Jan 29

January 30, 2009 § Leave a comment

http://econlog.econlib.org/archives/2009/01/from_dark_age_t.html

 
 

I’m feeling somewhat lonely these days. My understanding of macroeconomics is closer to that of Paul KrugmanMark Thoma, and Brad DeLong than it is to that of Robert Barro, John Cochrane, or Eugene Fama. And yet I am a stimulus skeptic. I’ll reiterate why I am a skeptic. But what I really want to get into is my view of the intellectual history of macro since the 1970’s. I think that Krugman’s phrase Dark Age of Macroeconomics aptly describes the whole period.

First, about the stimulus. My objections are:

1. We have a heterogeneous labor force, and that will require Hayekian market adjustment, not central planning. Look at this data from page 96 of the Goldin-Katz book, which shows the percentage of the labor force with various levels of education:

 
 

Pasted from <http://econlog.econlib.org/archives/2009/01/from_dark_age_t.html>

 
 

 
 

http://econlog.econlib.org/

 
 

Oligarchs turn to (almost) free press

By John Helmer 

 
 

MOSCOW – What kind of coincidence can it be for two middle-aged Russians with notable business acumen, Sergei Pugachev and Alexander Lebedev, to be buying at the same time two loss-making evening newspapers, one in Paris and one in London, each for each man’s young so

 
 

Pasted from <http://www.atimes.com/atimes/Central_Asia/KA30Ag01.html>

 
 

THE ROVING EYE 

Obama’s arc of instability 

Announcing his new State Department, United States President Barack Obama stressed “America’s commitment to lead”. But lead where? Where’s the boldness, the real change of mindset? The Pentagon’s “arc of instability” hovers over Obama’s “Clinton-3” State Department like a ghostly self-fulfilling prophecy. Unless, of course, the Obama White House really kicks out ideology and steers the 

 
 

Pasted from <http://www.atimes.com/atimes/Front_Page.html>

 
 

Is ethical capitalism possible? 

Long-term investments in clean energy and social welfare are being hindered by falling oil prices, lack of funding and anxiety about profit. Yet the reach of the Internet and US President Barack Obama’s inaugural support for “core” principles should strengthen the prospect of business finding a new, smarte

 
 

Pasted from <http://www.atimes.com/atimes/Front_Page.html>

 
 

Taliban and other militants in their struggle not only in Afghanistan and Pakistan but also in their bid to establish a base from which to wage an “end-of-time battle” that would stretch all the way to the Arab heartlands of Damascus and Palestin

 
 

Pasted from <http://www.atimes.com/atimes/South_Asia/KA29Df01.html>

 
 

anuary 29, 2009, 7:03 AM

California’s Wind Slowdown

By KATE GALBRAITH


 
 

Pasted from <http://greeninc.blogs.nytimes.com/2009/01/29/californias-wind-slowdown/?hp>

 
 

1. The Story So Far: Greed + Incompetence + A Belief in Market Efficiency = Disaster

“Greed and reckless overconfidence on the part of almost everyone caused us to ignore risk to a degree that is probably unparalleled in breadth and depth in American history. Even more remarkable was the lack of insight and basic competence of our leadership, which led them to ignore this development, or worse, to encourage it. Ingenious new financial instruments certainly facilitated and exaggerated these weaknesses, but they were not the most potent ingredient in our toxic stew. That honor goes to the economic establishment for building over many decades a belief in rational expectations: reasonable, economically-induced behavior that would always guarantee approximately efficient markets. In their desire for mathematical order and elegant models, the economic establishment played down the inconveniently large role of bad behavior, career risk management, and flat-out bursts of irrationality

 
 

Pasted from <http://www.ritholtz.com/blog/2009/01/greed-incompetence-a-belief-in-market-ef%ef%ac%81ciency-disaster/>

 
 

SAN FRANCISCO (AP) — With the recession forcing tech companies to announce thousands of layoffs, IBM Corp. is joining the fray — but not advertising it.

The Armonk, N.Y.-based company has cut thousands of jobs over the past week, including positions in sales and the software and hardware divisions. IBM says the cuts are simply part of its ongoing efforts to watch costs, and the company won’t release specific numbers, even as reports of firings stream in from IBM facilities across the country.

Workers have reported layoffs in Tucson, Ariz.; San Jose, Calif.; Rochester, Minn.; Research Triangle Park, N.C.; East Fishkill, N.Y.; Austin, Texas; and Burlington, Vt.

Meanwhile, other tech companies such as Intel Corp., Microsoft Corp., Texas Instruments Inc., Sprint Nextel Corp. and Google Inc. have all publicly revealed job cuts as part of their strategies for riding out the economic crisis. More than 20,000 jobs will be lost from those companies alone.

One of IBM’s biggest rivals — Hewlett-Packard Co. — is also laying people off. HP is shedding 24,600 jobs, nearly 8 percent of its 320,000-employee work force, as it digests the acquisition of Electronic Data Systems Corp.

 
 

Pasted from <http://www.google.com/hostednews/ap/article/ALeqM5hTRob6LXiiLWNPqpGUhdfLWN7WdgD95VP2Q81>

 
 

IMF expects global economy to come to “virtual halt” in 2009

By Patrick O’Connor 

29 January 2009

The International Monetary Fund (IMF) said yesterday that it expects world economic growth this year to be the lowest since World War II. The Fund’s latest update to its 2009 World Economic Outlook forecasts global gross domestic product (GDP) growth of just 0.5 percent—sharply lower than the 2.2 percent annual growth it expected last November.

IMF chief economist Olivier Blanchard declared: “We now expect the global economy to come to a virtual halt.”

The global slump is being led by the advanced economies, almost all of which will experience major economic contractions. The US economy is expected to decline by 1.6 percent, the eurozone by 2 percent, Japan by 2.6 percent and Britain by 2.8 percent. On average, output in the advanced economies will fall by 2 percent—the first such collective contraction since the 1930s.

Credit: IMF World Economic Outlook Update Jan 2009

 
 

Mr. Blair said that was wrong. “The free enterprise system has not failed,” he said. “The financial system has failed.”

 
 

Pasted from <http://norris.blogs.nytimes.com/>

 
 

http://blogs.nyu.edu/fas/dri/aidwatch/

notes jan 27

January 27, 2009 § Leave a comment

    Raw notes

     

    The pre-crisis phase: Global excess demand for safe assets

    For quite some time, but in particular since the late 1990s, the world has experienced a chronic shortage of financial assets to store value. The reasons behind this shortage are varied. They include the rise in savings needs by aging populations in Japan and Europe, the fast growth and global integration of high-saving economies, the precautionary response of emerging markets to earlier financial crises, and the intertemporal smoothing of commodity producing economies

     

    And, on world history

    world history

     

    And, on climate impossibilities

    If Brand/Griffth’s vision is correct, we would be better off focusing our efforts on ameliorating the effects of global climate change rather than some half-assed attempt to forestall it. There is simply no political will, at least in the United States, for the sorts of changes that would actually be required to achieve the sort of dramatic changes that are really required.

     

    on griffith

     

    On long now seminars

     

    Related links:

    Schedule of future SALT talks

    Free download of past talks

    Email notification of future talks (and my summaries of the talks)

    Podcast of talks

    Rosetta DVD now available

    Long Now blog

    Contact Long Now

     

    And, on world history

     

    The scholars of the Annales school of French history characteristically placed their analysis of historical change within the context of the large structures — economic, social, or demographic — within which ordinary people live out their lives. They postulate that the broad and enduring social relations that exist in a society — for example, property relations, administrative and political relations, or the legal system — constitute a stable structure within which agents act, and they determine the distribution of crucial social resources that become the raw materials on the basis of which agents exercise power over other individuals and groups. So the particular details of a social structure create the conditions that set the stage for historical change in the society. (The recently translated book by André Burguière provides an excellent discussion of the Annales school;The Annales School: An Intellectual History.)

     

  1. And world’s best 1000 novels
  2.  

    And on fuels

    Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels

     

  1. Jason Hill*,,,§,
  2. Erik Nelson,
  3. David Tilman*,§,
  4. Stephen Polasky*,, and
  5. Douglas Tiffany

+Author Affiliations

  1. Departments of *Ecology, Evolution, and Behavior and
  2. Applied Economics, University of Minnesota, St. Paul, MN 55108; and
  3. Department of Biology, St. Olaf College, Northfield, MN 55057

  4. Contributed by David Tilman, June 2, 2006

Abstract

Negative environmental consequences of fossil fuels and concerns about petroleum supplies have spurred the search for renewable transportation biofuels. To be a viable alternative, a biofuel should provide a net energy gain, have environmental benefits, be economically competitive, and be producible in large quantities without reducing food supplies. We use these criteria to evaluate, through life-cycle accounting, ethanol from corn grain and biodiesel from soybeans. Ethanol yields 25% more energy than the energy invested in its production, whereas biodiesel yields 93% more. Compared with ethanol, biodiesel releases just 1.0%, 8.3%, and 13% of the agricultural nitrogen, phosphorus, and pesticide pollutants, respectively, per net energy gain. Relative to the fossil fuels they displace, greenhouse gas emissions are reduced 12% by the production and combustion of ethanol and 41% by biodiesel. Biodiesel also releases less air pollutants per net energy gain than ethanol. These advantages of biodiesel over ethanol come from lower agricultural inputs and more efficient conversion of feedstocks to fuel. Neither biofuel can replace much petroleum without impacting food supplies. Even dedicating all U.S. corn and soybean production to biofuels would meet only 12% of gasoline demand and 6% of diesel demand. Until recent increases in petroleum prices, high production costs made biofuels unprofitable without subsidies. Biodiesel provides sufficient environmental advantages to merit subsidy. Transportation biofuels such as synfuel hydrocarbons or cellulosic ethanol, if produced from low-input biomass grown on agriculturally marginal land or from waste biomass, could provide much greater supplies and environmental benefits than food-based biofuels.

 

And, very difficult, goes with Griffith..

 

Report: Some climate damage already irreversible

By RANDOLPH E. SCHMID – 17 hours ago

WASHINGTON (AP) — Many damaging effects of climate change are already basically irreversible, researchers declared Monday, warning that even if carbon emissions can somehow
be halted temperatures around the globe will remain high until at least the year 3000.

“People have imagined that if we stopped emitting carbon dioxide the climate would go back to normal in 100 years, 200 years; that’s not true,” climate researcher Susan Solomon said in a teleconference.

Solomon, of the National Oceanic and Atmospheric Administration’s Earth System Research Laboratory in Boulder, Colo., is lead author of an international team’s paper reporting irreversible damage from climate change, being published in Tuesday’s edition of Proceedings of the National Academy of Sciences.

She defines “irreversible” as change that would remain for 1,000 years even if humans stopped adding carbon to the atmosphere immediately.

The findings were announced as President Barack Obama ordered reviews that could lead to greater fuel efficiency and cleaner air, saying the Earth’s future depends on cutting air pollution.

Said Solomon, “Climate change is slow, but it is unstoppable” — all the more reason to act quickly, so the long-term situation doesn’t get even worse.

Alan Robock, of the Center for Environmental Prediction at Rutgers University, agreed with the report’s assessment.

“It’s not like air pollution where if we turn off a smokestack, in a few days the air is clear,” said Robock, who was not part of Solomon’s research team. “It means we have to try even harder to reduce emissions,” he said in a telephone interview.

Solomon’s report “is quite important, not alarmist, and very important for the current debates on climate policy,” added Jonathan Overpeck, a climate researcher at the University of Arizona.

In her paper Solomon, a leader of the International Panel on Climate Change and one of the world’s best known researchers on the subject, noted that temperatures around the globe have risen and changes in rainfall patterns have been observed in areas around the Mediterranean, southern Africa and southwestern North America.

Warmer climate also is causing expansion of the ocean, and that is expected to increase with the melting of ice on Greenland and Antarctica, the researchers said.

“I don’t think that the very long time scale of the persistence of these effects has been understood,” Solomon said.

Global warming has been slowed by the ocean, Solomon said, because water absorbs a lot of energy to warm up. But that good effect will not only wane over time, the ocean will help keep the planet warmer by giving off its accumulated heat to the air.

Climate change has been driven by gases in the atmosphere that trap heat from solar radiation and raise the planet’s temperature — the “greenhouse effect.” Carbon dioxide has been the most important of those gases because it remains in the air for hundreds of years. While other gases are responsible for nearly half of the warming, they degrade more rapidly, Solomon said.

Before the industrial revolution the air contained about 280 parts per million of carbon dioxide. That has risen to 385 ppm today, and politicians and scientists have debated at what level it could be stabilized.

Solomon’s paper concludes that if CO2 is allowed to peak at 450-600 parts per million, the results would include persistent decreases in dry-season rainfall that are comparable to the 1930s North American Dust Bowl in zones including southern Europe, northern Africa, southwestern North America, southern Africa and western Australia.

Gerald Meehl, a senior scientist at the National Center for Atmospheric Research, said, “The real concern is that the longer we wait to do something, the higher the level of irreversible climate change to which we’ll have to adapt.” Meehl was not part of Solomon’s research team.

While scientists have been aware of the long-term aspects of climate change, the new report highlights and provides more specifics on them, said Kevin Trenberth, head of climate analysis at the center.

“This aspect is one that is poorly appreciated by policymakers and the general public and it is real,” said Trenberth, who was not part of the research group.

“The temperature changes and the sea level changes are, if anything underestimated and quite conservative, especially for sea level,” he said.

While he agreed that the rainfall changes mentioned in the paper are under way, Trenberth disagreed with some details of that part of the report.

“Even so, there would be changes in snow (to rain), snow pack and water resources, and irreversible consequences even if not quite the way the authors describe,” he said. “The policy relevance is clear: We need to act sooner … because by the time the public and policymakers really realize the changes are here it is far too late to do anything about it. In fact, as the authors point out, it is already too late for some effects.”

Co-authors of the paper were Gian-Kaspar Plattner and Reto Knutti of the Swiss Federal Institute of Technology in Zurich and Pierre Friedlingstein of the National Institute for Scientific Research, Gif sur Yvette, France.

The research was supported by the Office of Science at the Department of Energy.

 

 

Reflections on Garden World Politics Douglass Carmichael

January 27, 2009 § Leave a comment

draft of “how we got here”

First, that the Obama team is likely to try and re-stabilize the banks so they look  much like they looked two years ago. “Save the financial sector”.  I think this will fail. There is too much debt in the system, assets are not clearly tied to debt, and nobody knows how tor price most assets. I sense that we are likely to get two rounds of the use of federal money to try that bank stabilization as return to past practice, and as they fail, treasuries will themselves become seen as less secure. (another euphemism).

 

How did we get here? First notice that the tendency is to blame someone. This gets in the way of understanding the system with a certain inevitability. Only if we see this can we effectively change it.

 

My view of what happened.

 

Background: rising population (we are a successful species), leads to wars, and energy dependence which leads to oil, which fuels growth and wars. WW1 and WW2 are part of a long struggle for social control that can handle money, status, land, technology and governance.

 

  1. The immediate background is ww2 (which of course also has a history)
  2. The promise of leisure as technology replaced work.
  3. He movement by owners of capital land and stocks, and upper level managers to make sure that profit in the system flowed toward them and not toward workers., culminating in Reagan firing all the air traffic controllers. The ideology was corporations exist to satisfy owners.
  4. The rich got richer
  5. They used he money to buy Stocks, real estate, large trophy houses and second homes
  6. Moved from CD’s to more speculative financial instruments, the repeal of Glas-Steagle by Clinton led to more financial freedom.
  7. The financial institutions obliged by creating new products for those with discretionary money. This was pure market.
  8. Greenson kept money flowing into the market, lowering interest rates.
  9. The middle class on down had to pay more for housing that was being bought by people with more money.
  10. The middle class was stretched and increased debt led to nervousness
  11. Which led to selling fewer financial  instruments.
  12. At the same time outsourcing was eliminating higher paid jobs.
  13. Thus the financial institutions started loosing fees.
  14. And we snowballed down, exacerbated by the banks and brokerage houses that wanted the public to keep up their funds flow and fees and profits.
  15. Obviously there are other factors, such as oil, China, foreign debt, Americans taking money out of the country. But these can be woven in to the fabric above.

 

I also sense that, since the old economy cannot be recreated, we need to think really differently about what we want to build instead. The pressure will be on for large organizations to dominate the “instead’ strategy. But local needs mean that local efforts will be creative and we may see the emergence of lots of small scale more local enterprises.

 

In the last few years I have worked on a book, GardenWorld Politcs (at http://dougcarmichael.com/GWP.html) which was aimed at providing an image of where I think most people would like to go.

 

I also have been involved inc reateing the Stanford Strategy Center and the off campus Palo Alto Strategy Center as places to have more systemic, historically and humanly grounded straegy conversations. In those ocnversation, we have become clearer that the alternative economy can be framed in terms of the loss of the idea of leisure that was prominent in the post WW2 period. The elite looked on the leisure problem and thought, we need to keep people working and harvest that potential leisure for ourselves. This was country club language for the neo-liberal assault on the economy that led to deregulation, derivatives and further adventures in the engineering of financial instruments., and the following concentration of wealth. A good book is David Harvey’s A brief History of Neocolonialism.

 

All this has come together for me as a sense of a new major and deep crisis that is not well understood. It is a n opportunity to rethink what wealth is for, who should have it, how is it made, and how is it paid for. The rehumanization of wealth, from money and machines to humans and quality of lived life, is a real possibility, and GardenWorld Politics provides a good frame for seeing that goal and discussing the unfolding of events. 

The Associated Press: Report: Some climate damage already irreversible

January 27, 2009 § Leave a comment

Report: Some climate damage already irreversible

WASHINGTON (AP) — Many damaging effects of climate change are already basically irreversible, researchers declared Monday, warning that even if carbon emissions can somehow be halted temperatures around the globe will remain high until at least the year 3000.

“People have imagined that if we stopped emitting carbon dioxide the climate would go back to normal in 100 years, 200 years; that’s not true,” climate researcher Susan Solomon said in a teleconference.

Solomon, of the National Oceanic and Atmospheric Administration’s Earth System Research Laboratory in Boulder, Colo., is lead author of an international team’s paper reporting irreversible damage from climate change, being published in Tuesday’s edition of Proceedings of the National Academy of Sciences.

She defines “irreversible” as change that would remain for 1,000 years even if humans stopped adding carbon to the atmosphere immediately.

The findings were announced as President Barack Obama ordered reviews that could lead to greater fuel efficiency and cleaner air, saying the Earth’s future depends on cutting air pollution.

Said Solomon, “Climate change is slow, but it is unstoppable” — all the more reason to act quickly, so the long-term situation doesn’t get even worse.

Alan Robock, of the Center for Environmental Prediction at Rutgers University, agreed with the report’s assessment.

“It’s not like air pollution where if we turn off a smokestack, in a few days the air is clear,” said Robock, who was not part of Solomon’s research team. “It means we have to try even harder to reduce emissions,” he said in a telephone interview.

Solomon’s report “is quite important, not alarmist, and very important for the current debates on climate policy,” added Jonathan Overpeck, a climate researcher at the University of Arizona.

In her paper Solomon, a leader of the International Panel on Climate Change and one of the world’s best known researchers on the subject, noted that temperatures around the globe have risen and changes in rainfall patterns have been observed in areas around the Mediterranean, southern Africa and southwestern North America.

Warmer climate also is causing expansion of the ocean, and that is expected to increase with the melting of ice on Greenland and Antarctica, the researchers said.

“I don’t think that the very long time scale of the persistence of these effects has been understood,” Solomon said.

Global warming has been slowed by the ocean, Solomon said, because water absorbs a lot of energy to warm up. But that good effect will not only wane over time, the ocean will help keep the planet warmer by giving off its accumulated heat to the air.

Climate change has been driven by gases in the atmosphere that trap heat from solar radiation and raise the planet’s temperature — the “greenhouse effect.” Carbon dioxide has been the most important of those gases because it remains in the air for hundreds of years. While other gases are responsible for nearly half of the warming, they degrade more rapidly, Solomon said.

Before the industrial revolution the air contained about 280 parts per million of carbon dioxide. That has risen to 385 ppm today, and politicians and scientists have debated at what level it could be stabilized.

Solomon’s paper concludes that if CO2 is allowed to peak at 450-600 parts per million, the results would include persistent decreases in dry-season rainfall that are comparable to the 1930s North American Dust Bowl in zones including southern Europe, northern Africa, southwestern North America, southern Africa and western Australia.

Gerald Meehl, a senior scientist at the National Center for Atmospheric Research, said, “The real concern is that the longer we wait to do something, the higher the level of irreversible climate change to which we’ll have to adapt.” Meehl was not part of Solomon’s research team.

While scientists have been aware of the long-term aspects of climate change, the new report highlights and provides more specifics on them, said Kevin Trenberth, head of climate analysis at the center.

“This aspect is one that is poorly appreciated by policymakers and the general public and it is real,” said Trenberth, who was not part of the research group.

“The temperature changes and the sea level changes are, if anything underestimated and quite conservative, especially for sea level,” he said.

While he agreed that the rainfall changes mentioned in the paper are under way, Trenberth disagreed with some details of that part of the report.

“Even so, there would be changes in snow (to rain), snow pack and water resources, and irreversible consequences even if not quite the way the authors describe,” he said. “The policy relevance is clear: We need to act sooner … because by the time the public and policymakers really realize the changes are here it is far too late to do anything about it. In fact, as the authors point out, it is already too late for some effects.”

Co-authors of the paper were Gian-Kaspar Plattner and Reto Knutti of the Swiss Federal Institute of Technology in Zurich and Pierre Friedlingstein of the National Institute for Scientific Research, Gif sur Yvette, France.

The research was supported by the Office of Science at the Department of Energy.

GOP Leaders, Including McCain, Reject Stimulus Plan

January 26, 2009 § Leave a comment

Huffington reviews the resistance.

Leading Republicans Sunday indicated that they would oppose passage of the stimulus package as it is currently written. While there is bi-partisan acknowledgment that some sort of stimulus package needs to be passed to provide a jolt to the economy, Democrats are attaching a sense of urgency to the situation that Republicans do not seem to share. The economic picture shows no signs of improving, as investors brace for the biggest plunge in GDP in 26 years.

Originally, Democrats wanted to have a stimulus plan ready for Obama to sign on his first day in office. That was, perhaps, an unrealistic goal, but it is now unlikely that any kind of plan will be passed before mid to late February.

Commenting this morning on the Sunday talk shows, high-ranking GOP members gave the current stimulus package low marks andthreatened to vote against it unless significant changes are made:

“Right now, given the concerns that we have over the size of this package and all of the spending in this package, we don’t think it’s going to work,” the House Minority Leader John A. Boehner, Republican of Ohio, said on NBC’s “Meet the Press.” “And so if it’s the plan that I see today, put me down in the no column.”
Boehner warned that many rank and file Republicans had the same sentiments.

 

John McCain also voiced his opposition to the stimulus:

Senator McCain, who lost the presidential election to Mr. Obama in November, said that he planned to vote no unless the bill were changed.
“We need to make tax cuts permanent, and we need to make a commitment that there’ll be no new taxes,” Mr. McCain said. “We need to cut payroll taxes. We need to cut business taxes.”

 

Republicans want much more of the stimulus package to consist of tax cuts instead of spending, and Democrats have acceded to much of this demand. Indeed, Democratic Congressional leaders defended including more tax cuts in the package despite calling them ineffective. Huffingon Post’s Sam Stein reports:

Two of the highest-profile Democrats in Congress argued on Sunday that when it comes to the economic stimulus package, spending projects will do more to jump-start the economy than tax cuts.
And then… they defended the tax cuts.

Appearing on the Sunday talk show circuit, Sen. Chuck Schumer and Speaker Nancy Pelosi touted the merits of the recovery package now making its way through Congress. But there was a peculiar logic to their defense: tax cuts would not be as effective in encouraging job growth, but they would make up a major portion of the legislation anyways.

 

It wasn’t just GOP politicians who took to the airwaves to criticize the stimulus plan. Leading Republican intellectuals offered their own, much more pointed, critiques. Think Progress has compiled a video of Bill Kristol and Charles Krauthammer bashing the stimulus. David Brooks also weighed in with a column on January 23rd, calling it an “unholy marriage that manages to combine the worst of each approach.” Apparently Obama’s conservative dinner party was not as effective as he would have hoped. Watch the video below.

 

fromhttp://www.huffingtonpost.com/2009/01/25/gop-leaders-including-mcc_n_160714.html

GAO Report on Corporate Tax Liabilities

January 26, 2009 § Leave a comment

the report listed below is at

 GAO report [PDF]

P. Sainath: The Freefalling Economy

January 26, 2009 § Leave a comment

This has some inteersting numbers, such as percent corporate profits of whole US economy.I find that counter intuitive. I need to follow up.

No society in the world has been so fully under corporate sway as the United States. (This is the model our own elite so admire and lust for.) And corporate privileges have grown under every American administration. According to the Government Accountability Office, two-thirds of corporations in America paid no federal income taxes at all between 1998 and 2005. This includes a fourth of all large US companies. (That is, those with at least $ 250 million in assets or $50 million in receipts). And this, despite all these corporations collectively reporting trillions of dollars in sales.

Indeed, corporate profits were on record highs. By 2006, they made up a historic 14.1 per cent of the nation’s total income. Yet, as the New York Times says: “the percentage of these profits paid out in taxes is near its lowest since the 1930s.” (An earlier GAO report showed that 61 per cent of US corporations paid no federal income taxes between 1996 and 2000 – also a period of high growth and huge corporate profits.) 

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