Daily Archives: August 3, 2012

Fracking: New Dangers

Greg Palast’s web site has the article Fracking: New Dangers.

I haven’t posted anything from Greg Palast in a while. Here is an interview from the above article. The interview takes place in Dublin, Ireland where he is investigating and speaking about the dangers of proposed fracking in Ireland. The implications for the United States are just as frightening.

Is there a safe way to frack? Probably: but not profitably; and certainly not within the geology of a little emerald isle. I am weary of appearing at scenes of death and destruction when cement fails, pipes crack and tremors spew poisons only to hear a gas or oil company executive’s PR flack issue an apology. I doubt those apologies will sound better in Gaelic.

All that natural gas that has been found in the United States and that will make us energy independent will come at a horrendous ecological cost.

President Obama Speaks on Middle Class Tax Cuts

Here is the President’s speech that he gave a few moments ago at noon on August 3, 2012. There is also an article Extending Middle Class Tax Cuts for 98% of Americans and 97% of Small Businesses.

Rebuilding our economy starts with strengthening the middle class. Extending tax breaks on 98 percent of families now would give hard working Americans the security and confidence they need.

He noted something that I have been sharing ever since I saw the comment on the web. The tax cut on the first $250,000 of income is for everyone, not just the middle-class. That means you can make considerably more than $250,000 and your tax bill would still be lower than it would if we let all the Bush tax cuts expire.

The President failed to point out that tax cuts for the ultra-wealthy to invest in non-productive financial derivatives actually hurts the economy. Some of these people would be job creators during more normal times. With the middle-class under financial pressure, there is no reason for the wealthy to create jobs now. There aren’t enough customers for the people who already have jobs.

It is anticipation or the actual appearance of more customers in the economy that drives job creation. Otherwise the “job creators” just park their money in these financial derivatives until they see an uptick in the economy. It is middle-class behavior that spurs the “job creators” to create the jobs.

At the moment, it is not high taxes and it is not regulation that keeps jobs from being created. At the moment it is solely a lack of demand from the middle-class.

This is to say that at some other moment in the future, the factors that the Republicans keep harping on may be relevant. We should only be so lucky. We will never get to that happy moment when taxes and regulation are holding back the economy if we never get the economy moving in the first place. I say that will be a happy moment, because high taxes and over-regulation are problems that the Congress has the power to solve.

Obama weighs in on tax cuts, reducing deficit

The Orlando Business Journal has the article Obama weighs in on tax cuts, reducing deficit at Rollins College visit .

I’m not going to pay for a massive tax cut for folks who don’t need it by gutting the investments that have always kept us at the forefront and have always kept our middle class strong.”

I like this way of stating the consequences of giving tax cuts to people who do not need them and who won’t put them to work stimulating the economy.  It wouldn’t hurt to emphasize my second point.  Besides the issue of fairness, it just would not be good for the economy to keep taxes low on the top 2% so that they can invest the money in non-productive financial derivatives.

The bottom 98% will spend a larger fraction of their tax cut on consumption which will spur job growth to meet the demand of this increased consumption.  To get an even larger fraction of the money into economic stimulus would require direct government spending.  This better path to economic recovery has gone through such an onslaught of negative propaganda, that maybe the President thinks it would be too tough a sell in this election year.