Some recent items of interest

March 5, 2016


Tax Plan Showdown: Hillary Clinton vs. the Republicans

The Tax Policy Center has analysed Hillary Clinton’s various tax proposals, which means we now have data for the top three Republican candidates and the top Democratic candidate: Donald Trump, Marco Rubio, Ted Cruz, and Clinton. Click the links for details. Or just look at the charts below for the nickel summary.

You don’t need to look very hard, do you? One of these things is not like the others. The Republicans all give middle-income taxpayers a tiny benefit as a sop to distract them from the humongous payday they give to the rich. Clinton basically leaves middle-income taxpayers alone and makes the rich pay a little more.


Robert B. Reich Chancellor’s Professor of Public Policy at the University of California at Berkeley writes an “An Open Letter to the Republican Establishment”

“You’ve invested your millions in the GOP in order to get lower taxes, wider tax loopholes, bigger subsidies, more generous bailouts, less regulation, lengthier patents and copyrights and stronger market power allowing you to raise prices, weaker unions and bigger trade deals allowing you outsource abroad to reduce wages, easier bankruptcy for you but harder bankruptcy for homeowners and student debtors, and judges who will let you to engage in insider trading and who won’t prosecute you for white-collar crimes.

All of which have made you enormously wealthy. Congratulations.

But I have some disturbing news for you. You’re paying a big price – and about to pay far more. “


Here is the sort of stuff that underlies the rage felt by many of the US electorate. The National Center for Children in Poverty’s Basic Facts about Low-Income Children Report illustrates severity of economic instability and disparity in the US and says “Nearly half of American children living near poverty line”

“Nearly half of children in the United States live dangerously close to the poverty line, according to new research from the National Center for Children in Poverty (NCCP) at Columbia University’s Mailman School of Public Health. Basic Facts about Low-Income Children, the centre’s annual series of profiles on child poverty in America, illustrates the severity of economic instability and poverty conditions faced by more than 31 million children throughout the United States. Using the latest data from the American Community Survey, NCCP researchers found that while the total number of children in the U.S. has remained about the same since 2008, more children today are likely to live in families barely able to afford their most basic needs.

“These data challenge the prevailing beliefs that many still hold about what poverty looks like and which children in this country are most likely to be at risk,” said Renée Wilson-Simmons, DrPH, NCCP director. “The fact is, despite the significant gains we’ve made in expanding nutrition and health insurance programs to reach the children most in need, millions of children are living in families still struggling to make ends meet in our low-growth, low-wage economy.”

The actual data on child poverty in the US is available here. Shocking stuff.


Gaius Publiks analysis the data on the US primaries and says that the Democratic race is not over yet because “Clinton Will Build Her Biggest Lead on March 15. Sanders Will Erode It After That.”

“I’m keeping this short to put a very simple idea into your head. Because of the way the Democratic Party voting calendar is structured this year, Clinton’s largest lead will occur on March 15. After that, most of Sanders’ strongest states will vote.

What this means is simple:
Hillary Clinton will grow her lead until the March 15 states have voted.
Bernie Sanders will erase that lead — partly or completely — after March 15.
How much of Clinton’s lead he will erase depends on your not buying what the media is selling — that the contest is over.
In most scenarios where Sanders wins, he doesn’t retake the lead until June 7, when five states including California cast their ballots.
March 15 is the Ides of March; a good way to remember the date. The message — gear up for a battle after the Ides of March, and don’t let the establishment media tell you what to think. They won’t be right until the last state has voted.

If you want to stop reading here, this is all you need to know.”


Yanis Varoufakis says “Brexit will hasten collapse of European Union”

“The disintegration of the European Union will push us in to the…1930s,” Varoufakis said, predicting “a deflationary Deutsche Mark zone east of the Rhine and North of the Alps which would leave millions of working poor unemployed, and send the rest of Europe to “a cesspool of very high inflation”.

“The only people who will benefit from that will be the ultra nationalists – the Marine Le Pens, the Golden Dawns,” he said.

While Mr Varoufakis said that he would be tempted to vote to leave the European Union, were he to have a vote, in order to give Brussels and Cameron “a bloody nose”, he said that a vote to leave would turn Europe into “that kind of divided continent that would become a black hole that would consume Britain as well”.

“So it is not in the interest of Britain to get out of this terrible Europe,”


Wolfgang Münchau in the FT writes that “Europe enters the age of disintegration”

“At the Munich Security Conference earlier this month, I was not surprised to hear Manuel Valls, French prime minister, reaffirming his opposition to additional refugee quotas, but I was surprised to hear him criticise Ms Merkel directly. It was not France that invited the refugees, he said.
The political impasse over migrants tells us that the EU’s open borders are inconsistent with national sovereignty over immigration. The member states will have to choose. They will choose sovereignty.
After nearly 60 years of European integration, we are entering the age of disintegration. It will not necessarily lead to a formal break-up of the EU — this is extremely unlikely — but it will make the EU less effective.
What is certain is that the refugee crisis adds a further layer of complexity to the British debate. It is not clear what kind of EU the British people are being asked to remain in, or to leave. Danger lies ahead.”


William White, the Swiss-based chairman of the OECD’s review committee and former chief economist of the Bank for International Settlements (BIS) says “World faces wave of epic debt defaults”.

“The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up,” said William White, the Swiss-based chairman of the OECD’s review committee and former chief economist of the Bank for International Settlements (BIS).
“Emerging markets were part of the solution after the Lehman crisis. Now they are part of the problem, too.

“Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief,” he said.
“It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something,”


Gavyn Davies in the FT says that the “Global slowdown spreads to the eurozone”

“The eurozone “locomotive” is now spluttering….

The latest nowcasts show eurozone growth at only 0.8 per cent, compared to 2.3 per cent in late 2015. This result is substantiated by other similar tracking models – for example, the Goldman Sachs “Retina” model now estimates that growth is running at only 0.4 per cent annualised. Eurozone growth has therefore now dropped to below that in the US, even though the latter has remained disappointing at only around 1.0 per cent.”


The politics of Europe are shifting rapidly. “Merkel in Jeopardy: Germany’s European Hegemony, Refugees and Upcoming Elections” writes Mathew Rose.

“The inexorable political decline of Germany’s Chancellor Angela Merkel as well as her traditional opponents, the Social Democrats, is gathering pace. Upcoming elections in three German federal states on 13 March have given this process a considerable fillip. Both Ms Merkel’s Christian Democratic Party and the Social Democrats are expecting some harrowing results.

It seems that each new crisis that Ms Merkel creates is more formidable than its predecessor. Her mishandling of the refugee question – nationally and internationally – is making her conflict with Greece last year appear like a festival of love and unity.

Ms Merkel’s unilateral decision to accept all refugees from war ravaged nations has galvanised most of the EU and other European nations against Germany’s hegemony. Ministers of the EU nations Austria, Bulgaria, Croatia and Slovenia met last week in Vienna with their colleagues from the Balkan countries of Macedonia, Albania, Bosnia-Herzegovina, Kosovo, Montenegro and Serbia to discuss closing their borders to refugees, fearing that they too will suffer the fate of Greece and Italy, with tens of thousands of refugees stranded in their countries. These discussions were swiftly put into action, with Greece again bearing the brunt of Ms Merkel’s calamitous policy.

The refugee conflict is changing the political map of Europe. It has given the Visegrad Group (Czech Republic, Hungary, Poland and Slovakia) a political raison d’être. Viktor Orbán, once the shunned leader of Hungary due to his authoritarian regime, appears today more of a creditable leader in Europe than Merkel herself. Other EU nations are maybe less vociferous in their criticism of Ms Merkel, but are shunning her refugee policy and even closing their borders – even Scandinavian nations, which until recently was inconceivable. The destruction of the spirit of unity and solidarity in the EU, which Ms Merkel and her finance minister, Wolfgang Schäuble, have destroyed, has now permeated the policy of EU nations.”

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