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September 05, 2012

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And i approve this blog.
Paid for by blood, sweat and tears.

A good word for Kyl?! He's a crappy senator, AZ's most forgettable politician until he became a Kook (but I think he always was one, he just waited for the right time to come out of the closet), and a corporate whore. He could have led, but he'd rather bend over and let us take the shaft. Let's hope he becomes as crappy a lobbyist as he was a senator. Too bad he'll still laugh all the way to the bank.

Arizona like the rest of the states has it's pile.
Rehnquist
Mecham
Pearce
Kyl
Brewer

And then how many of you all think St Janet didnt have a hand in the DOJ Arpaio decision. But it was an easy out as no prosecutor wants to risk losing.

And supposedly the two most popular people in the US are Michelle Obama and Bill Clinton, so why are they not the Democratic ticket?

And who would want to watch a gladiator match between slow dribble Obama and gimpy Bill when you could watch the great cats, Michelle and Ann duke it out for their township.

Kyl may return to his former career in water law. For sure, there's enough work and "facilitation funds" there to make him very wealthy.

The Democrats would definitely do as an effective and moderate alternative to the kooks. They've been presenting themselves as such for years. But the AZ establishment, as perfectly exemplified by Laurie Roberts, refuses to consider it. They are obsessed with getting the type of moderate Republicans they remember from the 70s back. To a certain extent it's worthwhile that some effort is being made to tamp down the looniness in the GOP but you're not going to undo 40 years of the Southern Strategy and Religious Right overnight and, as Jon noted, there's a considerable amount of money invested in keeping the party as reactionary as possible. So the sensible thing in the near term would be to elect Democrats and relagate Republicans to the minority for a long time. But Laurie Roberts et al won't consider it. I think might be just plain snobbery. As nutty as Republicans have gotten, at least they're not associated with dirty hippies and poor minorities like the Democrats are.

Regrding elections.

A friend asked me why it's so hard to indite Arpaio?
Maybe because no one could make a case?
or because they didnt assign the work to you and me, G.
or
I wrote Joe a letter the first time he was elected as Sheriff and I sent him a copy of the New Yorker April 22 & 24 1994 issue citing the story "A Showdown in East Texas by William Finnegan and told him to watch out for the FEDS. He sent me a letter back, stating "thank you" and he wasn't worried about the FEDs. Now couple that up with he and Dennis Deconcini were tight, (Dennis still does robo calls for him even thought they are of different parties) And Joe supported Napolitano for Governor. And Deconcini was there for the Bonanno's when southern Arizona was threatened by DEA. Dennis put together a narcotics task force in southern AZ and told the feds to stay out. And Janet failed to go after Arpaio when she was US attorney. And Dennis Burke was Janets hand picked successor to the US Attorneys office in AZ and he sat on the Arpaio investigation until he left over the Fast and Furious gun deal. I suspect the case was not well investigated, was weak and would have been a field full of land mines for the prosecution. So we save money and let the people of Maricopa County decide whether to keep the worlds toughest law man, know to his fellow agents as "Nickel Bag Joe."

Political Prosecutions: a note from a friend.
"but going to your original point, the feds act or don't act for political reasons. prosecutorial discretion is a weapon, as de tocqueville noted during his visit."

And getting a cooperative grand jury in Maricopa County might have been a factor?

Barry may be credited with the birth of the modern Republican Party but its behavior today is better reflected in the famous Wisconsin Republican Joe McCarthy. Goldwater and Reagan normally promoted their right wing policies with some relation to fact and veracity. The current Republican Party basis its platform on faith and allegation not connected to a factual basis. Little surprise then that Republican campaigners have proudly stated their ads won't be constrained by fact checking.

Off Topic (somewhat): One of the links above to Naked Capitalism, is by Ian Welsh. Welsh writes much on the same topics as RC, but at his site, he linked to this blog:

http://powerofnarrative.blogspot.com/

It's worth checking out. Arthur Silber is the writer. There are some particularly good pieces on Senator Robert La Follete (Learn This Lesson Now: How to Fight -- and Win) and Thomas Reed (Thomas B. Reed, An American Hero -- and a Hero for Our Time). Both Republicans, both Progressives (as in anti-corporate, not the MSM definition as liberal), both NOT Kooks.

Great blog, Mr. Talton: it hits so many points, so well.

One exception: I'll agree with eclecticdog regarding the odious Jon Kyl. I'm a little reluctant to challenge Mr. Talton's superior knowledge of Kyl's early career. Still, he signed the Americans For Tax Reform "Taxpayers protection pledge" swearing to "oppose any and all efforts to increase the marginal income tax rate for individuals and business and oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates". This is one of the best indicators of the radicalization of the Republican Party: only six House Republicans haven't signed, and only seven Senate Republicans haven't. Only two House Democrats HAVE signed, and only one Senate Democrat.

http://s3.amazonaws.com/atrfiles/files/files/091411-federalpledgesigners.pdf

Kyl voted against the Patient Protection and Affordable Care Act ("Obamacare"); opposed the New START arms control treaty (leading the unsuccessful Republican opposition); claimed that performing abortions is "well over 90 percent of what Planned Parenthood does" (it's actually 3 percent); and lied to the U.S. Supreme Court in an amicus brief attempting to prevent the court from considering grievances about Guantanamo abuses.

http://www.slate.com/articles/news_and_politics/jurisprudence/2006/03/invisible_men.single.html

Regarding the Arpaio criminal investigation, it's clear that the Obama administration wouldn't be worried about an embarrassing outcome before the November elections, since the case would not finish that quickly. What it might have been worried about was a political sideshow involving a nationally popular figure that could have been exploited by Republicans. If this sort of practical politicking was involved, it was of course reprehensible and indefensible. That said, the standard of evidence in a criminal case (beyond a reasonable doubt) is high and (unlike so many criminal cases) would be strictly applied in a case involving Sheriff Arpaio and his expensive, high-powered legal team. The prosecutors would have had to prove INTENT beyond a reasonable doubt, not merely the appearance of malfeasance; and Arpaio (and his lieutenants) were practiced in constructing layers of plausible denial and indirect involvement. Still, given what I know (and all I know is what I read in the papers) there was clearly enough evidence to put the bastards on trial. They should have taken their best shot and if they lost, then they lost. The idea that prosecutors will only pursue cases they're SURE they can win is preposterous.

Regarding Laurie Roberts, Donna Gratehouse has given one interpretation of her campaign. Another, more charitable interpretation is that Roberts has a shrewd enough sense of realpolitik to understand that advocating Democratic candidates as replacements for the Kooks -- while working as a columnist for the Arizona Republic, no less -- is not feasible. One step at a time: first replace the Kooks with somewhat less rabid versions; then work on replacing those in turn with reasonable candidates . Whether this intrepretation is more accurate than Ms. Gratehouse's, and whether such the strategem I (hypothetically) attribute to Ms. Roberts is really better than a straightforward advocacy of Democrats, are separate questions.

Regarding jmav's characterization that "Goldwater and Reagan normally promoted their right wing policies with some relation to fact and veracity", I'd have to disagree, unless "normally" was a typographic error and "nominally" was intended. The right-wing policies of both politicians were in fact normally lacking in fact and veracity, and thus their promotions of such policies were also. And not only right-wing policies: Reagan's increase of payroll taxes to "pre-fund" the Social Security and Medicare systems (given camouflage by Alan Greenscam, er, Greenspan) was a scam on a scale to put the banksters to shame. That he also had the collusion of a willfully ignorant national media and some Democrats as well doesn't change that.

I wrote:

"...and whether such the strategem I (hypothetically) attribute to Ms. Roberts is really better than a straightforward advocacy of Democrats, are separate questions."

Sorry, this is an imperfect edit of an earlier draft. It could read "...and whether the strategem I hypothetically attribute..."; or else, "...and whether such a strategem as I hypothetically attribute..."; but not the mixed version appearing above.

Unfortunately, former state Senator Carolyn Allen was term limited. She was a role model for centrism and moderation, calling the extremists members of "The Flat Earth Society". Brewer & Co. appear to have given her a token assignment to keep her quiet. Michelle Reagan now occupies this seat . . nice gal but more of the "go along to get along" type. Fortunately, she'll sometimes vote with the moderates like John McComish, who derailed the Pearce express. Maybe she'll and the other sane Senators will be emboldened next time around.

I only read this for amusement. One of these days, Mr. Talton, I surmise you will burn out on covering Phoenix and AZ because it's too far gone and you have moved on in so many ways. I have done this: moved to L.A. after having lived in PHX for 18 years. It's such a downer to think about what the city and state could have become, if only there had been more enlightened leadership or at least those that would listen to and heed wise people such as yourself. All we can do now is shake our heads, be glad we are no longer living there, and remember how much destruction the Republicans wreak when they're given the upper hand.

Reagan's increase of payroll taxes to "pre-fund" the Social Security and Medicare systems (given camouflage by Alan Greenscam, er, Greenspan) was a scam on a scale to put the banksters to shame.
Could you flesh this out a bit, Emil? I ask out of sincere ignorance, not as a challenge. (Being that I am happy to characterize anything President Iran-Contra enacted as a scam.)

"Reagan's increase of payroll taxes to "pre-fund" the Social Security and Medicare systems (given camouflage by Alan Greenscam, er, Greenspan) was a scam on a scale to put the banksters to shame."

My pleasure to flesh this out, Petro.

Reagan raised payroll tax rates in 1983 at the recommendation of the Greenspan Commission. The tax rate was deliberately raised to generate large surpluses above what was needed to pay benefits. The rationale given was that this would protect Social Security by building up the Social Security Trust Fund so that, when the baby boomers began retiring decades later, the "trust fund" would have a large cash cushion. The change to tax law also initiated automatic increases in the taxable wage base, so that in subsequent years the size of the cash surplus collected grew. By 2000, Social Security taxes collected were about $65 billion more than were being spent in benefits (in that one year alone).

The government did not save the money but spent it and wrote itself IOUs (the trust fund contains NO real assets and never has). So, Social Security became quite a slush fund for the federal government. Now, the "crisis" that the Greenspan Commission was supposed to fix with this highly regressive payroll tax increase, has popped up right on schedule, but no cash cushion is available to ameliorate it.

See "Table 13.1—CASH INCOME, OUTGO, AND BALANCES OF THE SOCIAL SECURITY AND MEDICARE TRUST FUNDS: 1936–2016"

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf

Here's another take:

http://dissidentvoice.org/2010/04/how-ronald-reagan-and-alan-greenspan-pulled-off-the-greatest-fraud-ever-perpetrated-against-the-american-people/

Emil,
Are the IUOs Treasury securities or what?

Ah, OK - thanks, Emil. I've been under the impression that the SSTF has always been (mis)used in that way, though.

What Jon asked about the IOUs, as well. The drown-in-a-bathtub crowd like to make hay over this, but it's still technically *borrowed* money, right?

The Social Security Trust Fund accounts for the IOUs from the US Treasury as an asset in the fund. The Chinese Government also holds US Treasury Bonds issued from the US Treasury. Neither the US Treasury Bonds held by China nor the IOUs held in the Social Security Fund have any cash segregated or set aside to make good on the obligations. Both the Chinese government and the Social Security Trust fund count these loans to the US Treasury as assets with an expectation of repayment from the general revenue of the US Treasury.

Of course the money is not "set aside" - as with any unsecured debt, it is "secured" against future earnings (tax revenues).

"Repayment" will never occur en toto even under the best of circumstances (I wouldn't expect it), but the government is obligated to keep the checks coming as promised.

Of course, economic growth is a shaky proposition at this point (to put it mildly.) So yea, there are real problems, but those problems are not at the feet of the SSTF.

It's annoying that it's conflated with conventional legislated expenditures that are subject to the political whims of the Congress (like the freaking military budget, for example, which should take the hit first, if it comes to it.)

Screw the efforts to make it "solvent" with privatization schemes. It's already solvent as far as the books are concerned. We just need to man up and send the knee-cappers after the programs that have deposited their IOUs in the fund.

(Sorry, had to get that off my chest. Not my wheelhouse, so if I'm not understanding something correctly here, I welcome any corrections.)

Just finished "Under the banner of heaven" by Krakauer at the suggestion of someone closely involved in prosecuting the UED in Az Strip.The Mormon obsession with being the "chosen" dovetails with the Republican view of "American Exceptionalism"This could explain the power the LDS church has accumulated in both Az. and national politics.The book has certainly made me look at Romney more closely.

well Mike theres at least 8 more books on the LDS thatc wiuld give u a bigger picture of the LDS LLC

as john dos passos said in another context, yes, we are two nations.

good nite

If one Googles up "Nine Nations of North America", we get a fascinating 30 year old perspective. There's another one on the "Bible Belt" that also relates. To me, the message is that we are and always have been the DIS-UNITED STATES. Wiser heads than mine can puzzle out the implications of these growing trends, but they showed up clearly during the two conventions.

Watching the R's, I was dumbstruck to learn that registered Republicans are 92% white! So maybe cal's right when he states that we are now sorted into two nations . . 1)whites and 2)everybody else!

A couple of important points here.

The scam was raising payroll taxes beyond what was necessary to pay benefits, then spending the money for other things while pretending that the money was being saved and would be available to finance future benefits payments when the baby boomers began retiring and placing additional stress on the system.

The technical aspects are secondary but worth explaining since there is some confusion (as shown by user comments above):

Unlike U.S. Treasury securities sold to China or others, the I.O.U.'s in federal trust funds like Social Security's are not marketable.

China can take the securities it buys and sell them on the secondary market to anyone it chooses; or it can demand payment when they mature (instead of rolling them over, as it commonly does now): the U.S. government must then make good on them or else default, with all the consequences that would entail (something that has never happened and is highly unlikely to, since the U.S. government has the soverign power to raise money by means of taxation, to say nothing of borrowing from other parties).

So, for China and other holders of U.S. Treasury securities, they are real assets; and for the U.S. Government they are real debts.

By contrast, the "special" Treasury securities in the federal trust funds are not real debt (or real assets) because they cannot be redeemed for cash, nor sold to others on the secondary market for cash.

The U.S. government issues them AND owns them (not the U.S. public); the government issued them to itself. So it's identical to writing yourself a paper I.O.U. with a promise to pay yourself, should you demand payment, but with no intrinsic value.

Furthermore, the USG owns the tax collections, and the USG can unilaterally (through Congress) change the benefits formulas (as it has many times) or cancel benefits altogether.

The USG admits this more or less openly in its own annual Budget documents:

"The Federal budget meaning of the term 'trust' differs significantly from its private sector usage. In the private sector, the beneficiary of a trust owns the income generated by the trust and usually its assets. A trustee, acting as a fiduciary, manages the trust's assets on behalf of the beneficiary. The trustee is required to follow the stipulations of the trust, which he cannot change unilaterally. In contrast, the Federal Government owns the assets and earnings of Federal trust funds, and it can raise or lower future trust fund collections and payments, or change the purpose for which the collections are used, by changing existing law."

That's from Analytical Perspectives, Budget of the United States Government, Fiscal Year 1996, but similar (less complete) language can be found in subsequent editions. See p. 133 in the current Budget:

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/concepts.pdf

Thanks for those clarifications, Emil!

P.S. One caveat regarding Dr. Smith's estimate of $2.5 trillion in surplus Social Security revenue scammed this way: this seems to be exaggerated.

I'm guessing that Dr. Smith has compared "total cash income" with "total cash outgo" for each year just as the government has, and therefore has accepted the government's "surplus or deficit" figure for each year. See p. 317 forward for the relevant figures:

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf

I've taken a more conservative approach, comparing "social insurance and retirement receipts" (in Social Security's case, tax collections), with "benefit payments" to determine the true cash-basis surplus.

I exclude the "intragovernmental receipts" category of income because subcategories like the "interest" the government pays itself on its trust fund "balances" exist only on paper and are neither collected as taxes nor spent on anything (at all). The government can arbitrarily stipulate whatever imaginatary interest rate it wishes to pretend to pay itself (and this rate has been going up in recent decades).

In fact, the trust fund deficits projected from the baby boomer retirement wave could easily be fixed by specifying still higher intragovernmental interest payments on these imaginary trust assets. The problem is that this doesn't provide funding for future benefits. Only an increase in taxes (such as removing the cap -- currently about $110,000 -- beyond which earned income isn't subject to the Social Security tax), or decreasing benefits, or both, can address a cash-accounting basis deficit between tax collections and benefit payments.

P.S. I haven't added up those figures year by year using my own methodology, but with an average surplus of perhaps $30 billion a year (less some years and more others) a napkin-calculation yields roughly $1 trillion in cumulative Social Security cash surpluses since Reagan signed the law in 1983 (spent on things other than Social Security).

Another idea for future discussion (no time now): the U.S. government keeps substantial cash in demand deposit accounts in private banks, since it is always collecting taxes and fees and always paying benefits or contractors. If the government demanded interest on these funds like any other significant depositor (perhaps allowing the big banks to bid for the privilege of using the government's cash balances), the magic of compound interest would solve a great many fiscal problems in future years. This would be real saving, not pretend saving a la the federal trust funds.

And then there's the way Japan is handling its famously massive debt: The Myth That Japan Is Broke: The World's Largest "Debtor" Is Now the World's Largest Creditor.

...more than half of Japanese public spending goes for debt service and social security payments. Debt service is paid as interest to Japanese "savers."
Which I take to mean is that the Japanese treasury is acting as the savings bank for the general population, leaving that capital available for its role as an overseas (and business?) creditor. Which I further take to mean as a de facto nationalization of at least this particular function of banking (if not more.)

Again - I don't grok finance well, however...

Petro:
A Stranger in a Strange Land
soon to be a vast waste land.
Drill baby, drill!

The Kooks run Arizona because they accurately reflect the mentality of the majority of Arizonans. The Kooks have been going strong for three decades in Arizona. It is an act of denial to suggest the Badged Ego, Bruja Blanca and the long list of ultra-rightists do not represent the majority of Arizonans.If you are not a right winger, exploit Arizona for your personal benefit and move on. Don't compromise your personal opportunities by expressing moderate political beliefs in the Land of Kook.

Arizona is Kook Land and will be Kook Land USA for the 21st century.

Been here almost 44 years and think the Bruja Blanca and Pearce just accelerated things by their whack-tivities. The influx of regressive Midwest transplants and out-of-state political money are also contributing to the whole disjointed picture. If the Republic had huevos, they could puncture a few balloons by (example) investigating the private prison racket.

Morecleanair: when U gonna be around for coffee. I got some green bean Mexican brew.

What’s to investigate about the private prison and private schools in Arizona? It’s about profit at the expense of the tax payers. It’s about abuse of prisoners at the expense of profit and about educating children in racist and religious settings. The powers to be in Arizona see this as a GOOD thing. The “big” push got started with Governor Fife Symington but suffered a few setbacks. But now the private enterprise folks got the votes down at the capitol. So God and Godless profit are in. I suspect a look at campaign contributions would not be a big surprise. The big payoffs are down the road and not reportable as relates to politics or subjected too much of a tax rate. Keep an eye on whether the, for profit, folks decide to stick with Brewer as she runs for State Senator.
It will be interesting to see if Kook land can hold on to the power with the new voters coming on board in the near future. I am happy that the fascists are using private donations to build a fence along the border. Personally I would rather give my money to El pastor. Maybe if they spent more time helping the Mexican economy produce more jobs in Mexico it would produce a better product. But does the planet need more jobs or just less people?

cal: Will the Green Bean brew grow hair and/or wisdom? I could use some of both, please.

Right now, am enjoying 60 degrees and "mist" on the Oregon coast. Will return to Phoenix when the temp in my garage goes below 100.

Morecleanair:good for U
is the mist caused by natural means?

Green Bean Mythology:
lose lots of weight.
Increase libido
able to perform satanic rites
when coupled with chicken gizzards.

Here's my prediction of what the Republicans will do if they gain control of Congress.

Mr. Talton's Front Page (The Jobs Report In Six Charts -- WaPo) provides a clue. I've provided a direct link to the chart labeled "Sectors"

http://www.washingtonpost.com/blogs/ezra-klein/files/2012/09/august_sectoral.jpg

This shows how each economic sector is doing, using September, 2008 as the normal. (This seems a bit late, but most job layoffs did occur well after the official start of the recession in December 2007.) Remember, this is a payrolls index, so it can serve as a substitute for GDP by sector.

Education/health, and mining/logging, are the only two sectors which have grown substantially better relative to 9/08.

However, Leisure and Professional Services have both recovered to the same level as 9/08.

And all the rest of the sectors, except for Construction, are at 90 percent or more (Information is slightly less).

Construction is crawling below the bottom of the chart at less than 80 percent of the 9/08 "norm".

Now, it should be obvious to anyone from this chart, given the size of the layoffs during the Great Recession, that economic recovery is mostly going pretty well considering the fact that payrolls are more than 90 percent in almost all sectors and close to, at, or above 100 percent in several important sectors.

The exceptions is the part of the economy that deals with new building. Houses. Offices. Retail stores. Warehouses.

Construction is vitally important to the economy because it involves not just workers with hammers but all of the manufacturers, distributors, and retailers that distribute construction tools and supplies, the furnishings and outfittings that go inside new buildings, and so forth.

And all of those jobs pay for other things, as all of the employees involved in this (not just construction employees) spend money on personal and business goods and services.

If this part of the economy was where the other parts are, the average GDP across all sectors of the economy (i.e., the whole economy) would be much higher. GROWTH in GDP would be substantially higher also.

It doesn't take a rocket scientist to see that the economy needs to be kick-started through the construction sector. That's how the economy traditionally recovers from recessions.

It isn't this time because there was simultaneously a housing and finance crash. Many homeowners can't sell because their homes are worth less than their mortgages. Many of those who would buy new homes (including those who lost homes) can't do so because of new requirements imposed by lenders for down payments and making financing expensive (or refusing it altogether) for all except those with exceptional credit records.

The Democrats could have addressed these things, but failed to because they expected lenders to act like patriots or social workers instead of like bankers, and made all of their programs voluntary.

The Republicans surely recognize this. They haven't telegraphed their intentions and plans because they don't want the Democrats stealing their thunder.

I suspect the Republicans will try to accomplish these things the easy way through a combination of changes to accounting laws governing asset values, and through simple bribery to lenders in which a quid pro quo relaxes lending standards on mortgages in exchange for repealing recently passed consumer credit protections and caps, as well as massive tax cuts and credits for lenders. I don't have the online time to elaborate this today.

You can look at a different take here:

http://www.salon.com/2012/08/24/whats_in_mitts_secret_housing_plan/

No time to proofread this. Apologies in advance for the typos.

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