By Bill Scher
January 9, 2012 - 9:56am ET
Each morning, Bill Scher and Terrance Heath serve up what progressives need to effect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security
MORNING MESSAGE: The SWAG Economy
OurFuture.org's Sam Pizzigati: "The SWAG elements have plenty in common. Silver, wine, art, and gold all rate as scarce, transportable, long-lasting physical assets. They also make for wonderful tax shelters. They throw off no income stream and, consequently, create no annual tax liability for wealthy investors. The profits SWAG assets generate at sale, meanwhile, count as capital gains and receive preferential tax treatment over ordinary income. These tax benefits from SWAG ought to create obvious concerns for those of us in America’s 99 percent. The less the nation’s wealthy pay in taxes, after all, the greater the tax burden on everyone else. But our cause for concern ought to go deeper than the tax games the swaggering rich can play with SWAG assets. SWAG just may symbolize the ultimate folly — and sheer irrationality — of our staggeringly unequal, top-heavy economy."
GOP Fractures As NH Primary Nears
Romney's record at Bain Capital back in spotlight, thanks to Gingrich. W. Post: "A new documentary set to be posted online by a super PAC supporting Newt Gingrich accuses Mitt Romney of getting rich at the expense of tens of thousands of American employees at four companies. The documentary, titled 'When Mitt Romney Came to Town,' paints the GOP presidential frontrunner as a corporate “raider” more unscrupulous even than Wall Street executives, preying on the misfortune of people who lost their jobs ... it is a concerted effort to paint the former Massachusetts governor as an elite who lined his pockets by gaming the system and destroying unsuspecting American businesses."
Gingrich Super PAC rep pins loss of manufacturing jobs on Romney business model. Bloomberg quotes: "Mitt Romney is not a capitalist. He is a predatory corporate mugger. If you ever wonder why so many manufacturing jobs are overseas, you need to look no further than Mitt Romney. He can claim thousands of jobs created, only those jobs were created in Mexico and Southeast Asia."
Santorum praised public assistance ... when it helped his father. Eric Rauchway: "[Pittburgh Tribune-Review reported last year," 'Aldo Santorum called the GI Bill the greatest gift he received. He gave back by building a career and family around veterans hospitals. 'We always lived on the campus of the veterans hospitals...' said his son, former Sen. Rick Santorum ... 'I always joked that I spent my childhood living in public housing ... He then went to work for the Veterans Administration and that is where he met my mom,' ... yet Rick Santorum – son of a beneficiary of the GI Bill (the veterans’ New Deal, you know) and a man who wouldn’t exist were it not for the government program that employed his parents, brought them together and housed them to boot – now says ... that 'I don’t want to make black people’s lives better by giving them somebody else’s money'..."
Romney resurrects debunked claim that Obama "made the economy worse." ThinkProgress: " In July, NBC’s Sue Kroll asked Romney, 'How can you continue to say things are worse when they really aren’t worse?' Romney responded: 'I didn’t say that things are worse. What I said is that the economy hasn’t turned around.' In New Hampshire this week, however, Romney has repeatedly returned to the old talking point, saying during both debates here that Obama made the economy worse and repeating it again at an event in Rochester..."
Republican attacks on illegal immigration ignore facts. McClatchy: "Listening to the GOP White House aspirants, voters might not know that the number of illegal immigrants in the United States is down, attempted border crossings are at a 40-year low and President Barack Obama has deported undocumented workers at twice the rate as his predecessor. With slight variations, the top GOP candidates back mass deportations, tough state enforcement laws and extending the 675-mile fence along the U.S.-Mexico border, where illegal crossings were near their highest back in 1999."
Republicans showing they don't believe in equal opportunity, argues NYT's Paul Krugman: "... someone who really wanted equal opportunity would ... support more nutritional aid for low-income mothers-to-be and young children ... improve the quality of public schools ... aid to low-income college students. And he would support what every other advanced country has, a universal health care system ... If Mr. Romney has come out for any of these things, I’ve missed it. And [congressional] Republicans have tried to slash funds for the Women, Infants and Children program, which helps provide adequate nutrition to low-income mothers and their children; they have demanded cuts in Pell grants, which are designed to help lower-income students afford college. And they have, of course, pledged to repeal [President Obama's] health reform..."
Primary battle reveal ideological differences within GOP. LAT: "The sometimes-personal exchanges underscored the insoluble strains of Republicanism warring this year — including supporters of the tea party movement and those with extremely conservative views across the board, and the libertarians drawn to Ron Paul's eclectic mix of tightfisted fiscal conservatism, largely liberal social views and isolationist foreign policy."
"Capitalism In Crisis"
FT's John Plender declares "Capitalism In Crisis": "...no one can be surprised that the legitimacy of capitalism is currently in question. And it would be wrong to call it a 'winner takes all' form of capitalism, because privileged losers appear to be making off with the prizes too. What is unquestionably novel is the ferocity with which US business sheds labour now that executive pay and incentive schemes are more closely linked to short-term performance targets. In effect, the American worker has gone from being regarded as human capital to a mere cost ... [Mancur] Olson argued that nations decline because of the lobbying power of distributional coalitions, or special-interest groups, whose growing influence fosters economic inefficiency and inequality ... Today, the pre-eminent interest group consists of finance professionals on Wall Street ..."
Economists fear job crisis has already inflicted long-lasting damage. WSJ: "The latest labor-market snapshot, out Friday, gave cause for continued, if tepid, optimism. U.S. employers added 200,000 jobs in December, and the unemployment rate ticked down to 8.5%, its lowest level since early 2009. But economists gathered here for the American Economic Association's annual convention took a longer and generally dimmer view. Even if recent progress continues, the recession already has had a lasting effect on a generation ..."
New International Capital Requirements Loosened
International bank regulators says new capital requirements should not apply in crises. Bloomberg: "'During a period of stress, banks would be expected to use their pool of liquid assets, thereby temporarily falling below the minimum requirement,' the Basel Committee on Banking Supervision’s governing board ... The aim of the measure, known as a liquidity coverage ratio, is to ensure that lenders hold enough easy-to-sell assets to survive a 30-day credit squeeze. The requirement ... is scheduled to enter into force in 2015 ... Regulators must still clarify which assets banks should be allowed to count towards liquidity buffers and how much funding lenders should expect to lose in a crisis..."
New capital requirements have already restrained banks. NYT: "The decision by regulators to require banks, including those in the United States, to raise capital levels has eaten into profits. The money banks must set aside cannot be deployed elsewhere, potentially for higher rewards. This is one reason banks have been less profitable since the financial crisis."
House progressives praise new WH immigration reform measures. The Hill: "Several senior House liberals are cheering President Obama this week after his administration proposed new rules making it easier for some illegal immigrants to remain in the country while they apply for citizenship ... Under current law, illegal immigrants interested in becoming legal residents must leave the country while they negotiate the application process. The new proposal, unveiled Friday by the Department of Homeland Security (DHS), would allow U.S. citizens to apply for 'hardship waivers' on behalf of their undocumented relatives."
Supreme Court to consider curtailing EPA power to quickly move to stop pollution under Clean Water Act. WSJ: "Based on 'any information'—even a newspaper article or an anonymous tip—the Environmental Protection Agency can issue an administrative compliance order directing a property owner to stop discharging pollutants or restore a damaged wetland. The government says such directives, similar to stop-work orders by local zoning inspectors, allow it to respond rapidly to prevent environmental damage ... Challengers say that by issuing compliance orders without first giving property owners a chance to contest them in court, the EPA skirts the federal law and the Fifth Amendment guarantee of due process."
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