From today’s WSJ article “Ethanol Industry Is Losing Clout“:
Opposition to the ethanol industry’s goals has grown significantly stiffer, and even groups that were originally sympathetic to ethanol are drifting away.
The so-called barnyard lobby — representing the meat, livestock and poultry industries — says high corn prices are hurting its profits. The price of corn-based animal feed has increased about 60% since 2005, according to the U.S. Department of Agriculture.
“Our single biggest priority is for Congress to reject a new renewable-fuels mandate,” says Jesse Sevcik, vice president of legislative affairs at the American Meat Institute, a meat and poultry trade association.
Some environmentalists say unchecked growth in ethanol production could lead to soil erosion and degradation of wildlife habitats as more land is turned over to corn production.
The spreading coalition against new ethanol mandates includes the American Petroleum Institute, representing the oil industry. It says it supports ethanol but prefers a market-driven approach, rather than one driven by the government.
“Many policy makers were seduced by ethanol,” says Cal Dooley, president of the Grocery Manufacturers Association. He opposes increasing federal support for ethanol.
MP: Saying politicians were “seduced” might be a polite way of saying they were “duped?” When you have environmentalists on the same side of an issue as the American Petroleum Institute, you know that ethanol is indeed “dangerous, delusional bullshit,” as Rollingstone magazine said in its article “Ethanol Scam: Ethanol Hurts the Environment And Is One of America’s Biggest Political Boondoggles.” Further, you also know that something’s wrong with ethanol when you have the NY Times, Rollingstone, and LA Times agreeing with the Wall Street Journal and Investor’s Business Daily that ethanol is a scam.
According to an analysis by the Tax Foundation, based on recently released data from the Internal Revenue Service for 2005 (see chart above, click to enlarge):
The top-earning 25% of taxpayers — those with an Adjusted Gross Income (AGI) over $62,068 — earned 67.5% of the nation’s income, but they paid 86% of taxes collected.
The top 1% of taxpayers (AGI over $364,657) earned about 21% of the nation’s income, yet paid more than 39% of all federal income taxes collected.
That means the top 1% paid about the same amount of federal individual income taxes as the bottom 95 percent, and the top 5% paid more (about 60% of all taxes collected) than the bottom 95% (about 40% of all taxes).
The IRS data also shows increases in individual incomes across all income groups:
Just as the highest earners lost the biggest percentage of their incomes during the recession of 2001, so they have prospered the most as the economy has continued to rebound.
Between 2000 and 2005, pre-tax income for the top 1% group grew by 19.1%, and the pre-tax income for the bottom 50% increased by 15.5% during the same period.
This pattern of income loss and growth at the top of the income spectrum is the same during every recession and recovery, says the Foundation. The net result has also been a sharp rise in federal government tax revenue from 2003-2005 compared to previous years.
Note: The top 1% paid 35.7% of all income taxes in 2004, and 39.38% of all income taxes in 2005, suggesting the “rich” now pay more as share of all income taxes than before and the tax burden on the rich has increased. Weren’t the income tax cuts of 2003 supposed to be “tax cuts for the rich?”
1. Less (fewer?) than two weeks ago on Sept. 27, I posted about India’s stock market setting a new record high above 17,000 for the benchmark BSE Index. Well, India’s stock market just set another record high, passing the 18,000 mark yesterday, rising 1,000 points in only 8 trading sessions (see chart above).
2. China now has 106 billionaires, up from only 15 last year, as surging stocks boosted the wealth of the nation’s richest people. China’s billionaire tally is second only to that of the U.S., which has 400, as surging mainland and Hong Kong stock markets have boosted wealth. Hong Kong’s Hang Seng Index is up 41% this year through yesterday, the strongest annual performance since 1999 if it holds through year-end (see chart above).
What would Mao say? “Let a hundred billionaires bloom”?
(Thanks to Sanil Kori)
Some double abuse here:
From an elementary school, where are the “teacher’s”?
Notice more double abuse here, check the fine print:
Maybe we should strike for better education?
What’s with that puny piece of punctuation? Read more here.
From its monthly report released last Friday, the “CBO estimates that the federal budget deficit was about $161 billion in fiscal year 2007 (ended September 30), $87 billion less than the shortfall recorded in 2006. Relative to the size of the economy, that deficit was equal to 1.2% of gross domestic product, down from 1.9% in 2006. (See top chart above)
The CBO also reported that “receipts in 2007 were about $161 billion (or 6.7%) higher than in 2006,” with individual tax receipts up by 11.3% and corporate tax receipts up by 5% (see bottom chart above).
And from today’s WSJ staff editorial
Americans coughed up a record $2.568 trillion in taxes to the IRS in 2007, or 6.7% more than in 2006. This means federal receipts have climbed by $785 billion since the 2003 investment tax cuts, the largest four-year revenue increase in U.S. history. Income, dividend and capital gains tax rates were all cut in 2003, but individual income tax receipts have soared by 46.3% in four years, with payments by the wealthy accounting for most of the windfall. Last year’s increase in individual income payments was 11.3%, or more than double the rate of growth in nominal GDP.
The overriding lesson here is that the best antidote for deficits is faster growth, not tax increases. The budget deficit has declined more rapidly this decade in the wake of the Bush tax cuts than it did in the 1990s in the wake of the Clinton tax increases.
U.S. recession 2007 odds:
U.S. recession 2008 odds:
From today’s WSJ article “No Recession In Sight,” by the chief economist of the Bank of America:
“Despite recent financial turmoil and a dismal housing market, there are key reasons why the economy will continue to expand, albeit at a modest pace, and not go into recession. Businesses are well poised to absorb a period of weaker product demand and are unlikely to significantly alter their hiring and investment behavior. Consumer spending is supported by rising incomes. Exports are strong. And monetary policy is consistent with sustained growth in domestic demand. Next year, we will look back and once again marvel at the flexibility and resilience of the economy.”
The “no recession in sight” view is confirmed by futures trading on Intrade.com for contracts on a “U.S. Recession in 2007″ and a “U.S. Recession in 2008,” shown in the graphs above. For 2007, the chances for a recession have fallen from almost 15% a month ago to almost 5% currently. For 2008, odds of a recession were above 50% for most of September, and have now fallen below 50% in the last week.
Upcoming: On Decemer 1, 2007, the U.S. economic expansion will celebrate its 6th birthday.
Child labor is alive and well in America, read about it here in Slate.
From today’s WSJ article “India’s Populists Resist Big Retail”:
As India’s middle class grows and the shopping expectations of its citizens increase, retailing has become a magnet for Indian conglomerates and for Wal-Mart and other foreign operators.
India’s total retail market is about $370 billion a year and will expand more than 55% in the next four years to almost $600 billion. (MP: In contrast, annual U.S. retail sales are about $4.5 trillion, but is growning only about 4% per year). Supermarkets and department stores account for less than 5% of the industry, with millions of small grocers, tobacco stands and tea stalls constituting the rest.
Big issue: Those small Indian retailers with a 95% market share aren’t too excited about sharing the expanding market with big retailers like Wal-Mart and its Indian partner Bharti Enterprises.
Just like in the U.S., in India there’s a “growing backlash among those seeking to protect the livelihoods of small merchants and squelch the plans of large Indian retailers and foreign giants such as Wal-Mart Stores. The protesters contend that the introduction of large retailers will throw hundreds of thousands of smaller merchants out of work, an issue that has been simmering in the U.S. for decades with the expansion of Wal-Mart and other big retailers.”
Clarification: It would be the millions of (“greedy?”) Indian consumers who might decide to shop at Wal-Mart for lower prices, better selection and more convenient hours, who would put the small Indian merchants out of business, not Wal-Mart and Bharti.
As I pointed in an article about “consumer greed,” Wal-Mart can’t force people to shop at its stores; all it can do is offer a low-priced alternative to the high-priced small merchants. “Greedy” consumers do the rest.
In a market economy, it is consumers, not businesses, who ultimately make all of the decisions. When they vote in the marketplace with their dollars, consumers decide which products, businesses, and industries survive—and which ones fail. It is therefore consumers who indirectly but ultimately all of the decisions, not corporations.”
Shouldn’t the Indian consumer be able to vote with their rupees and shop at Wal-Mart if they want to?
NEW YORK (CNNMoney.com) — Despite a housing slump across the rest of the nation, home sellers in New York City are selling houses faster with the number of listings reaching a two-year low.
Prudential’s Douglas Elliman reported that inventory in Manhattan fell 31.7% to 5,204 units in the third-quarter from a year-ago total of 7,623 units, while units stayed on the market for 123 days, faster than the 150 days seen in the same period last year.
Corcoran Group reported that the average (mean) price of an apartment in Manhattan jumped to $1.41 million, up 14% from the same quarter last year. Market-wide, a Manhattan apartment sold for between a median price of $815,000 and $895,000 during the three months ended September 30.