FOX NEWS SINKS TO NEW LOW IN 2012?

Mark Howard at Alternet.org put together a list of the "unbelievably awful" journalistic misrepresentations and falsehoods that Fox News put together in 2012.

At the top of the list is Fox News' efforts to lure General Petraeus into the Republican presidential line up to "shake things up" a bit. As Alternet.org points out, what Fox News did is an intrusion into the political process that debases journalism "by breaching all standards of ethical conduct." Worse, "it debases democracy" by "exploiting its power and wealth to manipulate political outcomes."

While you can go to the link, which has full commentary, below I've listed the 12 "unbelievably awful" things Fox News did to lower the bar on journalism.

1. Recruiting General Petraeus for the GOP presidential field.

2. Fox produces its own anti-Obama video, which it posted on line and later tried to distance itself from.

3. Fox News' Liz Trotta belittles military women who are raped for being "whiners" because they should know what they're getting into working with men in battle.

4. Fox News's two-faced approach towards Latinos (the focus is on illegality).

5. Fox lies about military access to voting in Ohio.

6. Racial photoshopping to fit the narrative (the Treyvon Martin case). 

7. The skewed polls nonsense.

8. Keith Ablow's psycho babble about pretty much everything, but especially Newt Gingrich's manly marital attraction level.

9. An hour long anti-Obama commercial airs on Hannity.

10. Fox News "Democratic" contributor accuses President Obama of sympathizing with the terrorists.

11. Spinning the unemployment rate, always.

12. Fox opposes ban on assault weapons, but imposes ban on talking about it.

I'm sure you probably have your own examples and comments regarding Fox News' lack of journalistic integrity and ethical transgressions (I know I do).  And you should.

Still, Alternet.org's Mark Howard put it best when discussing the 12 points listed above:

While Fox News broadcasts flagrant distortions of reality on a daily basis, the examples above transcend the conventional dishonesty and bias that is its hallmark. These assaults on ethical journalism demonstrate how dangerous it is to permit a political enterprise to disguise itself as a news network in order to shape an extreme political agenda. It is evidence of social programming and manipulation at its worst. The sad part is that we can expect much more of this in 2013 ... 

I'll leave it at that, for now.

- Mark

WE'RE STILL ON THE CLIFF

So a bi-partisan Congress passed legislation on tax rates last night (257-167). On the surface this is a big victory for the vast majority of Americans, who won't see their income tax rates rise. President Obama is the clear political winner here, even if he had to redefine "rich" as those making more than $400,000 per year.

However, there were a lot of poison pills that had to be swallowed in order to get this agreement. And we did not avert the fiscal cliff (more on this below).

THE DEAL
This is a clear victory for President Obama because certain tax deductions and exemption will be eliminated, tax rates will be raised on investment income, while taxes on inherited wealth (the so called "death tax" on multi-million dollar estates) will be reinstated.

While the vote means the vast majority of Americans will not see their income tax rates go up, those making more than $400,000 ($450,000 for married couples) will pay a marginal tax rate of 39.6 percent (instead of 35 percent). President Obama did get a victory (of sorts) because he was also able to get a limit on itemized deductions for those making over $250,000 a year ($300,000 for married couples).

While those making between $500,000 and $1 million will only pay about $15,000 more in taxes, those making above $1 million will pay about $170,000 more in taxes per year. The biggest hit will be on people earning more than $2.7 million annually. They will pay about $440,000 more in 2013.

THE CRITICISMS
Critics of the bill from the right say the bill does little, if anything, because it really doesn't touch long-term spending issues, like Medicare. And they would be correct. In fact, included in the bill is an extension of unemployment benefits (1 year) and refundable tax credits for college students and low-income families.

Critics from the left argue while the vast majority of Americans will not see their income tax rates go up 77 percent of America's wage earners will see their payroll (or social security) tax rate go up 2 percent (i.e. return to it's "normal" rate). This will pull more than $100 billion out of the hands of the middle class (a little over $80 per month for someone earning 50,000 a year) in 2013.

But wait there's more. The good people at Nakedcapitalism.com found at least eight major subsidies in the legislation that help out everyone from NASCAR and Disneyland to Goldman Sachs and Railroad companies.

Here's the nuts & bolts behind the our latest corporate giveaway:

* NASCAR: $43 million in subsidies to builders of racetracks and associated facilities.
* RAILROADS: Over $100 million in subsidies for Railroads.
* HOLLYWOOD/DISNEY: Tax breaks that amounted to $150 million in 2010 and 2011 for "certain film and television productions."
* MINING: Tax incentives for mining companies to buy safety equipment.
* GOLDMAN SACHS/TRUMP: Tax exempt financing for New York "Liberty Zone" buildings. This is little more than subsidy for Manhattan apartment and office construction that will benefit, according to Bloomberg "Goldman Sachs and Bank of America Corp."
* INCOME TAX BREAKS: $9 billion in subsidies for U.S. firms that lend to subsidiaries abroad and earn income from that loan. So, yes, Coca Cola U.S. can lend to their firms abroad and then not pay taxes on income from that transaction.
* REPATRIATED PROFITS/TAX BREAKS: Related to above, tax credits are offered for U.S. firms earning money abroad.
* R&D GIVEAWAY: Bonus depreciation allowances and Research & Development credits, which added up to more than $110 billion for 2010 and 2011. 

So, yeah, if you add up all the tax breaks, we actually give more back to corporate America in subsidies than we take in from the $100 billion we get from raising the social security tax level by two points.

THE REALITY ... WE'RE STILL ON THE CLIFF
Here's the worst part. The fiscal cliff was not entirely averted.

Our debt ceiling was reached on New Year's Eve while sequestration, or automatic cuts of $110 billion, goes into effect in early March (unless Congress finds the same amount in spending cuts).

So, this is what we have. We dealt with the tax rate issue yesterday. But congressional bickering over automatic spending cuts (sequestration), and our ridiculous but seemingly annual debt ceiling theater under our current GOP-led Congress will dominate the headlines over the next three months.

Here's the real fun part. There's no debt ceiling in the Constitution.

So, prepare for more of the same in 2013.

Seriously, is this any way to run a country?

- Mark 

LET'S GO OVER THE CLIFF

OK, let's assume you believe the media hype. You probably think that this will happen to our economic ship(s) if we reach the dreaded fiscal cliff ...

Like Christopher Columbus there's no doubt that we will be sailing into uncharted waters. But we will also learn that certain myths and superstitions (about our economy) are best left as myths and superstitions. Here's why.

Like the sailors and engineers who knew a thing or two about the stars and science, we also know what must be done to sail through what many see as uncharted budget territory. Why? Because we went through "the-sky-is-falling" scenario before. It happened when amateur hour prevailed over at Standard & Poor's last year, which I wrote about then.

If you recall, S&P went crazy and downgraded our credit rating. But the world yawned. The financial world, if they see the dynamics behind the fiscal cliff correctly, will do the same thing this time. Specifically, they will see that taking a bad deal, that kicks the issue down the road, is no way to address the budget issues that confront the nation.

What this means (I hope) is that analysts will also begin to embrace the knowledge that there's a difference between the political stupidity and unnecessary brinkmanship (systemic risk) in our political world and what is legitimate financial risk (a debtor that can't pay) in the real world.

Seriously, if we can put ideology aside the U.S. can pay its debts, as I've pointed out many times, in many different ways. I'm not going to hold my breath, but if we're really lucky a Political Reformation and Economic Enlightenment, of sorts, will follow (recall, the Reformation and Enlightenment followed Columbus' voyage).

This means we'll also begin the process of ignoring the false science and political charlatans that make up the lunatic political fringe of our day.

And if we're really really lucky, we might start making the obstructionists pay politically for forcing us into record debt and the crisis political cycles that we've seen since the 1980s, but accelerated after President Obama took office.

I know, I know. But keep in mind that Christopher Columbus and the world got much more than they bargained for after we left feudal Europe for uncharted waters in 1492.

- Mark

BANKS BACK TO BUSINESS AS USUAL

The Swiss based bank UBS is at it again ...

A few years back I wrote about UBS helping their U.S. clients avoid taxes by hiding their money in offshore accounts. Simply put, UBS helped their U.S. clients avoid the tax paying responsibility that comes with having access to the wealth making opportunities they find in America.

Rather than go to court with the U.S. government over hiding money in offshore accounts UBS settled and agreed to pay $780 million in fines.

I bring this up because just before Christmas UBS became the first global bank in more than two decades to have a subsidiary that will plead guilty to interest rate rigging. Specifically, they will be tagged with one count of wire fraud and pay a total of $1.5 billion in fines to U.S., U.K., and Swiss regulatory agencies. Charges are also scheduled to be filed against at least two former UBS traders.

This is really good news, especially since it was my belief five months ago that we probably weren't going to see any of the big financial players get into any serious trouble for fixing LIBOR rates (which affects mortgage and credit card rates). While UBS gets to keep their charter the fact that we're seeing an entire subsidiary of a major global bank take a hit like this is good news.

But let's not get too excited.

We want to keep in mind that UBS was a recipient of more than $70 billion in taxpayer backed low interest rate loans from the Federal Reserve between October 2008 and August 2009. These loans were all part of the Fed's larger $1 trillion-plus loan binge that I wrote about in 2008 (and again last year).

These loans were in addition to the many other financial aid programs made available to help keep UBS and other "too big to fail" banks afloat after 2008.

While getting a guilty plea and a $1.5 billion fine for interest rate rigging is good news we should all keep in mind that a $1.5 billion fine is the functional equivalent of a 2 percent fee on the $70 billion-plus loan noted above.

To put this in perspective, I paid far more than 2 percent (about 6 percent) in mandatory "fees" to get my student loans while in graduate school. I then paid much higher interest rates than the low, chump change, interest rates that UBS and other banks were charged for their Federal Reserve loans after 2008 (and, no, I didn't rig any of our financial markets to get my loans).

So, yeah, in many ways it's back to business as usual for the banks.

- Mark

UPDATE: In the FYI Department, Reuters has learned that U.S. fiancial firms Fannie Mae and Freddie Mac may have lost at least $3 billion because of the manipulation of interest rates.

YES, GOVERNMENT INVESTMENTS ARE NECESSARY

This LA Times piece is one of the best op-ed articles I've read in a while. It explains the role the state has in helping markets prosper by funding and testing projects that don't always work out, but are crucial for opening investigation pathways for future thinkers.

In "Venture capital didn't build that" William H. Janeway - a private equity managing director, and author of "Doing Capitalism in the Innovation Economy: Markets, Speculation and the State" - argues that much of the economic dynamism we saw after World War II was due to government investments that market players can't, and won't, make happen. Here's a snippet:

Why has it been in the world of information technology and, secondarily, biomedicine that venture capitalists have been successful? In brief: Only in these sectors did the state invest at sufficient scale in scientific research and in its translation to working technology. In over 40 years as a working venture capitalist, I learned that my colleagues and I and the entrepreneurs whom we backed were all dancing on a platform constructed by the federal government.

I especially like what Janeway has to say because it touches on the primary point(s) I make here.

- Mark  

THE MEANING OF CHRISTMAS

What Christmas is all about ...

- Mark

THE CHRISTMAS DANCE

Merry Christmas. Time to get in the mood with the Peanuts' Christmas Dance (I dance like the guy in Orange) ...

- Mark

SO, WE'RE STILL HERE?

- Mark 

MAYAN PROPHECY EXPLAINED

Why the Mayan calendar ends so suddenly ...

- Mark

SOCIAL SECURITY IS NOT GOING BANKRUPT

Posted below is a piece I wrote for the Bakersfield Californian, "The 'Social Security is going bankrupt' Lie."  It appeared yesterday. I've added pictures and graphs. Updates and links to rebuttals will follow. I'll be especially sure to link and respond to those that display a total lack of familiarity, or ignorance, with the topic. Enjoy ...
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The 'Social Security is going bankrupt' lie

Here we go again. The Republicans are using debt and tax negotiations as cover to push a dystopian market dream that includes erasing Social Security as we know it from our economic lives. To do so, the GOP is trying to convince America that Social Security contributes to our national debt and is, in the words of Paul Ryan, "going bankrupt."

Both are flat-out lies. Here's why.

Let's remember that Social Security is a self-funding program. It has contributed absolutely nothing to our debt load. In fact, over the years we've contributed so much to our nation's Social Security account a $2.7 trillion surplus now exists.

Congress has raided these surpluses every year. In return we get government security notes. According to the GOP, because these securities are "just IOUs" -- and we're running budget deficits -- we don't have to pay our nation's retirees back. 

Put another way, congressional Republicans are saying America no longer has a legal or moral responsibility to honor its financial obligations.

Anyone who's read the U.S. Constitution (specifically, Article VI) knows we have a constitutional duty to pay our bills. We've done it since the American Revolution. We did it during the Civil War, the Great Depression, and even through the world wars. Still, the GOP argues that since we don't have $2.7 trillion on hand we don't have to honor our Social Security deal, and should cut back on promised benefits.

Hey, I have an idea. Since we don't have $16.3 trillion on hand to pay our national debt, let's not pay our creditors either. Take that China -- and Saudi Arabia -- and Japan -- and everyone else who's lent us money. Or let's cut a deal and pay our creditors 75 cents on the dollar.

As silly as this sounds, it's essentially the argument congressional Republicans are making when it comes to the $2.7 trillion we borrowed from Social Security. And the silliness continues.

After the 2008 market collapse, Congress did virtually nothing as the Federal Reserve and the Treasury Department forked over more than $4 trillion to Wall Street and America's financial sector. But that's not all.

Via an alphabet soup of new loan, credit and guarantee programs (TALF, TSLF, PPIP, Legacy Assets, etc.), the American taxpayer is on the hook for an additional $13 trillion. That's right. More than $17 trillion has been made available to bailout, backstop and pay off the bad bets of the crony capitalists on Wall Street. 

Yet, congressional Republicans say we can't find $2.7 trillion to pay back the seniors who helped fund and build the American Century.

The irony here is that the GOP not only believes it's OK if we don't honor our financial obligations, but many argue we need to "privatize" Social Security if we want to fix it. Huh? 

In real simple terms, "privatization" is GOP-speak for sending the trillions of dollars now running through Social Security accounts to Wall Street (which makes privatization a backdoor bailout in perpetuity, on so many levels).

What gets lost in all the "cut back" and "privatization" double talk is one simple fact. There's no problem with Social Security if we simply honor the Constitution, and respect the contract we made with our nation's seniors.

Still, let's say the GOP gets its way. We become a banana republic, and pick and choose which debts we honor. At worst, our seniors get 75 cents on the dollar after 2033. 

However, as I argued more than six years ago, Social Security isn't in trouble if we:

* Rescind the Bush tax cuts. Rescinding all Bush-era tax cuts brings in around $4 trillion over the next 10 years. It's almost $1 trillion if we target just the top 2 percent. Projected Social Security shortfalls disappear under these scenarios.
* Remove the payroll tax cap. No one pays a dime into Social Security after they earn $110,100. Removing the cap keeps Social Security solvent into the 22nd century.

Rather than discuss these issues, congressional Republicans prefer to scare America about Social Security's future "insolvency" so they can cut back on senior benefits today. Not so coincidentally, they also get to argue that government programs, like Social Security, don't work, while maintaining tax cuts for the rich.

An added bonus for the GOP and its financial backers is how this story line lays the groundwork to sell America on a Wall Street Social Security privatization scheme -- a bailout in perpetuity.

Social Security isn't headed for bankruptcy. What's bankrupt is the moral code of congressional Republicans. It's why they're putting ideology and the interests of Wall Street above the Constitution, and our promise to America's seniors.

Mark A. Martinez, Ph.D., is the author of "The Myth of the Free Market" and a professor of political science at Cal State Bakersfield.

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- Mark