Christian Science Monitor:

Warren Buffett paid 17.7 percent of his income in total taxes. His secretary, who made $60,000, paid 30 percent of hers. While making more than $60,000 per hour, the tax rate for America’s top 400 is just 17.2 percent, and they don’t pay that.

How did we end up with this sorry state of affairs?

Lawmakers in Congress have spent the past several decades systematically slicing the tax rates on America’s top income brackets. Their rationale? Lower taxes on the top, free up capital for investment, and boost productivity. In actual economic practice, those lower taxes have served instead to fuel speculation and increase budget deficits.

More than ever, America needs its ultrarich to chip in more.

When it’s all added up, 50 computers left on overnight will cough out as much CO2 as 10 cars.

Naw. Really?

Seems to be true. Check Australia Broadcasting’s Science site here.

Over the 10 years through January, an investor holding the stocks in the S&P 500, and reinvesting the dividends, would have lost about 5.1 percent a year after adjusting for inflation, the Worst Decade Ever. Yes, the Worst Decade Ever, deeper than the Great Depression.

The slump has further to go.

Pensions and retirements are following foreclosures, while jingoists still insist that coddling the rich for trickles and laissez-faire markets will drive consumer pocket money back to the malls. So much has not been said. So many are responsible, including the brochure-mechanics, from talk shows to investment parlors, that gummed nonsense about eternal up-markets on Wall Street.

You know, they all said these events only happen once every hundred years. But we have “once every hundred years” events happening every year or two, which tells me something is the matter with the analysis.

Paul Volker’s very interesting speech.

You might ask how it went on as long as it did.

The grading agencies didn’t do their job and the banks didn’t do their job and the accountants went haywire.

I have my own take on this. There were two things that were particularly contributory and very simple. Compensation practices had gotten totally out of hand and spurred financial people to aim for a lot of short-term money without worrying about the eventual consequences. And then there was this obscure financial engineering that none of them understood, but all their mathematical experts were telling them to trust. These two things carried us over the brink.

… Obviously that hasn’t worked out very well.

We have to look at the accounting system. We have to look at the system for dealing with derivatives and how they’re settled. So there are a lot of systemic issues.

The main point I’m making is that we want to emerge from this with a more stable system. It will be less exciting for many people, but it will not warrant – I don’t think the present system does, either — $50 million dollar paydays in that central part of the system. Or even $25 or $100 million dollar paydays. If somebody can go out and gamble and make that money, okay.

But don’t gamble with the public’s money. And that’s an important distinction.

Obama signed the Lilly Ledbetter Fair Pay Act of 2009 which will make it easier for people to get [to sue for] the pay they deserve — regardless of their gender, race, or age.

“Ultimately, equal pay isn’t just an economic issue for millions of Americans and their families, it’s a question of who we are — and whether we’re truly living up to our fundamental ideals.

“Whether we’ll do our part, as generations before us, to ensure those words put on paper some 200 years ago really mean something — to breathe new life into them with a more enlightened understanding that is appropriate for our time.”

Frank Rich:

No one knows, of course, but a bigger question may be whether we really want to know.

One of the most persistent cultural tics of the early 21st century is Americans’ reluctance to absorb, let alone prepare for, bad news.

We are plugged into more information sources than anyone could have imagined even 15 years ago. The cruel ambush of 9/11 supposedly “changed everything,” slapping us back to reality. Yet we are constantly shocked, shocked by the foreseeable.

Obama’s toughest political problem may not be coping with the increasingly marginalized G.O.P. but with an America-in-denial that must hear warning signs repeatedly, for months and sometimes years, before believing the wolf is actually at the door.

“Shocked by the foreseeable” found at The Reaction blog.

Don’t fall for distortions. Compared to the pie, the slice used for social programs isn’t where to strike the alarm.

Right now, the federal government spends about 9 percent of GDP on the three biggies, Social Security, Medicare and Medicaid, with the total roughly evenly divided between retirement and medical care. – Paul Krugman

There’s much we can fix before pulling social survival.

The trillion-plus Bush deficit, yes the Bush/Republican deficit, is 7 percent of the nation’s GDP plus interest payments on the debt alone is 14% of GDP. We spend more than 4% on war. Oh well… there’s much to do.

Propaganda At Home

1. The Department of Defense has almost as many people working in PR as the State Department employs altogether.

2. AP investigation: DOD spends more on domestic psyops than on foreign psyops.

Motley Fool’s Tom Gardner asserts:

Hundreds Should Go to Jail

Hundreds? Yes, certainly. At least that many.

A year ago, John Thain was given a $15 million signing bonus to take over at Merrill Lynch; in 2008, the company posted losses of $27 billion. Today, Merrill is widely considered a bankrupt subsidiary of Bank of America. Yet this December, Thain lobbied hard to be paid a $10 million bonus. And why not? His predecessor, Stanley O’Neal, received a $160 million retirement package after posting writedowns of $8 billion in a single quarter.

“The law may not change the heart, but it can restrain the heartless.” – Martin Luther King

A little taboo candor at Salon:

… the Phelps affair asks us to feign anger at something we know is commonplace. A nation of tabloid readers is apoplectic that Brad and Jen divorced though half of all American marriages ends the same way. A country’s fetish with family values goes ballistic over Paris Hilton but spends billions on pornography…

…our narcotic of choice is fake outrage.

Can you explain it?

While analyzing the predicament of Spain, so difficult, the conclusion of the report stands out:

Governments have failed on one crucial issue: saving their citizens from economic excesses which carried off their savings, their jobs and their prosperity. It is a failure that must be learned for the future and for making appropriate accountability.

Europe is at far greater risk than the US. Much of Europe could fall further into what would feel like a depression, the stuff of public revolt.

“The euro-region treaties don’t foresee any help for insolvent states, but in reality the others would have to rescue those running into difficulty.”

The longer bar reveals greater difficulty.

For starters, see Time’s 25 People to Blame for the Financial Crisis.

Be cautious when hearing moral assertions that homeowners with faulty credit brought us down.

The overall percentage of problem loans is small — delinquencies rose from 1.45% to 1.55% of 40 million mortgages through January: just 18% of these carried by credit scores under 688, but 7% and rising of FICO ratings above 752.

These are not the percentages that have crushed the global economy.

“We witnessed the collapse of the financial system,” says George Soros. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”

The Crisis & What to Do About It

… Bubbles always involve the expansion and contraction of credit and they tend to have catastrophic consequences. Since financial markets are prone to produce bubbles and bubbles cause trouble, financial markets have become regulated by the financial authorities.

… It is important to recognize that regulators base their decisions on a distorted view of reality just as much as market participants—perhaps even more so because regulators are not only human but also bureaucratic and subject to political influences.

… In contrast to bubbles, which occur only infrequently, the cat-and-mouse game between regulators and markets goes on continuously. [and is] ultimately responsible for the severity of the current crisis.

So much to understand.

Michael Hudson, who holds a strong view on who got us into this mess, is also gaining traction on this:

Calling the $12 trillion giveaway to bankers a “subprime crisis” makes it appear that bleeding-heart liberals got Fannie Mae and Freddie Mac into trouble by insisting that these public-private institutions make irresponsible loans to the poor. The party line is, “Blame the victim.” But we know this is false.

One would think that politicians would be willing to do the math and realize that debts that can’t be paid, won’t be. But the debts are being kept on the books, continuing to extract interest to pay the creditors that have made the bad loans. The resulting debt deflation threatens to keep the economy in depression until a radical shift in policy occurs – a shift to save the “real” economy, not just the financial sector and the wealthiest 10 per cent of American families.

… despite what Milton Friedman said, the economy today is increasingly about how to get a free lunch – how to get the government to avoid taxing it, and shift the tax onto labor and industry instead.

(Incidentally, as one reviewer has said, “Anyone who senses that behind the comforting rhetoric of Free World and Democracy, an aggressive empire lurks with contours and mechanisms unlike previous ones”, should check out Michael Anderson. Although I’m utterly fed up with Socialism vs. Capitalism and a’ that, most major and common economic explanations are rubbish too.)

The CEO of USBancorp, critical of Paulson’s TARP and worried about new D.C. regulation, is also asking us to remain encouraged: “Perhaps what we should do is check ourselves and say, ‘OK, it is tough. What can we — any two of us, any five of us, any 200 of us — do to improve the outcome of this difficult circumstance?’”

This is longish reading, but will show a great deal – i.e. for fixing and new.

“This crisis has turned out to be much broader than anything I could have imagined.”

We citizens, firms and governments owe at least $350 for every $100 of goods or services we put in every year.

“I made a mistake in presuming that the self-interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders.”

Not long ago he said the economy was strong and “also the financial system as a whole has become more resilient”. We believed the maestro could never be wrong, but after nearly 20 years as head of the nation’s monetary policy, Alan Greenspan’s effort to explain continues and continues.

It all started with Reagan and spiked under Bush, with Democrats too: a favoring of capital flow as panacea while running a poor and global game theory. It’s become extreme debt.

An era of much activity, yes, but distorted. It’s hid major flaws in our economy. We have put up with ineffectual and arrogant elite, stubborn and trivial politics, forceful and petty committees, intrusive and weak programs, institutionalized war, of all things, bloated and tricked budgets, ignored regions and deferred maintenance, tethered and restrained innovation, chaotic trade and employment, open pilfering and raw usury. We accept injustice and poverty. We’ve kept old technology where costs are high while consuming style as a first resort. We are left so utterly confused about four-square values that we’re vulnerable to the ranting of blatant superstition flamed by aggrandized and hateful media personalities. We’ve let bullies and ignorance remain human nature.

Oh yes, there’s much we’ve done extremely well. Our nation may be far better than it seems while we sweep away error. We can do that. There’s much to gain offering new and needed solutions to the world again, boosting true prosperity again, repairing exploited services and tramped education, and fixing our governing.

We are climbing a higher mountain now. The map is below.