boom that began in 1983). The debt was 58.15% of GDP in 1990, a full 24 percentage points above its 1980 low. It continued to increase dramatically in the early 1990s, reaching 68.91% of GDP in 1994.

But then a Republican Congress was swept into power that year, the first time the GOP controlled both houses of Congress since 1954, and President Clinton tacked sharply to the center. In the next six years, while revenues increased 61%, federal outlays increased only 22%. The years 1998-2000 actually showed the first surpluses in the federal budget in 30 years. And the debt, relative to GDP, declined between 1994 and 2000 to 57.3% from 68.91%.

That decline ended in 2001 following the collapse of the dot-com bubble and rising unemployment in the resulting recession. By 2003 the debt-to-GDP ratio had risen to 61.7%. Many blame the Bush tax cuts for adversely impacting federal revenues, causing the debt to spiral upwards. But that is just not true. Federal revenues declined by almost 12% in the early years of the decade, but when the tax cuts fully kicked in in 2003, the economy began to grow strongly again and federal revenues increased 44% in the next four years, while unemployment fell to 4.2% from 6.2%. Federal outlays in those four years increased by only 26.4%, and while the debt-to-GDP ratio increased to 64.8% by 2007, that was still well below what it had been in 1994.

Only with the severe recession that officially began in mid-2007 did the debt-to-GDP ratio begin to soar once more. It reached 67.7% by Oct. 1, 2008, near the end of the Bush administration. A year later, under President Obama, it was at 84.4%, a year later still 93.8%. It is headed quickly towards 100% and beyond without fundamental change in how Washington handles the public fisc.

But a president and a Congress committed to reforming Washington's ways face no insuperable problem getting the debt under control. No one expects the United States to pay off its debt (as we did in the administration of Andrew Jackson, the only time a major country has ever paid off its national debt). Even in a best-case scenario, the absolute size of the debt will not get smaller. But if we can summon the necessary political will, we can dramatically affect the measure of the debt burden that matters: the debt-to-GDP ratio.

Continued in article

Bob Jensen's threads on the subprime crisis ---

"Yes, We Can Do Stimulus Without Adding Debt. Here’s How," by Robert Shiller, The New Republic, August 29, 2011 ---

. . .

(My colleague Martin Shubik, now an emeritus professor of economics at Yale, has proposed a sustainable solution to this latter problem—namely, a Federal Employment Reserve Authority, a permanent new government agency that would continually be in the business of creating a list of public works projects that are ready to go should there ever be a steep economic downturn. It would resemble a federal agency created in 1941, the Public Work Reserve, which was created to address the risk that the U.S. economy might fall into depression again after the economic stimulus of wartime spending was over.)

The essential idea, again, would be to raise taxes and raise expenditures, simply for the duration necessary to push us out of our current bad equilibrium. For plenty of policymakers, the phrase “tax-and-spend” has become a four-letter word, but it might just offer the optimal solution to our present crisis.

Jensen Comment
Professor Shiller should know better than to propose such a simplistic, costly, and virtually useless WPA solution. Roosevelt's New Deal WPA was a much larger public works effort. When it started unemployment was 18%. When it ended, unemployment was still 18% and would've stayed there if World War II had not come along to put people to work, largely at the expense of the Treasuries of European nations desperately in need of ammunition, tanks, guns, planes, ships, food, etc.

And concluding that Public Works Reserve made a significant dent in post-war unemployment is a joke. The program was terminated in 1946 when World War II ended. What did it do for post-war unemployment?

I am in favor of raising taxes at all income levels with progressively higher increases for higher income people. But spending these dollars on WPA projects is not the answer to reducing unemployment. Instead the dollars would be better spent with transfer payments to business firms that, as part of the deal, spend the money on permanent job creation and training of unskilled workers who make up the lion's share of the unemployment rolls. The government can also do much more to make U.S. products and services more competitive in global markets, including stimulating growth in energy and food products where we have some comparative advantages.

It doesn't do a whole lot of long-run good to put school teachers and librarians in hard hats on road repair projects. Perhaps they have a better future as job trainers in industries until the economy recovers to a point where our school systems can once again grow with the economy.

At the same time we should support President Obama's efforts to reduce government spending while we raise taxes.


“Dear President (all italics mine) Castro,” she wrote on September 29, 1998, “I am writing to clarify my position on a resolution recently passed by the United States House of Representatives on September 14, 1998. I, and some of the Members of the Congressional Black Caucus, mistakenly voted for House Concurrent Resolution 254 which called on the Government of Cuba to extradite to the United States Joanne Chesimard and all other individuals who have fled the United States from political persecution and received political asylum in Cuba. Joanne Chesimard was the birth name of a political activist known to most Members of the Congressional Black Caucus as Assata Shakur. For the record, I am opposed to the resolution. I unequivocally stated that a mistake was made and I would have voted against the legislation.”
Rep. (D., California) Maxine Waters --- http://townhall.com/columnists/humbertofontova/2011/08/26/maxine_waters_apologizes-to_fidel_castro
Maxine Waters was and still is in favor of making Cuba a safe haven for black cop killers. Joanne Chesimard fled to Cuba to avoid being captured for killing a state trooper ---

Every time Racist Maxine Waters opens her mouth, chalk up another 100,000 votes for the Tea Party
"Kerosene Maxine to Tea Party: 'Go to Hell!'," by black journalist Larry Elders, Townhall, August 25, 2011 ---

"I'm not afraid of anybody. ... And as far as I'm concerned, the tea party can go straight to hell." -- Rep. Maxine Waters, D-Calif.

Waters' list of insults, vulgarities and blame-whitey scapegoating easily makes her the Al Sharpton of Congress.

Let's go to the videotape:

Waters once said of the then-sitting president: "I would like to ... say ... very clearly that I believe George (H.W.) Bush is a racist." She routinely refers to the Republican Party as "the enemy." She also referred to Republican former Los Angeles Mayor Richard Riordan as a "plantation owner."

She called the 1992 Los Angeles riots a "rebellion," and bellowed, "No justice, no peace!" She defended looters: "There were mothers who took this as an opportunity to take some milk, to take some bread, to take some shoes. Maybe they shouldn't have done it, but the atmosphere was such that they did it. They are not crooks." Waters said: "One lady said her children didn't have any shoes. She just saw those shoes there, a chance for all of her children to have new shoes. Goddamn it! It was such a tear-jerker. I might have gone in and taken them for her myself."

In 1973, the former Black Panther Joanne Chesimard shot and killed a New Jersey state trooper. Found guilty of murder and sentenced to life in prison, Chesimard escaped from a New Jersey penitentiary and fled to Cuba. Congress passed a resolution urging Castro to extradite her to this country. But Waters wrote Castro a letter, urging him to keep the "persecuted ... political activist" and likened the cop killer to Martin Luther King, since Chesimard had been "persecuted for her civil rights work"!

Waters wrote a foreword for a book, "Dark Alliance," that accused the CIA of playing a prominent role in the Los Angeles area drug trade. Never mind that practically every major newspaper -- The New York Times, the Los Angeles Times, and The Washington Post -- all examined and rejected the charge. She even pressured former CIA director John Deutch into coming to Los Angeles to explain the CIA's alleged role. During a town hall meeting, Waters bellowed, "If I never do anything else in this career as a member of Congress, I am going to make somebody pay for what they have done to my community and to my people!"

. . .

Waters currently faces an investigation by the House ethics committee. She phoned then-Treasury Secretary Henry Paulson in 2008, asking his office to meet with minority bank owners. He complied. But most of the bankers in attendance were from OneUnited Bank -- a bank in which Waters' husband owned shares and on whose board he once served. OneUnited asked for a special bailout, and three months later, it received $12 million. The basis of the House ethics inquiry is why Waters failed to disclose to Paulson her personal financial interest in the bank bailout.

Waters' tea party attack once again exposes her as one of the most racist, hateful and vulgar members of Congress -- prompting Republican presidential candidate Rick Santorum to call her "vile." He was far too kind.


Continued in article

Listen to Maxine defend the enormous accounting fraud at Fannie Mae because the perpetrator CEO was black.
The video link can be found at

Citizens for Responsibility and Ethics in Washington (CREW) named Waters to its list of corrupt members of Congress in its 2005, 2006 and 2009 reports. Citizens Against Government Waste named her the June 2009 Porker of the Month due to her intention to obtain an earmark for the Maxine Waters Employment Preparation Center.

Waters was charged by the House's subcommittee on ethics with violations of the House's ethics rules in 2010.An ethics trial she was expected to face in the fall of 2010was successfully impeded by House Democrats, most notably Rep. Zoe Lofgren, chair of the House Ethics Committee.

Is pedophilia really a good thing?

"Why Are We Surprised With the Push for 'Pedophile Rights," by Michael Brown, Townhall, August 25, 2011 ---

. . .

Academic articles in scholarly journals have been presenting pedophilia in a sympathetic light for years, and, as Matthew Cullinan Hoffman noted, the American Psychiatric Association (APA) released a report in 1998 “claiming that the ‘negative potential’ of adult sex with children was ‘overstated’ and that ‘the vast majority of both men and women reported no negative sexual effects from their child sexual abuse experiences.’ It even claimed that large numbers of the victims reported that their experiences were ‘positive,’ and suggested that the phrase ‘child sex abuse’ be replaced with ‘adult-child sex.’” Others have coined the more disgusting term “intergenerational intimacy.”

The APA’s report was so disturbing that it drew an official rebuke from Congress, yet the pro-pedophile (or, pro-pederast) push continues. In fact, some psychiatric leaders, like Dr. Richard Green, who were instrumental in removing homosexuality from the APA’s list of mental disorders in 1973, have been fighting to remove pedophilia as well.

Continued in article

Jensen Comment
Perhaps the best we can do is make it illegal when the child is less than two years of age.

"Illegal Aliens Get Billions in Tax Credits from IRS," by Mike Shedlock, Townhall, September 2011 ---

According to a Treasury Inspector General audit, Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits

Redaction Legend:
1. Tax Return/Return Information
2(f). Risk circumvention of agency Regulations or Statutes


Many individuals who are not authorized to work in the United States, and thus not eligible to obtain a Social Security Number (SSN) for employment, earn income in the United States. The Internal Revenue Service (IRS) provides such individuals with an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns. Although the law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, an increasing number of these individuals are filing tax returns claiming the Additional Child Tax Credit (ACTC), a refundable tax credit intended for working families. The payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.


Claims for the ACTC by ITIN filers have increased from $924 million in Processing Year 2005 (the calendar year in which the tax return was processed) to $4.2 billion in Processing Year 2010. Clarification to the law is needed to address whether or not refundable tax credits such as the ACTC may be paid to those who are not authorized to work in the United States.

Continued in article



Hi Raza

A Story About Joe and Mary Starbacks in Cuba

Joe and Mary Starbacks "worked" for a short time in the Cuban Coffee House in Havana. Actually they did not really work very hard and mostly took long and frequent coffee breaks where they spread a map of America on a table and dreamed of where they might live the American Dream one day. They learned from an old National Graphics Magazine that the Pacific Northwest is a particularly nice place to live.

They soon quit their jobs when they discovered that by pooling their Cuban Ration Books they could do about as well not working as working. Then they started a small black market business by pushing a coffee making cart along busy streets of Havana.

They could only have a small black market business, because anybody in Cuba is sent to prison for becoming wealthy unless they are members of the elate in the Cuban Communist Party.

After they prospered in America they agreed completely with the assessment of Fidel Castro about what's wrong with communism and socialism:

"Report: Castro says Cuban model doesn't work," by Paul Haven. Associated Press, Yahoo News, September 8, 2010 ---

Fidel Castro told a visiting American journalist that Cuba's communist economic model doesn't work, a rare comment on domestic affairs from a man who has conspicuously steered clear of local issues since stepping down four years ago.

The fact that things are not working efficiently on this cash-strapped Caribbean island is hardly news. Fidel's brother Raul, the country's president, has said the same thing repeatedly. But the blunt assessment by the father of Cuba's 1959 revolution is sure to raise eyebrows.

Jeffrey Goldberg, a national correspondent for The Atlantic magazine, asked if Cuba's economic system was still worth exporting to other countries, and Castro replied: "The Cuban model doesn't even work for us anymore" Goldberg wrote Wednesday in a post on his Atlantic blog.

He said Castro made the comment casually over lunch following a long talk about the Middle East, and did not elaborate. The Cuban government had no immediate comment on Goldberg's account.

Since stepping down from power in 2006, the ex-president has focused almost entirely on international affairs and said very little about Cuba and its politics, perhaps to limit the perception he is stepping on his brother's toes.

Goldberg, who traveled to Cuba at Castro's invitation last week to discuss a recent Atlantic article he wrote about Iran's nuclear program, also reported on Tuesday that Castro questioned his own actions during the 1962 Cuban Missile Crisis, including his recommendation to Soviet leaders that they use nuclear weapons against the United States.

Even after the fall of the Soviet Union, Cuba has clung to its communist system.

The state controls well over 90 percent of the economy, paying workers salaries of about $20 a month in return for free health care and education, and nearly free transportation and housing. At least a portion of every citizen's food needs are sold to them through ration books at heavily subsidized prices.

President Raul Castro and others have instituted a series of limited economic reforms, and have warned Cubans that they need to start working harder and expecting less from the government. But the president has also made it clear he has no desire to depart from Cuba's socialist system or embrace capitalism.

Fidel Castro stepped down temporarily in July 2006 due to a serious illness that nearly killed him.

He resigned permanently two years later, but remains head of the Communist Party. After staying almost entirely out of the spotlight for four years, he re-emerged in July and now speaks frequently about international affairs. He has been warning for weeks of the threat of a nuclear war over Iran.

Castro's interview with Goldberg is the only one he has given to an American journalist since he left office.


A Story About Joe and Mary Starbacks in America

After sneaking into Miami, Joe and Mary Starbacks immediately commenced a long bus trip to Seattle. They only had $2,000 of hard earned black market profits in their pockets, but in Seattle they managed to borrow $10,000 from the giant Washington Mutual (WaMu) Bank. Before it went bankrupt in 2009, WaMu had a reputation of making loans to almost anybody who came off the streets into a WaMu branch.

Joe and Mary commenced Starbacks Coffee House Number 1 on a busy downtown Seattle street corner. They worked about 18 hours each day blending superior coffee, baking great pastries, and keeping their store and bathrooms spotless. They themselves rarely ever took a break during any day and put off their dreams of having a family. This was a lot different than working for a coffee house in Cuba. In Seattle they owned the store.

After the enormous financial success of their first store,  they opened Starbacks Coffee House Number 2 in Tacoma.

After ten years of booming success they opened Starbacks Coffee House Number 8,317 in Miami.

Joe and Mary do indeed still live the great American Dream.


How Capitalism, Ambition, and Risk Taking are Fueled by the Fires of Greed

Probably the best video ever made about how greed fuels the fires of capitalism, ambition, and risk taking ---

Now to your question Raza:
A serious wealth tax douses the fires of greed, ambition, risk taking, and capitalism in general,
A serious wealth tax is quite simply a ploy to defeat capitalism and replace it with egalitarian socialism or Cuban so-called communism

There are of course less-serious taxes on the wealthy such as enormous property taxes on their mansions and luxury taxes on their yachts. But I think you had more serious egalitarian wealth taxes in mind that destroy capitalism, ambition, and risk taking.

Another fall out of serious wealth tax is that the wealthy flee with their money to places like Switzerland.

Wealthy artists and authors flee to Ireland where they can live virtually tax free.



Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

Bob Jensen's Tidbits Archives ---

Bob Jensen's Pictures and Stories

Shielding Against Validity Challenges in Plato's Cave ---

·     With a Rejoinder from the 2010 Senior Editor of The Accounting Review (TAR), Steven J. Kachelmeier

·     With Replies in Appendix 4 to Professor Kachemeier by Professors Jagdish Gangolly and Paul Williams

·     With Added Conjectures in Appendix 1 as to Why the Profession of Accountancy Ignores TAR

·     With Suggestions in Appendix 2 for Incorporating Accounting Research into Undergraduate Accounting Courses

Shielding Against Validity Challenges in Plato's Cave  --- http://www.trinity.edu/rjensen/TheoryTAR.htm
By Bob Jensen

What went wrong in accounting/accountics research?  ---

The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most Accountants ---


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

Systemic problems of accountancy (especially the vegetable nutrition paradox) that probably will never be solved ---

Bob Jensen's economic crisis messaging http://www.trinity.edu/rjensen/2008Bailout.htm

Bob Jensen's threads --- http://www.trinity.edu/rjensen/threads.htm

Bob Jensen's Home Page --- http://www.trinity.edu/rjensen/