A Note Regarding the Payroll Tax Holiday Expiration

The 2% increase in payroll taxes that primarily affects the working and middle classes has a remarkable budget effect that has so far been essentially ignored by the media -- including the chest-thumping New Media.

It is this: the cumulative tax revenue gain from the expiration of the payroll tax holiday over the next ten years is in the neighborhood of $1.2 trillion dollars. This is far more than the projected revenue gains from the increases in income tax rates on the Rich (between $400 $150 and $600 $270 billion depending on how successfully they evade the increases.)

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Furthermore, there still is no jobs program, and there are no realistic economic stimulus measures even being contemplated by Our Rulers as they lurch from crisis to crisis, cliff to precipice. Instead, there is a continuation of corporate welfare and military overspending that sucks revenue and provides little or no economic benefit.

This And That

 

Somewhat overextended I am right now.

The van is still in Atwater; the really very nice people at the repair shop say they have repaired "the big noise," but there's still a "little noise" that they can't diagnose -- may be transmission, may be differential, but they aren't sure. They said they drove it to another shop, had them look at it there, got the information that it is either/or, then drove it back to the first shop and it was driving fine. "Just this little noise..." OK, say I.

Problemo.

I wouldn't be surprised if it is both transmission and differential. Which means it may be time to retire the van -- which, by the way, has been a loyal friend on the road for a long time.

Getting back to Atwater without a vehicle of my own is something of a challenge -- not impossible, but a challenge nonetheless (there's a train to Merced and it's about 8 miles from the Amtrak station to Atwater.) But if, as I suspect, I really can't drive the van back to whence it came, just getting down there is kind of useless. So...Pondering options. I'm kind of inclined to go check out a similar van available out in the suburbs but getting there without a vehicle of my own, I'm finding, takes longer than taking the train to Merced would. Isn't that something? Public transportation: Good luck, sucker!

Meanwhile, at the same time, I'm trying to work through refinancing our mortgage in New Mexico... and what fun that is, given that it is all long distance via phone and email. I'm working with a couple of lenders: Wells Fargo, which holds our current mortgage, and another I'll not name at this point, but which we may be going with. Terms proposed are similar, and though with the new lender the process is more complicated, it will take much less time to complete the refinancing with them than with WF. As the broker says about why it takes so long with WF: "It's Wells Fargo." And when I think about the months it took to get the mortgage financing package from them in the first place (We put a deposit on the house in August of 2005; we did not close on the mortgage until January of 2006) it's not all that surprising that a refinance would take almost as long and conceivably longer. Oh, and the WF horror stories I've read. Heartbreaking. They're almost all the same: promises made; promises broken; paperwork lost, over and over and over and over and over and over and over again; last minute document demands from the bank; last minute denial in processes that stretch out for months and months and months. In some cases, it's a matter of sales taking priority over service (it's a bank, you know), and in others, it's clearly a matter of deliberate cruelty, because WF never intends to provide mortgage refinancing or modification at all. They seem to just want to hold the customer tight and take various fees along the way -- for appraisals primarily, which in some cases are never actually done.

From what I can tell from the testimonies (I've seen hundreds by now), people get lured in by WF sales pitches ("Low Rates! Refinance Now! Mortgage Modifications! We have Programs!") and are sold something they actually can't qualify for. Once they are sold, the loan agent forgets about them, never submits the documents -- which is why they get "lost" over and over again -- until the last minute, knowing that the rubes are going to be declined or get screwed. It seems to be such common practice at the Big Banks that the personnel don't even think about it any more. It's just business as usual for them. Completely vile.

On the other hand, I have found only one complaint about the alternate lender we're working with -- and that complaint was through the BBB which does not disclose details. One complaint. We'll research court cases to make sure that this record is accurate. The broker we're working with is a little harried, but she follows up, seems to be very forthcoming and up front, and is essentially a neighbor in NM (next town over.) Costs are a little higher with that lender than what WF is proposing, but you know what? I tend not to believe much of anything WF says these days...

Meanwhile, the rest of the household at Casa Ché is preparing to retire at the end of the month and we are packing up for the Final Move to New Mexico (prep for which I was headed to NM to take care of when the van broke down).

It's quite a basket of challenges and activity for an old coot and sometime radical like me.

I'm busy and sometimes kind of frantic. But the situation has helped me realize (again) how fundamentally lucky I am to have these challenges to work through as best I can. To learn from. Perhaps to help others from what I've learned. You never know.

Often I find myself in a quandary and dilemma between the vanilla middle-classness of much of my lifestyle and the call to rebellion, challenge and adventure that has characterized so much of my life. I'm face to face with that quandary right now, being pulled in several directions at once, and all sorts of things seeming to be popping out of some alternate universe to claim my attention and say "Hay! What about this! And that! And the other thing!"

One of the class of challenges that we'll be facing once the whole Ché household is retired is that we will be without health insurance for a while -- a few months in the case of one of us, a little over a year in the case of myself. We are not going to use the COBRA option, which is close to $3,000 a month to maintain our current coverage, and there is no paid health care plan included in the retirement package. There are options to purchase, but none are less than $1,100 a month. Even with Medicare, the supplements offered through the retirement system are breathtakingly expensive. So when people start bellyaching about all the benefits public sector retirees get, they need to check some facts rather than succumb to the propaganda of the media. Most pensions are based on years of service and contributions by employer and employee; there has never been a free ride for most public employees; they have always been contributing to their pensions. Furthermore, they have voluntarily -- in recent years involuntarily -- taken significant pay cuts and/or foregone scheduled increases, thanks to generous Union Bosses who always seem to see their own nests feathered very nicely indeed. Yes, indeed. (Their argument: "It could be worse, yanno.")

Many public employees never work long enough to reach the point where they qualify for a pension at all, or they work in categories that aren't covered. This has become more commonplace as budgets are cut and most new hires are temps -- some of which remain temps for years and years. And years. They might not even qualify for healthcare coverage or have to pay huge premiums once they do qualify. And this out of salaries that are being constantly reduced. I have been a public employee or contractor from time to time over my working career. My longest stretch as a public employee was 11 years. I decided to take my retirement in a lump sum when I left. I received -- let me look it up, they sent me a 1099-R -- $632.73. From which they withheld $126.55 in taxes. To assert -- as the propagandists constantly do -- that public employees are all somehow privileged over private sector employees is to be deliberately deceptive or obtuse. And the idea that it is somehow "just" to cut anyone's salary or benefits in this economy is akin to economic suicide.

Yes, there are a few people who are doing very well in the public sector, oh my yes. And they will retire with 6 figure incomes, in some cases higher than their base pay was, and they'll get full health care coverage on top of it and probably all kinds of other perks as well. Whether or not they deserve it is beside the point. They negotiated whatever it is they receive in salary and perks and benefits, and whatever it is, it is much less than that of those at the top of the private sector pyramid. In the areas I'm most familiar with, salaries top out at a little over $100,000; most workers think they are doing well if they get $35,000. Many earn much less. Starting salaries are pitiful, not much higher than minimum wage. If they work long enough to get a pension at all, it will amount to no more than 60% or so of their final wage, and in some categories, they won't get Social Security. We're not talking Big Bucks except at the very top of the public sector pyramid, and even those bucks aren't that big when compared to the retirement packages of CEOs.

On the other hand, just the fact that public employees still have any kind of defined benefit retirement packages at all is enough to set off the claxons of the propaganda machine every few minutes. I know this since I am in a capital city, and the local (McClatchy) paper has had a never-ending propaganda campaign against public employees, their unions and especially their pensions. It's relentless and every day. It's been going on for years, through good times and bad; and why not? They broke their own unions and decimated their pension funds years ago. Why not go after the public sector, too? While they like to yammer ad infinitum over the Big Ticket public pension "scandals" what they are really going after -- it's obvious -- is the pittance the lowly long-time employee might get after 30 years. They cannot stand the notion that a lowly state or local government worker who has been drudging all these years -- often berated and thanklessly -- might get 50% or 60% of their salary when they retire.

Since private sector workers get nothing -- even if they put money by in their worthless 401ks or looted IRAs -- why should public employees get anything?

This is completely backwards thinking.

And that kind of thinking has characterized the whole economic policy discussion since well before the crash. It only intensified afterwards.

EVERYONE should receive a decent retirement income; it shouldn't even be a controversial topic. EVERYONE should receive healthcare coverage automatically -- yes, of course they would pay for it through taxes. That shouldn't be controversial, either.

The correct way to address the banking and financial crisis was to provide household debt relief from the first, so that creditors could be paid off from the bottom up. Instead all the relief went directly to the banks; oops, nothing left for the people!

It's all so screwed up thanks to the perverse ideologies of the few that have been sold to the many like cotton candy.

But I ramble and I'm late for an appointment...
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UPDATE: Had a long chat with the Wells Fargo loan agent soon after posting this; she was almost abject about Wells Fargo's horrendous reputation for bad customer service. Of course she said Bank of America is worse! Yes, well, that's not exactly an endorsement is it?

The "problem" she said is in Modifications, not Refinance (I disputed this), and she said that she would NEVER ask us for documents we had already submitted if something went missing during underwriting, because she would have copies of everything, and if there was a need for something we had already submitted, she would produce and provide it from her files.

She said it would not take more than 90 days if we act now (there is another program on the horizon, she said, for FHA loans, and that's going to cause another backlog in the Refinance Department... ) It would probably be much less than 90 days, and she'd try to get it done much quicker by "pushing" the Underwriters and Processors. I asked her where they were. She said she thinks they're in Arizona but she's not sure.

In addition, she pointed out that having Wells Fargo do the refinancing is much simpler than doing it through another lender because they already have the mortgage file and don't have to create a new one. She almost claimed that another lender couldn't do it at all. I said, "Yes, it is so simple, it literally takes only a few minutes to complete the required forms." She disputed that, saying that they have to get an appraisal (actually, it may not be necessary, but they want one anyway) and they have to do the usual due diligence to confirm sources of income and such, so it takes longer than "a few minutes" to complete the underwriting. But yes, she agreed, it is "simple" for the originating bank. The only reason it takes so long to close a refinance is that there are so many of them to be done. Another lender essentially has to start from the ground up, and may wind up unable to do the refinance in the end.

She was she said determined to demonstrate to us that Wells Fargo's refinancing customer service was among the best in the business, and promised to stay on top of our loan through the entire process. I pointed out that we got the same promises when we originally financed through Wells Fargo and it took 5 months to close and the interest rate was 2% higher than we had been told it would be. When we questioned the loan officer about it, she claimed it was the going rate for that kind of loan (purchase and renovation), regardless of what we had been told when we first applied for the mortgage. So I wasn't really going to take anything that Wells Fargo had to say at face value.

LATER: I got a call from the other lender's broker. And we talked for a long time. During the day, we'd been emailing about retirement and other issues, and finally she sent an email saying that she couldn't "start" the process until after the last day of the month because of the retirement income issue. Whoa. This actually would amount to a one month delay in "starting" the process. I was stunned and said so.

She said even if she "started" now -- by submitting full documentation to the extent we have it -- everything would stop as soon as the underwriters made contact with the employer because there would be confirmation not of employment for the next six months but of retirement at the end of the June. In order to get past that roadblock, we would need to submit an Award Letter, which we can't get until at least the end of June, so there really wasn't any point in submitting the other documents now since underwriting can't proceed without confirmation of retirement income and it will still take the same length of time to get the loan underwritten once the Award Letter is submitted as it would if we started now. She says once we have all required documentation in place (the only thing missing is the Award Letter so far as we know) then the process will take just about 24 days to closing. She said that if something required for underwriting is missing, the process stops, and the application has to go through Underwriting again.

Rather than take that risk, she said it would be better to gather all the required docs and submit them all at once.

During the day, I'd been researching the HARP refinance guidelines and Freddie Mac "Seller's Guide," and sure enough, it is more difficult for another lender to do the refinancing because they have to create a whole new mortgage file and have to follow much stricter underwriting rules to get it approved for purchase -- in this case by Freddie Mac. With Wells Fargo, they and we have already met most of the underwriting requirements and don't have to go through the whole process again (for example, we're assumed to be creditworthy, and as the house already has an appraisal from the first mortgage it isn't absolutely necessary to get one again -- though Wells Fargo wants one anyway.)  But in the case of either Wells Fargo or a new lender, they must verify source of income. In other words, the process cannot go forward for either lender without an Award Letter. So that's going to be the sticking point no matter what.

 Also, we did some more extensive court searches for complaints against our alternative lender, and there were literally none. Zero. Nada. This contrasts with HUNDREDS of complaints against Wells Fargo. They're practically every day.

It's all fascinating...

Discrediting Democracy -- or Russia Redux (aka "Storming the White House")

Yeltsin's troops on the lawn of the Russian White House -- the Congress of People's Deputies building -- in Moscow after successfully bombarding it and the People's Deputies inside. October, 1993

In Russia they still officially refer to the attack on their White House -- the Congress of People's Deputies building in Moscow in 1993 -- as a "defense of democracy." Of course, this is Orwellian double think on many levels.

In fact, it was yet another in a string of coups that had taken place in Russia after the dissolution of the Soviet Union. In this one, Boris Yeltsin, Inebriate Mayor of Moscow, decreed and crushed defiance. Let Misha's Russia Blog tell the tale:

Keep in mind that the last time Russia embraced "liberal free-market reforms" it was done at the point of a gun, albeit a Russian gun, during Yeltsin's so-called capitalist "shock therapy." Recall that the Russian Federation had a written constitution and an effective and democratically elected parliament after the dissolution of the USSR. Prior to October 1993 that freely elected Russian parliament actually constituted an effective check on the power of the Russian president.

In the summer of 1993 the Russian parliamentary deputies adamantly refused to pass Yeltsin's capitalist "shock therapy" program, then being urged on Yeltsin by the U.S. and other capitalist powers. Instead the parliament even began proceedings to impeach Yeltsin. After several weeks of deadlock between Yeltsin and the parliament, with growing street protests, Yeltsin issued a "decree" dissolving the Russian parliament on September 21, 1993. Yeltsin's decree was in direct contradiction with the articles of the Russian constitution.(1) The mounting crises lead to widespread anti-Yeltsin protests and violence on the streets of Russian cities.

Yeltsin then ordered parliamentarians to vacate the White House (the Russian Parliament building). When they refused Yeltsin promptly ordered the Russian army to besiege and storm the parliament. Hundreds of Russians came to the scene to form a human shield around the parliament building. On October 4, 1993, tank rounds were fired at point blank range into the Parliament building and then it was stormed by armed troops. Hundreds died in the violence that ensued. The government officially declared that 187 people had been killed and 437 wounded. However eye witnesses put the real number much higher.(2) There was not a word of protest over these manifestly undemocratic and violent actions from the U.S. Clinton Administration, because Yeltsin was doing what the U.S. wanted him to do.(3)

Having destroyed the opposition (literally) Yeltsin then proceeded to re-write the Russian constitution more to his liking, giving the president the power to virtually rule Russia by decree, and the power to finally ram his Western-authored "shock therapy" down the throats of an unwilling Russian population.

Yeltsin's shock therapy program subsequently saw Russia's GDP rapidly decline by some 50% from the level that had been achieved during the final years of the Soviet Union(4), as inflation spiraled out of control. Over the next decade Russia suffered a massive decline in living standards as well as the virtual collapse of Russian society and culture. Virtually every statistical indicator of social well being showed the depth of the destruction of Russian society, from the collapse of health care and the rise of long-banished diseases to the collapse of education and spiraling crime, alcoholism and drug abuse. During this period major international criminal gangs became entrenched in Russia including those specializing in the trafficking and sexual exploitation of women and children.

Now this unprecedented social and humanitarian catastrophe took place even as a handful of corrupt "oligarchs" became fabulously wealthy and powerful by leveraging their newfound control over state assets that only yesterday belonged to the people.(5) Almost all the hundreds of billions pocketed by the oligarchs, especially from the sale of Russia's rich natural resources, was spirited out of Russia and into secret offshore bank accounts, tax free.

Yes. Well.

This "shock therapy" worked so well on the Former Soviet Union, plutocrats and oligarchs everywhere took notice. How could they not?

If they want to have their way, they realized, it was up to them to discredit and demonize democracy in every conceivable way, and if the die-hards wouldn't yield, then use force.

Sure enough. It works. Hahahahahahah!

Tom Ferguson over at Real News Network makes the point that the current paralysis of our own 'representative democracy' is yet another way to discredit democracy here in the United States.



"In American Politics, every day is Turkey Day."

The point being made is that the institution of Congress doesn't "work." Well, we know that. We should have recognized that simple fact a long time ago, but it's only recently that very many Americans have woken up from their Take and Bake dream. We're going to hell in a handbasket, and Congress has been greasing the skid. Happily.

We're seeing the results of discrediting democracy in Europe right now. The alarmists are certainly out in force, but there is a point to their alarm.

Here's a take on the Next Big Thing(?) from a writer at CNN:

Europe's next nightmare: Right-wing extremism

Of course.

And then there is Spain

And Portugal

Greece

Italy

Don't forget Ireland

Britain

Basically, the plutocrats and oligarchs have been going all around the world undermining and extinguishing democracies one by one and in batches whenever they get the chance and the auguries say proceed.

They cut their teeth on the Soviet Union.

Our turn is not far away. Actually, the preliminary festivities have been under way for many years, at least since the Impeachment Circus of 1998.

The plutocrats and oligarchs will not be denied. This is why there is a global revolution; it's a necessity.

Do you feel poor yet?

US Incomes Declined More During 'Recovery' Than During Recession

Per Huffington Post. Which ordinarily I don't bother with, Ariana being one of the 1% -- and proud of it.

The U.S. economy may technically be in a recovery, but it likely doesn’t feel that way for many Americans when grabbing for their wallets.

Median annual household income has fallen more during the recovery than it did during the recession, according to a new study from former Census Bureau officials Gordon Green and John Code. Between December 2007 and June 2009, when the U.S. economy was in recession, incomes declined 3.2 percent. While during the recovery between June 2009 and June 2011 incomes fell 6.7 percent, the study found.

The lack of income growth may explain why for most Americans the recovery still feels like a recession. Eight in 10 Americans believe the recession is an ongoing problem, according to a recent Gallup poll. And workers don't anticipate things will pick up any time soon. Nine out of 10 Americans said they don't expect to get a raise that will be enough to compensate for the rising costs of essentials like food and fuel, according an American Pulse survey released in June.

This is a message I've been trying to communicate as best I can for years, but for some reason it has been met with either complete indifference or statistical bullshit that attempts to show that since average incomes have been either flat or rising slightly during the Endless Recession, it's simply "not true" that average Americans are losing ground.

This is the first study I'm aware of that begins to show just how stark the income declines for the masses have been. Averages are meaningless because the highest incomes are factored in with the lowest, and those with no cash income (a growing segment of the population, btw) are not factored at all. This study says Americans' incomes have declined 10% during the Recession and the so-called Recovery, whereas my own unscientific survey in a relatively well-off neighborhood shows a decline of closer to 25%, and if one goes over the line into the 'hood, as it were, income decline is closer to 50% or more.

Because costs of living have not declined at all (well, except for the price of houses if you can scrape up the cash) the decline in income is devastating for more and more people every day. That is one reason why so many Americans are now taking to the streets and why so many Americans are camping out in the public square to be heard.

Of course the 99% Tumblr provides stark and very graphic testimony of what the economic catastrophe has been doing to the masses.

It is just incredible that this sort of evidence is still subject to dispute and debate. You wonder at the willful blindness to increasing poverty, hunger and devastation all around us, and you don't wonder at it at all. The blindness is a coping strategy. For many, it is a necessary coping strategy to avoid the horrible recognition that there but for the grace of God...

This is by no means even remotely a poor nation. But the wealth is concentrated more and more into fewer and fewer hands. Make no mistake at all, not only are they robbing the rest of us of life, liberty, and the pursuit of happiness (among other things), they're delightedly stealing from one another at an ever frenzied pace, as if there were some mountain somewhere just waiting for one of them to be King.

It's insane.

If we're lucky, the global protests and demonstrations and occupations will not just serve as notice to the highest of the mighty that their rule is near its end, they will lead to a genuine revolutionary movement that will replace that rule with what I call the Four Values:

Dignity. Justice. Community. Peace.

Lower incomes don't have to be a bad thing, but they are devastating in the kind of Social Darwinist nightmare our betters have decided the US and the world shall become.

We've had enough.

We're not going to take it any more.