Friday, March 06, 2009

War Stats

New statistics from the Class War this morning show that victims number 12.5 million. The unemployment numbers grow, the numbers that represent wounded and out of action in our economy.

There are growing numbers of the economically wounded, and those numbers represent losses to the whole 'real' economy. The effects of unemployment spread to everyone who's looking to those workers to contribute to their financial picture, from the mortgage lenders to the IRS, from the grocer to the oil companies.

The unemployment rate rose to 8.1% from 7.6% in January. It was the highest reading since December 1983 and higher than economists' projections of 7.9%.

The survey of households found 12.5 million people are now unemployed, the most since records started being kept in 1940.

"It's a dismal report. We thought we'd have another month like this, and I think we have a couple of more coming," said Tig Gilliam, chief executive of Adecco Group North America, a unit of the world's largest employment firm. "We've got a lot of layoffs being announced that haven't been implemented."

Gilliam said he expects the unemployment rate to rise to 9% within the next few months.

Other economists echoed Gilliam's view that the battered labor market has yet to hit bottom. John Silvia, chief economist at Wachovia, pointed to the weekly initial jobless claims, which are still above 600,000 a week, and the large increase in the number of people working part time when they'd prefer full-time work as signs of more job losses to come.

"I'd love to believe this is the worst, but I suspect we'll continue to lose jobs for months to come," he said. "All we can hope is that the pace would slow down."
Underemployment rate keeps rising as well

The number of workers with part-time jobs who either can't find full-time positions or have had their hours cut jumped by 787,000 in February to 8.6 million.

Counting those part-time workers, along with discouraged job seekers no longer counted as unemployed by the government, the so-called underemployment rate hit 14.8% in February, up from 13.9% in January. This was the fifth straight record high for that reading, which has been calculated since 1994.

These are not feckless and reckless types, throwing away their time and money during the spring and then begging for shelter when winter comes, the famous grasshopper image. These are you and me, and many members of our family. These are the people who have worked, like Uncle Smokes, nine years or so, daily doing the job they were hired for and duly spending their income to support themselves and now they've been cut. Without those steady employed numbers, our economy is in huge trouble. Simple enough to see, without consumers, there is no consumer economy.

The right wing deludes itself, and lies to the credulous, that what we really need is more tax cuts. The shovel digging us into this hole just needs to keep digging, they inveigh. This morning I heard from the floor that the soundness of the economy depends on credit. Yep. I walked back to the teebee set to see what idiot had said this, but too late to see. Hard to credit that anyone can be this blind, deaf and dumb, but about 20% seems always to meet that criteria.

This morning, a refreshingly enlightened post on tax cuts that President Obama is proposing comes from Providence, RI.

The president wants to raise the top tax rate to 39.9 percent starting in 2011 (when the economy is presumably on the road to recovery). That was the highest marginal rate at the end of the Clinton administration. From all the garment-rending, you'd think that the top rate was being hiked up to 90 percent, which is where that famous socialist Dwight D. Eisenhower left it.

One of the tax-a-phobes' favorite tactics is to reference John F. Kennedy's tax cut. They hail it once an hour. But they always neglect to note what the sainted JFK lowered the top rate to. He lowered it to 50 percent, which is 10 points above the tax rate Obama proposes.

A stronger argument might focus on Obama's plan to limit income tax deductions for high-earning families – including for charitable contributions. That's problematic.

Obama talks of raising the capital-gains tax rate to 20 percent from the current 15 percent for families making $250,000 or more a year. A "War on Prosperity," some declare.

Well, there you go again. Ronald Reagan inherited a 20 percent capital-gains tax rate, then raised it to an effective rate of 28 percent for high-earners.

The thinking went as follows: The top rate was being slashed to 28 percent from 50 percent. Well-off Americans should not get yet another tax break on their investments. Thus, capital gains would be taxed as ordinary income.

Linda Beale, a tax expert at Wayne State University Law School in Detroit, prefers Reagan's base-broadening approach. "It eliminated loopholes, lowered rates and removed the preferential rate on capital gains," she told me.

By the way, Obama is not actually raising taxes. He's letting George W. Bush's tax cuts expire. Bush and Congress could have made them permanent but did not. The legislation purposely canceled the cuts after 10 years to hide their enormous long-term cost.

That factual analysis belies much that has been thrown out by right wing commentaries this week. Listening in to Congress this week you could hear the Rep. Virginia Foxx and Rep. Jeb Hensarling faction insisting that only making big tax cuts could save our deeply troubled economy. They will harp on formulae condemning the 'big spending' ways of their opponents endlessly, ignoring what they have wrought.

It is a sad reflection of politically safe seats in areas where facts are fearsome things, they contradict the ideology of the right. The congress needs to ride over the Big Lie purveyors, something Diane pointed out this a.m., and get on with the business of rescuing the victims of their class wars.

Labels: , , ,


Blogger Woody (Tokin Librul/Rogue Scholar/ Helluvafella!) said...

In the era of Income Tax, the US has prospered best when the top marginal rate has been over 50%...

12:11 PM  
Blogger Woody (Tokin Librul/Rogue Scholar/ Helluvafella!) said...

Gilliam said he expects the unemployment rate to rise to 9% within the next few months.

That's the "official" rate. the true rate is always just about double that, not counting under-employed workers or those who have given up even looking for work.

12:13 PM  
Blogger Ruth said...

Of course, the supposedly high business tax rate is misleading, since most businesses get out of just about all of their taxes through depreciation and expensing away their costs. Effective business tax rate is about 0. And the same is true of a lot of wealthy taxpayers as well, much of it can be put into untaxed accounts for heirs.

12:48 PM  

Post a Comment

<< Home