This opinion piece,  The President Is Missing, by Paul Krugman was brought to my attention by LlandaR. In the article Krugman says:

What’s going on here? Despite the ferocious opposition he has faced since the day he took office, Mr. Obama is clearly still clinging to his vision of himself as a figure who can transcend America’s partisan differences. And his political strategists seem to believe that he can win re-election by positioning himself as being conciliatory and reasonable, by always being willing to compromise.

I can believe that Paul Krugman is on to part of the problem, but I think that the bigger problem is that President Obama does not understand the situation and the stakes.  That is why I have called for an intervention from economists such as Krugman, Kuttner, Stiglitz, Galbraith, Romer, Reich, etc.  They have to find out what Obama understands about the damage that highly unequal wealth distribution does to the chances for an economic recovery.  If he doesn’t understand the issue, how can he be expected to take a strong stand?

Earlier today, I posted the graphic that shows Wealth and Tax Distribution. While the wealthy top percent or so do earn an inordinate fraction of the income, the Republicans point out that they pay an even higher percentage of the income taxes. However, the Republicans never tell you how income does not include such items as unrealized capital gains.  That is why I felt a measure of wealth versus taxes was a better indicator of the disparity.

Another post I made today, The L Curve Of Income, points out that:

In Bill Gates’ best year he increased his net worth by $50 billion!

Now the naysayers are going to claim unrealized gains don’t count because they could go away almost as easily as they came.  It is true that there is year to year volatility, but the long term average increase in the value of the American stock market is on the order of 10% to 12% per year.  So the wealthy may have their ups and downs, but all they have to do is invest in an index mutual fund to make an average of 10% to 12% a year in increased wealth.  As long as they leave it unrealized, they pay no taxes on it.

You hear conservatives tell you that the wealthy pay a larger percent in taxes than their income would merit. What you don’t hear is that a lot of their increase in wealth is not counted as income. I thought I would try to find a plot of wealth versus taxes. Here is one example that I cannot vouch for, but since it is in nice colors, it must be true.

Wealth -Tax Distribution

I decided to get graphic. The online version allows you to zoom in and out.

I have decided that I will be able to attend an American Dream House Meeting on Saturday, July 15, 2011.

The email that I have just received has a link to the agenda for the meeting and a link for organizing a rapid response Congressional action on Monday.

Professor James Galbraith of The University of Texas, says we’ve entered “a tragic moment” in history where our elected officials are more apt to put ideology before the good of the entire country.

“This is not the way we should be perusing these issues,” he tells Aaron in the accompanying interview. “We run the risk, first of all, of turning our government into a series of blackmail negotiations, where the full faith in credit of the United States government … becomes a kind of football for the various political agendas: the Republican agenda but also the President’s agenda on a long term deficit deal.”

But Washington politicians have it “totally wrong,” according to Galbraith who believes austerity measures amount to “a wanton piece of cruelty” on lower income Americans. Furthermore, he argues America’s long-term deficit problems are “completely disconnected” from current U.S. borrowing costs, which he notes remain relatively (and historically) low.

“My view is we’re in a tragic moment where public policy is doing real harm on a pretense of accomplishing something that’s absolutely not going to be accomplished,” Galbraith says.

Over the years I have read and enjoyed some of what Prof. Galbraith has written. This is the first time I have seen him and heard him speak. What a refreshing point of view.

What other politician talks sense the way that Bernie Sanders does?

There is a website where you can contribute to keep Bernie Sanders in the Senate.

I received this cartoon in an email from RootsAction At Our Limit campaign

The politicians in Washington have it all wrong. Republicans and Democrats are focused on the debt ceiling – and are preparing to make cuts to Medicare and Social Security while keeping huge tax cuts for billionaires. We’re saying no way. We want to talk about what most Americans need in the budget – and how we can pressure Democrats to hold the line and push our needs forward.

I have decided that it is about time to put the label The Big Lie to the meme that the Republicans keep repeating every chance that they get. It is about time we put in as much effort spreading The Big Truth. Please help.

One way to raise awareness of this article is to do a Google search on the phrase “The Big Truth versus The Big Lie”

Doing this, I found another blogger who has beat me to the punch, The Big Lie Versus The Big Truth.

His post led to the Robert Reich post, The Big Lie.  I have chosen to link to a different version of the article. From The Christian Science Monitor we have Will Obama repeat the Republicans’ Big Lie?, where Reich said:

The short-term solution is for government to counteract this shortfall by spending more, not less. The long-term solution is to spread the benefits of economic growth more widely (for example, through a more progressive income tax, a larger EITC, an exemption on the first $20K of income from payroll taxes and application of payroll taxes to incomes over $250K, stronger unions, and more and better investments in education and infrastructure.)

But instead of telling the truth, Obama has legitimized the Big Lie by freezing non-defense discretionary spending, freezing federal pay, touting his deficit commission co-chairs’ recommended $3 of spending cuts for every dollar of tax increase, and agreeing to extending the Bush tax cuts for the wealthy.

Will Obama stand up to the Big Lie? Will he use his State of the Union address to rebut it and tell the truth? Maybe, but so far there’s no evidence.

The Big Lie

Revoking the Bush tax cuts for the wealthy is a job killer.

The Big Truth

Revoking the Bush tax cuts for the wealthy is a job creator.

Once we put the label The Big Lie on it,  it becomes much more obvious that a great amount of effort needs to be exerted to defeat it.  I think the key to all future success for Progressive policy starts with the defeat of The Big Lie.

So here is a list of previous posts dealing with this and The Big Truth.

• “Aftershock: The Next Economy and America’s Future”
• Robert Reich – Invest in America
• Barack Herbert Hoover Obama
• Obama Outrage
• How the Middle Class Got Screwed
• Obama’s debt talks alarm Democrats about Social Security
• GOP hardens resolve on debt talks after poor jobs report
• The President’s Jobs Plan (Not)
• Another Decade of Bush Tax Cuts Will Cost More than Twice as Much as the First Decade
• Corporate Tax Escapees and You
• Obama Plays The Republicans Like A Fiddle
• President Obama Needs An Intervention
• The Obama-Keynes Mystery
• Senator John Kerry, Almost Republican, From Massachusetts
• The Right Solution At The Right Time
• The U.S. Has Waged A War On Jobs
• Chicago Calvinball – The Chicago School of Economics
• Harry Belafonte Discusses President Obama
• The Shock Doctrine the book
• The Shock Doctrine the lecture

In his blog post, Why Mitch McConnell Will Win the Day, Robert Reich explains the following:

Senate Minority Leader Mitch McConnell’s compromise on the debt ceiling is a win for the President disguised as a win for Republicans. But it really just kicks the can down the road past the 2012 election – which is what almost every sane politician in Washington wants to happen in any event.

I agree that it is a win for the President, with one proviso. The President needs to get out there and vigorously sell the American people on his economic plan.  Although, in the final analysis, Robert Reich identifies the key to success.

Washington insiders will consider the McConnell compromise a win for Obama. But the rest of the country hasn’t been paying much attention and won’t consider it much of a win for either side. Their attention is riveted to the economy, particularly jobs and wages. If those don’t improve, Obama will be a one-term president regardless of how the GOP wants to paint him.

With the current divided government, can Obama do anything before 2012 to improve “the economy, particularly jobs and wages?”

Note The Big Lie being repeated as many times as the Republicans can, “Raising taxes on the rich is a job killer.”  I just don’t know why the Democrats don’t spend as much time shooting down The Big Lie as the Republicans spend in spreading it.  Instead we need to spread The Big Truth, “Raising taxes on the rich is a job creator.”

I am doing my part on this blog to try to refute The Big Lie.  Ask yourself what you can do to counter The Big Lie. Why can’t the President and other Democrats do their part?