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Global Economy Bursting?

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any austerity - is too much

http://www.cnbc.com/id/47200513

... you know its a lot easier for a regular guy than it is for a guy like Shiller ........

... a regular guy understands that the housing market is built on old expectations .....

.... as soon as austerity hits ....... all of these old expectations will come tumbling down ...

.... the US government has finally run out of enough wiggle room to finagle the numbers anymore ....

... incomes are not keeping up with inflation ........ no amount of government reporting gymnastics can get around the facts .......

..... but for a guy like SHiller. ... a leading captain of this "frontal lobe adolescent progressive experience" ....

.... natural law is just too much ....

.... the plastic collectivism that has formed in the giant mind .....

.... can not speak in terms of the real consequences of "any austerity"

... any austerity will rip the legs out of this delusional system we call our economy.

.... everything is loaned against austerity ... everything is stacked the other way ...

.... no .... austerity ..... of any kind will be the rapid undoing of our system ......

.... but, we took this pill with folks like Woodrow Wilson ......

... massive decentalization ...... and weeping and nashing of teeth

... the nemosis of creativity is that it demands the bricks of natural law

... and man is more stupid than natural law (God) ....

... this is why centralized human systems are just a symptom of an impending

.... decentralization (Toynbe)
 
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“Fifty years ago, there wasn’t this talk of housing as an investment. It was a zeitgeist of the early 2000s, and it has gradually gone,” he [Shiller] said.
Click to expand...
The problem is that "housing" 50 years ago cost about $10/SF, or 10x the minimum wage and taxes, insurance, and utilities were rarely over $20/month total.
Today, taxes, insurance, and utilities can easily run $700 a month...by themselves, never mind the mortgage payment.
 
U.S. must halt incentives for corporate tax dodges

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/30/BUFT1OB4GQ.DTL#ixzz1tcovIiPi

This weekend's New York Times story highlighting Apple's efforts to avoid billions in taxes isn't a revelation about corporate behavior - it's a wake-up call for policymakers.

The piece details Apple's clever use of subsidiaries to dodge tax obligations, which seems galling for a company on track to report more than $45 billion in annual profit.

The only way a regressive tax system makes sense from a policy perspective is if you buy into trickle-down economics - and the only way you buy into trickle-down economics is if you ignore three decades of growing economic inequality. Not that that's stopped conservatives and corporations from sticking to the tired line that lower corporate taxes create better economic opportunities.

We're slowly selling out the American ideal of equality of opportunity based on worldviews that do nothing more than rationalize greed. And eventually we'll all pay the price, including corporations that will find it increasingly difficult to locate workers who are qualified and customers who can afford their products.

In its response to the Times, Apple stressed that it has created 500,000 jobs for U.S. workers, directly and indirectly, and "pays an enormous amount of taxes which help our local, state and federal governments." The company said its U.S. operations generated almost $5 billion in federal and state income taxes in the first half of the fiscal year.

All fair points. But if the United States were to close tax loopholes for corporations, Apple and others would contribute more to the public and compete as vigorously as ever. Why? Because innovation still happened and people were still motivated to work hard back when corporate tax rates stood around 50 percent in the 1950s.

Again, it's too much to expect Apple to shape up on its own. That's what we have government for - to curb the excesses of the free market, to ensure food is safe, medicine is effective and the tax system reflects our societal values.

Your fiduciary responsibilities may obligate you to make as much money as you can within the existing legal framework, but it doesn't compel you to actively fight to make public policy worse.

It doesn't force you to lobby for more loopholes or, more topically, for a federal bill that redirects billions of dollars now earmarked for Uncle Sam back into your pockets.

Yet Apple, Cisco, Google, Microsoft, Oracle, Pfizer and dozens of other companies are doing precisely that as members of a trade group vigorously pushing for yet another tax holiday on overseas profits. It would provide billions of dollars in savings to most of those companies - at an estimated cost of $79 billion to the government.

"The consequences of inaction are real," reads the group's letter to the White House and Congress. "Innovative companies like ours must continue to reinvest in our companies or acquire new technologies in order to maintain growth, and since a large amount of our cash holdings are now held overseas, our most significant opportunities for growth are outside the United States."

Borderline extortion aside, they are correct in arguing that much of that money won't return otherwise. But that doesn't argue for a tax holiday that encourages another round of bad behavior.
 
Randolph Kinney said:
U.S. must halt incentives for corporate tax dodges

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/30/BUFT1OB4GQ.DTL#ixzz1tcovIiPi

This weekend's New York Times story highlighting Apple's efforts to avoid billions in taxes isn't a revelation about corporate behavior - it's a wake-up call for policymakers.

The piece details Apple's clever use of subsidiaries to dodge tax obligations, which seems galling for a company on track to report more than $45 billion in annual profit.

The only way a regressive tax system makes sense from a policy perspective is if you buy into trickle-down economics - and the only way you buy into trickle-down economics is if you ignore three decades of growing economic inequality. Not that that's stopped conservatives and corporations from sticking to the tired line that lower corporate taxes create better economic opportunities.

We're slowly selling out the American ideal of equality of opportunity based on worldviews that do nothing more than rationalize greed. And eventually we'll all pay the price, including corporations that will find it increasingly difficult to locate workers who are qualified and customers who can afford their products.

In its response to the Times, Apple stressed that it has created 500,000 jobs for U.S. workers, directly and indirectly, and "pays an enormous amount of taxes which help our local, state and federal governments." The company said its U.S. operations generated almost $5 billion in federal and state income taxes in the first half of the fiscal year.

All fair points. But if the United States were to close tax loopholes for corporations, Apple and others would contribute more to the public and compete as vigorously as ever. Why? Because innovation still happened and people were still motivated to work hard back when corporate tax rates stood around 50 percent in the 1950s.

Again, it's too much to expect Apple to shape up on its own. That's what we have government for - to curb the excesses of the free market, to ensure food is safe, medicine is effective and the tax system reflects our societal values.

Your fiduciary responsibilities may obligate you to make as much money as you can within the existing legal framework, but it doesn't compel you to actively fight to make public policy worse.

It doesn't force you to lobby for more loopholes or, more topically, for a federal bill that redirects billions of dollars now earmarked for Uncle Sam back into your pockets.

Yet Apple, Cisco, Google, Microsoft, Oracle, Pfizer and dozens of other companies are doing precisely that as members of a trade group vigorously pushing for yet another tax holiday on overseas profits. It would provide billions of dollars in savings to most of those companies - at an estimated cost of $79 billion to the government.

"The consequences of inaction are real," reads the group's letter to the White House and Congress. "Innovative companies like ours must continue to reinvest in our companies or acquire new technologies in order to maintain growth, and since a large amount of our cash holdings are now held overseas, our most significant opportunities for growth are outside the United States."

Borderline extortion aside, they are correct in arguing that much of that money won't return otherwise. But that doesn't argue for a tax holiday that encourages another round of bad behavior.
Click to expand...

Yup. Good points.
 
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But in the time of high corporate taxes and growing US industries, Europes taxes were even higher, and there were not any high-tech overseas competitors. Now a company can go to Singapore or Switzerland and pay 15% rates vs 35% in the US. You can build overseas cheaper than in the US and China and other Asian countries are now high-tech competitors. YOu cannot live in a "back in the day" mentality where the US was the only game in town.
 
Debt Inequality Has Dramatically Risen Since 1983

http://www.huffingtonpost.com/2012/05/02/debt-inequality-rising_n_1470651.html?ref=business

There's a gap between America's richest citizens and everybody else. And that gap has been growing larger for years.

No, it's not income inequality. We're talking about debt.

Debt has become an enormous problem for the typical American. Among the bottom 95 percent of earners -- most of us, in other words -- debt has risen to eye-popping levels. In 1983, the bottom 95 percent had 60 cents of debt for every dollar they earned, according to the IMF's research. By 2007, it had risen to $1.40 of debt for every dollar earned.

Today, Americans owe some $704 billion in credit card debt, and more than that in both auto loans and student borrowing.

For the top 5 percent, it's been a different story. In 1983, that group had 80 cents of debt for every dollar they earned. By 2007, that had dropped off to 65 cents of debt.

Wages have been holding steady for most U.S. workers over the past generation -- but inflation has kept going up. As a result, by one estimate, consumer debt has risen 1700 percent since 1971.
 
CEOs rank Texas tops for business, California worst

http://www.chicagotribune.com/news/...ive-rankingbre8411pz-20120502,0,4162913.story


Texas remains the top state for business and California still holds the title for the worst, according to an annual ranking of states by Chief Executive magazine released on Wednesday.

Chief Executive each year surveys CEOs and asks them to grade states in which they do business. This year 650 responded, giving Texas high marks "foremost for its business-friendly tax and regulatory environment," a report on the survey and ranking said on the magazine's website.

"Texas easily clinched the No. 1 rank, the eighth successive time it has done so," the report said. "California earns the dubious honor of being ranked dead last for the eighth consecutive year."

California "appears to slip deeper into the ninth circle of business hell," the report said. "Each year, the evidence that businesses are leaving California or avoid locating there because of the high cost of doing business due to excessive state taxes and stringent regulations, grows."


California's dueling tax plans

http://www.latimes.com/news/opinion/editorials/la-ed-tax-ballot-measures-20120503,0,1751108.story

Gov. Jerry Brown has been arguing almost since the day he took office in 2011 that voters should approve a tax increase to help the state solve its long-running fiscal problems. But to Brown's dismay, the November ballot may ask voters to choose between two tax hikes — one that he has proposed, and one that wealthy civil-rights attorney Molly Munger and the California PTA are backing. Such a clash would make it less likely that voters would approve either one. That might delight anti-tax activists, but it's a worst-case scenario for public schools, universities, courts and the state's tattered safety net.

Polls show that the voters are more likely to support a tax increase if the money goes to schools and public safety than to other state services, which explains why the governor's initiative is being sold the way it is. Yet as important as those priorities are, they are not the only obligations the state must meet. The belt-tightening in recent years has moved well past the stage of trimming the easy targets of "waste, fraud and abuse." Instead, lawmakers have been slashing medical care for the poor and the elderly, diminishing support for state colleges and universities, shutting parks and cutting early childhood programs and welfare benefits.


California: Faculty Agrees to Campus Strike in the Fall

http://www.nytimes.com/2012/05/03/e...university-faculty-agrees-to-strike.html?_r=1


Faculty members in the California State University system said Wednesday that they had approved plans for a two-day rolling strike at campuses all over the state. The California Faculty Association, which represents professors, lecturers and librarians at the system’s 23 universities, has been negotiating with administrators for new contract for nearly two years. Union officials said that the strike was endorsed by 95 percent of the 12,500 members who voted last month. The rolling strike, which would not take place until the fall, would be the largest faculty strike in the state’s history and would take place over two days at each campus, ultimately affecting more than 400,000 students. The state has cut roughly $970 million from the California State University system since 2008, and university officials have responded by lowering the number of students admitted and raising tuition 23 percent. The union has asked for a 1 percent raise and says that administrators have asked to freeze faculty salaries, which have not increased since 2008.


____________________

Does anyone really wonder why businesses and people are leaving California? :rof:
 
MF Global Implosion: Congressman Grimm Sends a Message

http://www.huffingtonpost.com/janet-tavakoli/mf-global-implosion-congr_b_1473802.html

I've recently met with many Counsels General and a few Ambassadors from countries that are among our trading partners and allies. MF Global's stench is so offensive that they question the viability of our already compromised financial system. They've noted the lack of indictments in the wake of the September 2008 financial meltdown and massive ongoing bailouts. MF Global is another glaring example of our hypocrisy and cronyism and lack of will to restore rule of law to our financial system. The perception is that the needle has moved further in the wrong direction.
 
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