Christmastime: US missiles killed 54 people in Pakistan yesterday. Finished your shopping yet?
Are The Long-Term Unemployed Saved Or Screwed? – Advocates for the jobless are divided on whether a deal reauthorizing emergency benefits for a full year has saved or screwed the unemployed. Fans of the deal, including the White House, the AFL-CIO, and the National Employment Law Project, say legislation passed by Congress Thursday evening provides the longest-possible — and nearly the longest-ever — reauthorization of extended unemployment benefits, despite fierce Republican opposition to the extension. Many Democrats in the House of Representatives remain unimpressed. "This legislation will push struggling American families off their last lifelines during the worst recession since the Great Depression just to give tax breaks to the super rich," said Rep. Jim McDermott (D-Wash.) in a statement Friday morning. McDermott’s statement reflects many Democrats’ concern that the fate of the jobless aid one year from now will be decided by a Republican-controlled Congress at a time when the employment situation isn’t expected to be much better than it is now.
When unemployment extensions end, a movement rises: the 99ers…Out of full-time work since 2006, LaDona King says she’s nearly penniless, having used up her retirement savings, exhausted unemployment benefits, and tapped relatives for as much help as possible. Before long, she may have to move in with one of her two sisters. But Ms. King, of Escondido, Calif., is far from giving up. Even as she spends 40 to 55 hours a week looking for work, she’s founded a swelling national grass-roots movement to aid people like her: the so-called 99ers. Named for the maximum number of weeks the jobless can now collect unemployment insurance (UI), these long-term jobless are clamoring for faster job creation and extended jobless benefits. In the short term, many activist 99ers are pushing for passage of the Americans Want to Work Act, a Senate bill that would provide 20 additional weeks – a so-called Tier V – of unemployment insurance. The 99ers, who often find each other through social media, also talk about organizing around other related issues. Although their ranks are growing, they face an uphill battle persuading Congress to act.
It’s a Great Time to Be Rich – A bonanza of new and extended tax benefits could make it as easy as ever for the rich to stay that way. Under legislation approved by the U.S. Senate on Wednesday, Dec. 15, and now moving on to the House, savvy wealthy Americans would be able to capitalize on an environment in which their tax rates on income and investments remain at historic lows. Also, new rules would make it possible to pass on fortunes to heirs with less fuss and lower taxes than all but a brief period of the past 80 years. It’s a far cry from the 70 percent bite the federal government took out of the largest incomes and estates as recently as 1980. "The climate we’ll have after this legislation is extremely favorable for wealthy families," The good news for the rich starts with income tax rates, which for top income groups would remain 35 percent , a rate enacted by former President George W. Bush in 2003. Except for a period from 1988 to 1992, the top tax rate has never been this low since 1931.
US Wage Stagnation Leads to Rampant Inequality – Alan Blinder has a great story in the Wall Street Journal today about the US economy and how impossibly tilted it is toward the rich: Those of us who live near the top of the income pyramid are doing very nicely, thank you. Yet our government keeps showering us with Christmas presents. Meanwhile, economic life is pretty miserable for those near the bottom and is getting worse for those in the middle. Does this strike you as fair? When it comes to wages, the basic story of recent decades is redolent of Scrooge. Real average hourly earnings (excluding fringe benefits) now stand roughly at 1974 levels. Yes, that’s right, no real increase in over 35 years. That is an astounding, dismaying and profoundly ahistorical development. The American story for two centuries was one of real wages advancing more or less in line with productivity. But not lately. Since 1978, productivity in the nonfarm business sector is up 86%, but real compensation per hour (which includes fringe benefits) is up just 37%. Does that seem fair?
SEC Goes Deeper in Foreclosure Fraud Examination – The Securities and Exchange Commission has issued additional subpoenas for documents from the big banks in a growing probe over servicer behavior and foreclosure fraud. They seem particularly interested in securitization, and whether the assets, i.e. the mortgage and the note, were ever properly conveyed to the trusts. U.S. regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization, two sources familiar with the probe said. The Securities and Exchange Commission launched the new phase of its investigation by sending out a fresh round of subpoenas last week to big banks like Bank of America Corp (BAC.N), Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N), Goldman Sachs Group Inc (GS.N) and Wells Fargo & Co (WFC.N), the sources said.
Ezra Klein – Republicans embrace ObamaCare, call it Ryan/Rivlin – If you’re looking for a description of the Ryan/Rivlin Medicare reforms that have gained so many admirers on the right, Matt Yglesias has a good write-up of the idea. But I’d add another way of explaining the proposal: The Ryan-Rivlin plan basically turns Medicare into Obamacare. And in that context, Republicans love the idea behind ObamaCare and think it’ll save lots of money. Under the Ryan-Rivlin plan, the current Medicare program is completely dissolved and replaced by a new Medicare program that "would provide a payment – based on what the average annual per-capita expenditure is in 2021 – to purchase health insurance."Sound familiar? As Matt says, this doesn’t save money. In theory, it actually costs money, as private insurance is more expensive for Medicare — and that’s true both in the private market, and in the quasi-private Medicare Advantage market. What saves money is capping the amount paid to seniors, so they either have to pay more for their care or get less.