Faced with widespread criticism of his once-vaunted “9-9-9” tax scheme, former pizza maker Herman Cain has changed a few ingredients. 9-9-9, readers will recall, was an attempt to simplify America’s Byzantine tax system by replacing the current system of graduated income and corporate taxes with three flat taxes, all assessed at 9 percent: a personal income tax, a corporate income tax, and a national sales tax. Social Security and Medicare taxes would be eliminated, and a bewildering array of deductions and schedules would be abolished. Today’s misnamed “progressive” tax system would be replaced by a simple, straightforward levy that would allegedly reduce both the time and expense of paying taxes for both individuals and corporations. Such a system — especially in comparison with rival Rick Perry’s newly-announced 20 percent flat tax, might seem like a beleaguered taxpaying public’s deliverance.
But others have done the math and concluded that, for many Americans, Cain’s new tax would constitute a tax increase. The Tax Policy Center, a non-partisan Washington think tank, claims that, far from relieving the tax burden on America’s middle class, Cain’s scheme would raise taxes on roughly 80 percent of American families.
David Galland’s article for the Daily Reckoning painted a picture of imminent collapse of America’s monetary system, which was followed four days later by Clive Maund’s possible scenario of bank failures following on the heels of a eurozone collapse. Mamta Badkar raised the specter of hyperinflation in his Business Insider article by reviewing the “10 Worst Hyper-Inflation Horror-Stories of the Past Century,” reflecting interest in whether, or how, the economic disaster of hyperinflation would affect the United States.
According to Badkar, the runaway inflation of Germany in the early 1920s is one of the worst cases in history, where, at its nadir, the monthly inflation rate reached 29,500 percent in October 1923. In post-World War II Greece, inflation peaked at 20.9 percent a month in October 1944, while in July 1946, inflation in Hungary hit 207 percent daily. In China, following the Second World War, inflation reached 2,178 percent in May 1949, equivalent to a daily rate of 11 percent.
In the mid-1970s, Chile suffered from an inflation rate of 746 percent annually, while Argentina’s inflation rate in 1989 hit 12,000 percent. Bolivia’s inflation between May and August 1985 hit 60,000 percent on an annual basis. Nicaragua’s inflation rate in 1987 exceeded 30,000 percent; Yugoslavia’s daily rate of inflation reached 64.6 percent between 1989 and 1994; and in perhaps the most famous hyperinflation of all time, the purchasing power of Zimbabwean dollars was virtually obliterated, with inflation reaching 416 quintillion percent annually.
The Metropolitan Transit Authority of New York, a state agency which controls the New York City Transit Authority, has run the city's subways since 1965. (The two privately owned systems, the Brooklyn-Manhattan Transit Corporation [BMT] and the Interborough Rapid Transit Company [IRT] were bought by the city in 1940.) The mass of New Yorkers simply cannot get around their city without subways, and government owns the subways. The MTA is facing a budgetary crisis, and its director, Jay Walder, left several months ago after a $10-billion capital shortfall was revealed.
How is the MTA going to handle this financial problem? The “amenities” offered to its customers are already scant. There are only 129 public restrooms for the 468 stations. Rats have become an extremely pressing problem in some MTA stations. Now New York is considering removing all trash cans from some of the subway platforms as a cost-saving measure.
This plan is already being tested at the Main Street Station on Number 7 line in Flushing, Queens, and at the Eighth Street N and R stations in Manhattan. If it succeeds, then it may be expanded to other stations. The no-bin experiment is being justified on the grounds that the MTA has more trash that it can handle. Crews remove 8,500 trash bags from MTA stations each day.
Critics note that the Obama administration is forging ahead with its mission to make the U.S. Congress absolutely obsolete. The latest endeavor involves circumventing Congress in order to push the President's housing and student loans agenda.
Earlier this year, Obama indicated that he would bypass Congress when he felt it necessary in order to achieve his goals. Appearing before the radical Hispanic group La Raza in July, the President admitted that it is “very tempting” to do things his own way. He later made similar assertions before the Congressional Hispanic Caucus Institute, proclaiming, “There are times where — until Nancy Pelosi is Speaker again — I’d like to work my way around Congress.”
I have a theory about the canary in the coal mine. I expect that before it died of asphyxiation, it would panic and chirp loudly and vigorously at the prospect of its coming demise. It would then fall silent, and pass out, and its change in behavior would warn the miners that the air in the mine had become foul.
The use of canaries in coal mines to warn miners of the danger of accumulating noxious vapors is not just an "old wives' tale." As recently as the 1980s, miners in the UK used the birds to warn of danger. The practice was described by the BBC, which noted that, beginning in 1911, tradition held that two canaries should be "employed by each pit."
The canaries served to warn miners of danger until 1986 when the British government decided to replace them with modern electronic equipment, to the disappointment of the miners. But until that time, the canaries kept the miners safe, changes in their behavior warning of the coming of danger.
Today, in America, the canary in the political coal mine is panicking, and like the miners of old, we should take heed.
An investigation by the Labor Department’s Office of Inspector General (OIG) has confirmed that more than seven million dollars in federal stimulus money went to an Oregon forestry project that generated not a single U.S. job. Instead, precisely $7,140,782 from the American Recovery and Reinvestment Act (ARRA), President Obama’s 2009 economic stimulus plan, was siphoned off to four Oregon forestry services to pay wages for 254 foreign workers.
In 2009, when the program’s contracts were approved, Oregon was home to the nation’s third-highest unemployment rate (11.1 percent), with joblessness in many rural areas surpassing 15 percent. In addressing the state’s economic woes, the Obama administration said that the funds were aimed to produce hundreds of forest clean-up jobs in central Oregon. But despite severe job shortages, contractors professed that they wrestled to attract local workers in the area, and did so "unsuccessfully." However, the OIG reported:
Only two Oregonians were listed on the employer recruitment reports, indicating that workers in Oregon were likely unaware these job opportunities were available. In fact, although 146 U.S. workers were contacted by the three employers regarding possible employment, none were [sic] hired. Instead, 254 foreign workers were brought into the country for these jobs.
In an effort to examine the Occupy Wall Street crowd’s complaint about income inequality, economist Mark Perry has concluded that people with higher incomes work harder and longer than those who don't.
A quick perusal of Perry’s graph based on the Census Bureau’s data illustrates the following reasonable conclusions: Households with high incomes have more people working full time, they’re in their peak earning years, they’re married and college-educated. On the other hand, households at the opposite end of the spectrum have fewer people working, more likely to be single and less-well educated, and less likely to be in their peak earning years.
Current data from the Census Bureau show the following:
Back in August, when Standard & Poor's downgraded the U.S. credit rating for the first time in history, from AAA to AA+, the Obama administration was disgruntled and fearful of how such a move would impact economic growth. Once the initial shock of the maneuver passed, however, Washington returned to its business-as-usual mentality. Now, however, it seems that this period will be short-lived, as another downgrade is expected.
According to Bank of America/Merrill Lynch’s Ethan Harris:
We expect a moderate slowdown in the beginning of next year, as two small policy shocks — another debt downgrade and fiscal tightening — hit the economy. The “not-so-super” Deficit Commission is very unlikely to come up with a credible deficit-reduction plan. The committee is more divided than the overall Congress. Since the fall-back plan is sharp cuts in discretionary spending, the whole point of the Committee is to put taxes and entitlements on the table. However, all the Republican members have signed the Norquist “no taxes” pledge and with taxes off the table it is hard to imagine the liberal Democrats on the Committee agreeing to significant entitlement cuts.
The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan. Hence, we expect at least one credit downgrade in late November or early December when the super Committee crashes.
Citigroup has agreed to pay $285 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was starting to collapse. The Securities and Exchange Commission brought forth the civil action against Citigroup, claiming that investors who bought into the deal (which involved, essentially, stuffing portfolios with risky mortgage — related investments, selling it to unsuspecting customers, and then betting against those investments) had been defrauded. The transaction involved a one-billion dollar portfolio of mortgage-related investments, many of which were handpicked for the portfolio by Citigroup without telling investors of its role or that it had made bets that the investments would fall in value. The SEC says that as investors lost millions, Citigroup made $160 million in fees and profits.
Citigroup neither admitted nor denied the SEC's allegations in the settlement. "We are pleased to put this matter behind us and are focused on contributing to the economic recovery, serving our clients and growing responsibly," Citigroup said in a statement.
The penalty is the largest involving a Wall Street firm accused of misleading investors before the financial crisis since Goldman Sachs & Co. paid $550 million to settle similar charges last year. JPMorgan Chase & Co. resolved similar charges in June and paid $153.6 million.
The SEC on Wednesday also brought a case against Credit Suisse, which played a smaller role in the transaction, and against one individual at each company.
If Congress fails to pass President Barack Obama’s American Jobs Act, “murder will continue to rise, rape will continue to rise, all crimes will continue to rise,” Vice President Joe Biden told a reporter from Human Events on October 19. This was in keeping with a theme that Biden has been using lately: Because the bill would help keep state and local governments from laying off police officers, and because fewer cops on the beat mean increased crime, to oppose the bill is to favor more crime.
To those who doubt “whether there’s a direct correlation between the reduction in cops and firefighters and the rise in concerns in public safety,” Biden said during an October 18 appearance in Flint, Michigan, “they need look no further than your city.” He continued:
Let’s look at the facts: in 2008, when Flint had 265 sworn officers on their police force, there were 35 murders and 91 rapes in this city. In 2010, when Flint had only 144 police officers, the murder rate climbed to 65 and rapes — just to pick two categories— climbed to 229. In 2011, you now only have 125 shields.
The next day Biden asserted that in Flint “murder rates have doubled in the last year” and “rape was up, three times.” Then he challenged scoffers to “go look at the numbers.”
Glenn Kessler, the Washington Post’s “Fact Checker,” has done precisely that; and the numbers he found just don’t add up to the soaring totals that the Vice President cited.