What About The Rest of Us?

In one of the most appalling aspects of our current politics, our elites – elected officials, media lords and corporate chieftains, have swept the opinions and concerns of most Americans off the table to pursue their own agenda.

So we’re stuck with sterile political games focused on the national debt, even while a majority of Americans favor higher taxes on the rich and more aggressive action to reduce unemployment.

We get the highly touted insider trading conviction of a hedge fund billionaire while the Justice Department doesn’t pursue its own FBI’s massive evidence of the too big to fail bank’s fraud at the heart of the financial collapse.

It’s clear that whoever is setting priorities is not us. Take for example President Obama’s deficit commission, which has worked hard to legitimize the austerity agenda embraced by most of both parties. Not only was it stacked with well-known deficit hawks, It was made up of a collection of lifetime politicians, bureaucrats, with a CEO thrown in – because we wouldn’t want the CEOs to feel left out of any big idea brainstorming.

But what about the rest of us? Over at Campaign For America’s Future, Dave Johnson has been asking some intriguing, relevant questions.

For one, what would the deficit commission have looked like if it truly reflected the population of the country, rather than the backroom.

If a 100-person deficit panel truly reflected the country, it would present a stark contrast to the gang the president relied on:

•                19 people on the commission would receive some form of Social Security benefits, 12 of those as retirees. And on this deficit commission they get to talk when the ones making over $250K propose cutting Social Security.

•                43 of the commission members would have less than $10,000 saved up for retirement. 27 of those less than $1,000.

•                98 of the 100 members would make less than $250,000 a year.

•                50 of the members would come from households in which the total income of all wage-earners is less than $52,029.

•                13 would have income below the poverty level.

•                14 members would be receiving food stamps.

•                16.6% of the commission members would be un- or underemployed, and would be wondering why they are on a deficit commission at all instead of a jobs commission.

•                The commission would include the right proportion of factory and construction workers, and people who work in a kitchen, and work waiting tables, and teaching, and nursing, and installing tires, and all the other things that people do except, apparently, those on DC elite commissions. (People who do hard, manual labor get an extra vote each on what the retirement age should be.)

•                74 members would not have college degrees.

•                20 would not have graduated high school.

•                18 would speak a language other than English at home.

Under present circumstances it’s highly unlikely that the president would appoint a commission to consider the deficit or anything else for that matter that wasn’t stacked with wealthy insiders intent on slashing government services for anybody who is not like them. But highlighting the disconnect does point out in a particularly graphic way why those at the top have managed to get left out when its time to divide up the sacrifices.

 

 

 

 

 

Financial Crisis / Martin Column - 05/17/2011

Bringing it All Back Home

Looking at the photo of President Obama and his advisers tracking the mission to kill Osama bin Laden, I was struck by the president’s extraordinary intensity.

In the photograph I read not only his passion for the mission and his concern for the Navy SEALS, but his knowledge that his own job could be at stake.

Looking at Obama so present in the photograph, I couldn’t help but think about how absent he’s been from the economic crisis that’s afflicting millions of people here at home. Yes, he’s been worried about Bin Laden; yes, he’s obsessing about the deficit; and yes, he’s got to raise a billion dollars to fund his reelection. But we are still facing an economic crisis that has left housing behind, with the worst unemployment in decades.

So where’s the situation room for the unemployed and those losing their homes? Where are the presidential commissions and crack teams focused on tracking down new ways to salvage communities ravaged by foreclosure and joblessness?

I had the opportunity to hear President Obama at a rally a couple of weeks ago. He talked about how he stays up late reading letters from the unemployed. But the president’s rhetoric rang hollow and slick in the face of his lack of aggression in fighting for benefits for the long-term unemployed. He abandoned them at the same time that he extended the Bush era tax cuts for the wealthiest.

They’re the Obama era tax cuts now.

We’re in a bitter fight for real economic recovery here at home, to keep the most vulnerable from further suffering, to narrow the widening gap between rich and poor, to keep the country from losing its soul. It’s a complex mission, in uncertain terrain, against implacable foes.

The mission in Abbottabad required guts, rigorous planning, determination and flawless execution to accomplish what was deemed just and right. Now we need our president and all of his intensity fighting for us here at home.

 

 

Martin Column / President Barack Obama - 05/12/2011

Real Fraud, Faux Enforcement

The number one question people ask me when they find out I write about the financial crisis is: “How come nobody has gone to jail?”

I think I have found an explanation. His name is Robert Khuzami and he works as chief of the Securities and Exchange Commission’s enforcement division.

He is not the literal reason. SEC enforcement is civil, not criminal. So he’s not responsible for putting people in prison.

But focusing on Khuzami puts into sharp focus the conflicts at the heart of the government’s efforts to regulate and hold accountable the big banks.

Khuzami is a former federal prosecutor. But he came to the SEC from a high-profile position he took after his stint as a lawman: he served as general counsel to Deutsch Bank, one of the world’s largest investment banks, which had a massive business in the securitized mortgage loans, and was the recipient of nearly $12 billion in “backdoor bailout” federal funds funneled through AIG.

The Wall Street Journal reported that Khuzami was the first SEC enforcement chief to come directly from a big bank. He is one in a long line of Obama economic appointments with strong ties to the financial industry, who either worked for the banks directly or in their interests by favoring deregulation that was one of the major causes of the economic collapse.

Now Khuzami’s former employer, Deutsch Bank, is in hot water with the feds, who sued the bank earlier this month alleging that the “bank committed fraud and padded its pockets with undeserved income as it repeatedly lied so it could benefit from a government program that insured mortgages,” Business Week reported.

For the SEC, it’s all kosher because its stringent recusal policy assures that Khuzami won’t work on any Deutsche Bank cases.

Remember that Khuzami was not just a guy punching a clock. He was the bank’s general counsel, so he supervised legal issues for the firm.

So here was a former federal prosecutor who, in the midst of the go-go real estate boom, apparently thought it was OK for his bank to commit mortgage fraud. Zero Hedge dug up his financial disclosure statement, which reveals he was compensated nearly $4 million in salary and bonuses between 2006 and 2009, and may lose money if Deutsche Bank suffers as a result of the government’s lawsuit.

The president and the SEC, knowing what kind of mischief the too big to fail banks were engaged in during the boom, and how Khuzami had profited from it, thought it was a terrific idea to appoint somebody like him to go after his former cronies.

Khuzami’s tenure at SEC has been marred by accusations that he gave two Citibank executives preferential treatment in agreeing to drop charges against them after he met secretly with their lawyer. In January, the SEC’s inspector general said it was investigating the matter.

Is there no one but former bankers available to work in the financial sector? The president, with $1 billion to raise to fund his reelection effort, has been unwilling to dig into the fraud at the heart of the financial collapse. Until he does, the economic recovery will be built on quicksand.

 

AIG / Martin Column / President Barack Obama / Securities and Exchange Commission (SEC) / Too Big To Fail - 05/11/2011

Billion-Dollar Campaign Bus Leaves Unemployed Behind

Congress and the president threw the long-term unemployed under the bus last year in the deal to extend the Bush era tax cuts for the wealthiest Americans.

As the president and his fellow politicos revv up his re-election campaign bus, are they now poised to run over the 99ers, as the long-term unemployed are known?

The head of the Congressional Black Caucus, Rep. Emmanuel Cleaver, appears ready to concede without a fight that the cost of extending unemployment benefits to the 99ers is “prohibitive.”

Two members of Cleaver’s caucus, Reps. Barbara Lee and Bobby Scott have proposed H.R. 589 to fund some benefits for the long-term unemployed.

Once again, Congress appears to be unwilling to find the $14 billion to extend unemployment compensation for the more than 1 million Americans out of work for at least 99 weeks.

President Obama seems more preoccupied with fighting for the $1 billion he says he will need for his reelection campaign.

How much could one of those 99ers contribute to the president, or anybody’s political campaign, for that matter?

That’s what occurred to me when I read who Obama – the man who at one time was supposed to transform American politics – had chosen to run his campaign to keep his job.

That would be Jim Messina, one of the undisputed experts at raising massive corporate campaign cash, a former staffer for Sen. Max Baucus, one-time head of the one Senate’s Finance Committee and one of the top vacuums of special interest contributions ever, according to Public Citizen.

So much for the grass roots that got the president where he is today. He’s dancing with Wall Street, big pharm and the insurance industry now. Messina apparently takes a dim view of the grass roots activists and their issues, which tend to clog up his vacuum cleaner.

For the corporate titans Obama will be relying on, it’s been a very, very good recovery.

For a lot of the grass roots folks who walked precincts and made phone calls in 2008, not so much. They’ve lost jobs, health insurance, homes, savings, pensions, and security.

Minorities have been especially hard hit, USA Today reports, by a “dual system” of finance. More than 20 percent of African-Americans and Hispanics will lose their homes in the present housing crisis, the Center for Responsible Lending contends.

Meanwhile the long-term unemployed, many of them older workers, face high hurdles reentering the workforce. Younger people face their own challenges, often taking lower paying jobs when they can find employment.

The politicians may be giving up on those of us who are unemployed but we shouldn’t. Call your congressperson and demand that they find the money for H.R 589.

 

 

 

 

 

 

Martin Column / President Barack Obama / Uncategorized - 04/05/2011

Obama Visits the Nasty Neighbor

President Obama paid a call on the U.S. Chamber of Commerce a few days ago. No organization has done more to obstruct and derail the president's policy agenda: on behalf of the massive industries that fund its $200 million budget, the Chamber fiercely opposed health care reform, financial reform, the Consumer Financial Protection Bureau, environmental protection, and consumer access to the courts, often at the expense of small businesses.  Last year, it killed a bill in the Senate that would have stripped big business of tax breaks when they outsource American jobs to other countries. Its litigation shop, lavishly supported by a who's who of corporate defendants in civil and criminal matters, has been remarkably successful in protecting big business in cases before the U.S. Supreme Court.  The U.S. Chamber is a highly partisan operation that will never cede an inch of ground to the President or his party.

Still, it wasn’t so much that Obama went to Chamber, or what he said when he got there, that bothered me. It was that he walked there from the White House.

The Chamber's headquarters is only three tenths of a mile from 1600 Pennsylvania Avenue, a five minute stroll across Lafayette Park. Most Americans would never consider taking the car (except maybe Angelenos).

But when the President rolls, dozens of vehicles, from ambulances and TV trucks to communications and heavily armed Secret Service vans, go with him. It's spectacle, but, as President Reagan understood, the motorcade is a potent symbol of the power and majesty of the presidency.

Going on foot to the headquarters of corporate America, Obama surrendered not merely the trappings of power but, inescapably, a measure of the dignity of his office.

A year ago, Obama hoofed it back to the White House from a speech at the Chamber. That was right after his annual physical, and Obama joked that he needed to walk off some of his cholesterol. More importantly, that was before the mid-term elections, when the President’s party got walloped, thanks in no small part to the $31.7 million the Chamber spent around the nation, 93% of which went to elect Republicans.

His latest visit wasn't exactly "hat in hand," but by the President's own reckoning it was pretty close: “I'm here in the interest of being more neighborly," Obama told his hosts. "Maybe if we had brought over a fruitcake when I first moved in, we would have gotten off to a better start.”

"I'm going to make up for it," the President promised. Some of us think he's already done plenty for big business, and not quite so much for average Americans, most of whom are struggling to survive the aftermath of the debacle on Wall Street.

Mr. Obama was careful not to completely prostrate himself before the Chamber's bigwigs. But every remark that could be considered a point of disagreement was tempered with a nod to the Chamber’s ideology. The President defended health care reform, but instead of discussing the human toll of the private insurance mess, explained that it “made our entire economy less competitive.” He warned that “the perils of too much regulation are matched by the dangers of too little,” referring to the financial crisis, but did not discuss lost jobs or homes. Instead he said, “the absence of sound rules of the road was hardly good for business.” Invoking one of John F. Kennedy’s most memorable speeches, Obama said, “as we work with you to make America a better place to do business, ask yourselves what you can do for America.” But the man who appeared before the Chamber conceived of his job far differently than he did when he asked Americans for it in 2008:  “the final responsibility of government,” President Obama told the Chamber audience, is “breaking down barriers that stand in the way of your success.”

This week’s stroll was part of the President’s Chamber charm campaign, which began in earnest with the State of the Union speech in January, when the President seemed to declare the recession over because  “the stock market has come roaring back” and “corporate profits are up.”

For one in five Americans still out of work, for the one in four homeowners whose homes are worth less than the amount they owe on their mortgages, that was a painful moment reminiscent of George Bush’s “mission accomplished” speech back in 2003 about the Iraq War. Obama spent the rest of the State of the Union on a combination of platitudes and pandering to his opponents, pledging among other things to get rid of unnecessary government regulations - one of the Chamber's perennial priorities.

There are plenty of other places the president could have gone if he was in the mood for an outing. The national headquarters of the AFL-CIO is only a few steps away from the Chamber, but he has never made that trip, as the California Nurses Association pointed out. Sadly, that would not be as controversial a venue as the President might fear: the AFL issued a joint press release with the Chamber praising the president’s State of the Union speech. Still, a visit from the president would have made a statement to the nation about the role working women and men play in what is known as the "real" economy (as opposed to Wall Street and the Money Industry). A fairly straightforward jog down Pennsylvania Avenue would have taken Mr. Obama to Consumer Watchdog's office on Capitol Hill.

We'll be watching where the President wanders to next. If you know what you are doing, and are clear about where you want to go, navigating the nation's capital isn't hard. But for newcomers who don't, it's very easy to get lost in D.C.

Harvey Column / Outrage / Uncategorized - 02/11/2011

Phony Moderates, Real Power

Beware wolves dressed in moderates’ clothing.

Especially the “fresh thinking” as gussied up by the group calling itself “Third Way,” which tries to put a genteel, highbrow facade on its advocacy for increasing austerity and financial insecurity for the majority of Americans.

Digging beneath the sunny platitudes about promoting growth, you will find that the organization is chock full of high finance types and their political servants, so it’s no surprise that they’re more interested in rethinking what they like to belittle as entitlements and boosting too big-to fail banks than they are in raising questions about the financial system.

And they’re not laying down these proposals just to hear themselves talk.

These people have real power to set the terms of the debate and strongly influence decision-makers.

The most obvious example is President Obama’s new chief of staff, Bill Daley, the former top official of J.P. Morgan who sits on Third Way’s board.

He’s just the latest in a string of  bad appointments the president has made to oversee the nation's economy, from Tim Geithner and Larry Summers to Gene Sperling, the Goldman-Sachs alum who fought for financial deregulation in the Clinton White House, who was recently appointed to replace Summers on the Council of Economic Advisers. Then there's Jeffrey Immelt, GE’s CEO the outsourcing, plant-shutting ace who Obama put in charge of reducing the unemployment rate.

For his part, Daley seems to have earned his job as the president’s chief adviser by fighting against financial reform, especially from the Consumer Financial Protection Bureau.

The mainstream media has worked hard to foster the idea of centrism, with Third Way as a prime proponent of “moderate ideas.”

But there’s nothing moderate about the continuing unhealthy influence of corporate America over our political process, fostering policies that are turning us into something more like a Third World country polarized between haves and have nots than the land of opportunity for all.

There’s nothing moderate about the fear-driven wealth and power grab, otherwise known as the federal bailout, that entrenched the wealth built for a select few in the years of the bubble economy, while it increased economic insecurity for the rest of us. As Neil Barofsky, TARP’s inspector-general, pointed out in his most recent report, it also entrenched the political and financial clout of “too big to fail” financial institutions.

There’s nothing moderate about the austerity agenda of shared sacrifice which consists of cuts to Social Security, Medicare and education.

There’s nothing moderate about the attack on the economic system that was built in the wake of the Great Depression and World War II, which combined the power of the free market with a system of regulation and safety nets. That attack, with its intellectual underpinnings in the work of the economist Milton Friedman, was launched in the 1980s and has been carried forward by politicians of both parties.

Meanwhile, two of the most impassioned politicians standing up to that attack, from opposite ends of the spectrum, would probably be characterized by the mainstream media as extremist: Sen. Bernie Sanders, the independent socialist from Vermont, and Rep. Ron Paul, the libertarian from  Texas. Those two men, who would probably find much to disagree on, worked together to pass a bill to audit the highly secretive activities of the Federal Reserve during the bailout.

You may or may not agree with Sanders or Paul either, but they aren’t afraid to challenge a status quo which props up the powerful while undermining the powerless.

You can scour Third Way’s materials and you won’t find anything that challenges the risky practices of financial institutions that wrecked our economy. You won’t find anything that challenges the power equation that props up the status quo. Behind its rhetoric of moderation, Third Way knows which side it’s on.

Consumer Financial Protection Agency / Financial Reform Legislation / President Barack Obama - 02/08/2011

Night on Fantasy Island

As a snapshot of the wildly dysfunctional state of our political union, last night’s festivities were a smashing success. All sides were serving up plenty of mom, apple pie and platitudes while ignoring what’s actually left on plates of millions of Americans –nothing.

I did find at least something to agree with in what each of the speakers said. Who can quarrel with President Obama when he calls on us to “win the future?” And I want my government as lean and mean as Paul Ryan and the Republicans do, without any wasteful subsidies that boost corporate tycoons and their overseas expansion rather than creating decent-paying jobs here at home.

It’s true that the tea party’s spokeswoman, Rep. Michele Bachman of Minnesota, looked like aliens had captured her brain and were speaking through her. Maybe we would have been better off if the aliens had captured Obama and Ryan too. At least Bachman briefly took note of the high unemployment rate before she went off to into her own rhetorical fantasyland.

That’s more than you can say for President Obama, who was pitching us his hallucination that his new pals from the Chamber of Commerce are going to beat their corporate profits into ploughshares in partnership with government, in an effort to foster new technologies and growth that we all share. Forgive me if I can’t get too worked up about this. Didn’t we try this government-corporate partnership recently? Wasn’t that what the bailout was?

Back here on Planet Earth, that didn’t work out so well for a lot of us, though it does seem to have worked well for the president’s friends at General Electric and JPMorgan Chase.

Both Ryan and Bachman aren’t interested in any partnerships; they want to dismantle government altogether so that GE, JPMorgan and the rest of the corporatariat can run the show without any interference at all. The only difference is that Bachman would like to do it faster, with less nice talk, than Ryan.

Neither the president, Ryan, or Bachman could focus on reality long enough to mention the long, steep decline of the middle class or the on-going foreclosure crisis, or offer any specific ideas on addressing those very real issues.

Back here on Planet Earth, we’re going to have to harness all of our ingenuity, strength and diversity just to wrestle our political system back from these leaders and their corporate backers before they plunder what’s left of it.

Congress / Financial Crisis / Foreclosures / Martin Column / Outrage / President Barack Obama - 01/26/2011

The Road From Memphis

President Obama and his family celebrated Martin Luther King’s birthday by painting fruit characters on a schoolhouse wall as part of anti-obesity campaign.

Evoking King’s legacy, the president didn’t mention Memphis.

That was the slain civil rights leader’s last campaign. He went to support a hotly contested unionization effort on the behalf of the city African-American sanitation workers.

Listening to President Obama’s remarks on King’s birthday, you might think that the slain civil rights leader was mainly about encouraging volunteerism.

No doubt child nutrition is an important issue. But reducing King’s legacy to some bland notion of community service seriously understates what King, and the others who struggled alongside him, were about.

King upset people. He challenged power. He divided the country. During his lifetime, politicians demonized him. Law enforcement wiretapped and harassed him.

King, meanwhile, moved from a struggle for civil rights for minorities to a broader struggle for economic rights.

In Memphis, conflict had been building since February 1968, when two black sanitation workers were crushed to death when the compactor mechanism of their trash truck was accidentally triggered during a heavy rain.

On the same day in a separate incident also related to the bad weather, 22 black sewer workers had been sent home without pay while their white supervisors were retained for the day with pay. A couple of weeks later most of he city’s black sanitation workers began a strike for job safety, better wages and benefits, and union recognition.

The mayor, Heny Loeb, staunchly opposed the workers' demands, especially union recognition, and he resisted all efforts to resolve the strike.

King had led a march in support of the strikers in late March but he was deeply distressed when it turned violent and one man was killed. Nonetheless he returned to the city a week later to participate in another march. Several days before the march was scheduled, as King stepped out of his motel for dinner, he was assassinated.

Only after King’s death did the sanitation workers win their struggle for better working conditions and union recognition.

Is it any wonder that President, who every day binds himself more tightly to the interests of Wall Street and the Chamber of Commerce, wouldn’t want to invoke this more challenging aspect of King’s legacy?

Obama’s election can be seen as the historic culmination as just one of King’s ambitious goals. But on the road that took King to Memphis, we still have a long way to go.

Martin Column / President Barack Obama - 01/18/2011

Around the Web: Now, They Won't

I remember when the Obama administration burst into office leading the nation in its campaign mantra: Yes we can. Later they adapted a new mantra to acknowledge how bad the economy was but how hard they were trying to fix it: It could have been worse. After the Democrats got walloped in the midterms, the president adjusted with his latest mantra: this was the best I could do.

Now his treasury secretary has offered the administration’s latest spin: No, you can’t.

Tim Geithner, the architect of so much of the administration’s no questions asked bailout of corporate America, is refusing homeowners facing foreclosure access to legal assistance to fight to save their homes, Zach Carter reports at Huffington Post.

Democrats from foreclosure-ravaged states are working on legislation that would overrule Geithner’s edict but the leadership isn’t interested.

This in spite of the massive failure of the administration’s foreclosure relief program, even when mortgage servicers are wrongfully attempting to throw people out of their homes.

According to a recent survey, banks started foreclosure proceedings against 2,500 homeowners while they were in the process of getting their mortgages modified.

When it comes to fixing the inadequate programs they’ve offered to fix the foreclosure mess, the Obama administration has offered a consistent mantra: No, we won’t.

Meanwhile, the state attorney general leading the 50-state investigation into the foreclosure scandal, Tom Miller, has some pretty tough talk.

Unlike the Obama administration, Miller comes right out and says that the mortgage principal should be reduced as part of any settlement with mortgage servicers. “One of the main tools needs to be principal reductions, just like in the farm crisis in the 1980s,” Miller said. “There should be some kind of compensation system for people who have been harmed. And the foreclosure process should stop while loan modifications begin. To have a race between foreclosures and modifications to see which happens first is insane.”

And yes he will, Miller insists, put financial criminals in jail.

Around the Web / Foreclosures / Martin Column - 12/16/2010

In Taxbreakistan, the Usual Casualties

Rather than confronting the country’s growing economic disparity and attempting to reduce it, our political leaders are pursuing policies that just make it worse.

Remember when we were told that the bailout was supposed to save our economy? It worked amazingly well for those who are well off – the banks are back in the black, the bankers are pocketing huge bonuses, corporate profits are soaring and the stock market is humming along.

But for those less fortunate, the situation remains dire: unemployment is stuck around 10 percent, wages are stagnant, state and local governments face staggering cutbacks in all services, and foreclosures continue unabated.

The most recent example of this glaring callousness is the deal President Obama reached with GOP leaders to extend the Bush-era tax cuts for 2 years in exchange for keeping unemployment compensation coming for 13 months.

Both the president and the Republicans profess to be unhappy with everything they had to give up and said nasty things about each other. The president insisted it was simply the best deal to be had to get some stimulus in the face of Republican intransigence.  But the president never took to the airwaves to challenge the Republicans on the tax cuts or the unemployment insurance. After his party’s “shellacking” in the midterms, he just headed for the back room to make a deal on his own, without ever trying to galvanize public opinion, which according to the polls, wasn’t even sympathetic to the high-end tax cuts.

So far the Senate has appears ready to pass the deal with votes to spare but the House has balked.

Back when he was candidate Obama, the president had no qualms about proclaiming just how unfair the tax cuts for the wealthiest were, how little they do for the rest of the economy, and how worthy they were of opposing. Now the president labels as `sanctimonious’ those who agree with the position he took so forcefully when he ran for president.

But the tax cuts for the wealthy won’t work any better now that that they’re the Obama tax cuts than they did when they were the Bush tax cuts.

The Center for American Progress breaks the $954 billion Obama tax cut deal into two parts: first, a $133 billion tax cut for the wealthiest, including $120 billion in lower taxes for the top 2% of U.S. households, plus $13 billion in estate tax savings. The other $821 billion consists of government cash for unemployment benefits, tax cuts for the middle class and small-business job-creation incentives.

The deal is supposed to create somewhere between 2.2 and 3.1 million jobs, though some find those estimates vastly inflated. CAP contends that the deal offers a relatively expensive way to create those jobs.

Economist Dean Baker questions a lot of the phony hysterics being used to sell the deal as scare tactics. He doubts the president’s assertion that is the only way or last chance to extend unemployment benefits. If unemployment stays above 8 percent as the Federal Reserve projects that it will, both Republicans and the president will feel pressure to extend benefits.

But one of the worst aspects of the deal is the way that it actually raises taxes on the working poor, according to the Tax Policy Center. That’s because the president has agreed, as part of the deal, to phase out his own Making Work Pay tax cut (implemented as part of his previous stimulus package) and replaced it with a temporary Social Security payroll tax cut. The Making Work Pay tax cut was focused on the working poor, giving single people with incomes of at least $6,452 and less than $75,000 a $400 tax break and couples making less than $120,000 an $800 tax break. People at the lower end of those income ranges would do worse under the present Obama tax cut deal. Wealthier taxpayers meanwhile, stand to do better with the payroll tax break than they did under Making Work Pay, which phased out at higher income brackets.

To me the tax deal looks suspiciously like the bailout – shoveling money to those who have suffered the least, without any conditions imposed to require that they plow some of that cash back into the economy, only the vain hope that they will share their prosperity.

We assumed that’s what the bailout recipients would do with all of our tax money.

We know now how that worked out.

Federal Reserve / Martin Column / President Barack Obama / TARP - 12/14/2010