“The cornerstone of politics today is grievance” noted Jon Stewart in a recent interview. “It’s really hard to keep that going when you’re in power. I’ve admired their ability to hold onto that idea of being aggrieved while maintaining almost absolute control of all functions of government. I love it. And what are they most angry about? People who play the victim card.”

In 2005, a year in which the economy grew quite fast, the income of non-elderly families lagged behind inflation.

Once the Bush tax cuts have taken effect, the top 5% of the population will have received almost 50% of the benefits.

Even the Bush-appointed Climate Change Science Program acknowledged "clear evidence of human influences on the climate system." A study released in February indicated that greenhouse gases were being released at a rate 30 times faster than a well-studied climate shift 55 million years ago. "It is clear as a bell that the rapid warming of the past 30 years is due to human-made greenhouse gases" said physicist James Hanse, at NASA, a leading expert on climate change.

Snow and ice cover in the Himalayas has shrunk by about 30% since the 1970s.

The number of Category 4 and 5 Hurricanes worldwide has nearly doubled over the past 35 years.

When America invaded Iraq, the Bush Administration suggested that the war would pay for itself, due to increases in oil revenue. So far, that has not been the case. According to Joseph Stiglitz, winner of the Nobel Prize in Economics, the true cost of the war will likely approach $2.3 Trillion, including past an future spending for the war itself ($725 Billion), health care and disability benefits for veterans ($127 Billion), hidden increases in defense spending ($160 Billion), as well as the indirect costs of loss of productivity from veterans ($335 Billion), and higher oil prices ($450 Billion). Americans, and their children and grandchildren, will be paying the price for decades to come.

The property and casualty insurance industry's surplus is $445.5 Billion. (i.e. the money the industry has left over, after it sets aside money to pay claims filed by their policyholders). The Insurance Industry's profits for 2005 was $43 Billion. The Insurance Industry's profits from just the first half of 2006 was $26 Billion. Approximately 60,000 Gulf Coast policyholders still have claims unresolved, more than a year after Hurricane Katrina.

The percentage of U.S. GDP represented by salaries and wages today is 45%. This is the first year, since records started being kept in 1929, that the percentage was so low.

In August, California became the first state to regulate green-house-gas emissions. While the Chamber of Commerce complained about the adverse economic effects, an article in The Economist pointed to similar arguments made when California imposed unusually strict emissions standards in the 1970s. The Chamber’s President, according to the piece, “concedes that business has benefitted from tough clean-air regulations. They have made California’s environment more attractive, and the state has developed technologies for things like energy-efficient buildings that have subsequently been sold elsewhere. California’s economic performance (despite power prices which, partly because of regulation, are 40% above the American average) makes it hard to argue that business in the state is groaning under its heavy regulatory burden.”

While hourly wages, adjusted for inflation, are substantially below what they were in 1972, corporate profits, thru the first quarter of 2006, were running at 12.7% of gross domestic product, the highest they have been since they started keeping statistics in 1959. Corporate profits, as a percentage of sales, are the highest they have been since 1965.

As Americans were in the process of shifting the balance of power away from the Republicans, corporations who were earning profits at record levels were planning an “end run” around Congress to scale back the Sarbanes-Oxley requirements and insulate them from lawsuits through the rule-making process – i.e. a few political appointees, who serve at the pleasure of the President.

In 2000, Congress passed 6,073 earmarks; by 2005, the number was 15,877.

Dennis Hastert, the former Speaker of the House, put $2 Million into his own pocket by inserting $207 Million of pork into the budget for a “Prairie Parkway” running next to some land Hastert had invested in.

Don Young, “Mr. Pork”, a Republican Congressman from Alaska, helped ensure that Alaska receives $1.87 in Federal funds for every $1 it pays in taxes. The $1 Billion in pork included a $400 Million “Bridge to Nowhere”. When John McCain proposed that this earmarked would be better devoted to the rebuilding of New Orleans, Young said that the victims of Katrina “can kiss my ear!”

The Energy Bill contained $6 Billion in subsidies to the Big Oil companies.

Over the last 35 years, the rise in wages and salaries in the middle income distribution was 11%. The rise in wages and salaries in the top of the income distribution was 617%.

Between 1966 and 2001, only 10% of Americans saw their wages and salaries rise on pace with overall productivity.

From 1997 to 2001, the top 1% captured more of the economic gains in wages and salaries than the bottom 50%.

In 2004, the wealthiest 1% of households garnered 53% of the income.

Median incomes for people of working age have fallen for five straight years, bringing in $3,000 less per year, when adjusted for inflation.

The gap between the nation’s CEO’s and average workers is ten times greater than it was a generation ago. Since 1970, the hourly wage of the average worker has actually fallen, when adjusted for inflation. The salary of the CEO, by contrast, has increased from 30 times the average wage to almost 300 times the average worker’s pay.

In 1969, GM was the largest employer. The CEO was paid a salary of $795,000, the equivalent of $4.2 million in today’s dollars, adjusting fro inflation. The average worker was paid $8,000, or approximately $45,000 in today’s dollars, and also received excellent health and retirement benefits. In 2006, Wal-Mart is the largest employer. The CEO is paid $23 Million, while the average non-salaried worker is paid only $18,000, with little, if any, health benefits.

The Bush Administration, of course, does not set the wages of ordinary workers nor the compensation of CEOs. But, Paul Krugman notes, the Bush Administration did contribute to the gap by: (I) consistently opposing the minimum wage; (II) stripping workers of their rights to unionize; (III) diverting attention from corporate scandals by invading Iraq; and (IV) rewarding the wealthy with extremely disproportionate tax benefits. “In the 2000 election” Krugman writes, “Bush joked that his base consisted of the ‘haves and the have mores.’ But it wasn’t much of a joke. Not only has the Bush Administration favored the interests of the wealthiest few Americans over those of the middle class, it has consistently shown a preference for people who get their income from dividends and capital gains, rather than those who work for a living.” Last year, the Senate passed a tax-cutting bill with two-thirds of the benefits flowing to those who earned between $100,000 and $500,000, with those earning over $1 million a year getting around 8% of the cuts; the House, by contrast, voted to extend the capital gains taxes, with 40% of the cuts flowing to those making over a million dollars a year, versus only 30% to those earning between $100,000 and $500,000. (“What” Krugman asks, “were they doing cutting taxes yet again in the face of a huge budget deficit and an expensive war?” Nevertheless:) Bush, of course, favored the House bill, and over 25% of the tax relief went to those making over a million.

Since Bush took office, wages have remained stagnant, while corporate profits have doubled. Those profits will ultimately be reflected in dividends and capital gains, which go to the wealthiest Americans, as 75% of all stocks are owned by the richest 10%.

In 2003, the pretax income of the top 5% of Americans was 20 times the income of the average income of households. In 1979, the ratio was 10 to 1.

Ben Stein, the actor and economist who is a noted Republican, questioned “supply side” economists who suggest that, by lowering taxes, people will have an incentive to work harder, because they will keep more of what they earn. “Of course, you could also say that if we keep more of what we earn, we won’t need to work as much, so we’ll work less. But no one pays much attention to that.” How, in any event, Stein continues, could income tax cuts stimulate economic activity except by encouraging Americans to work more, or by having additional people enter the work force? Yet, the number of hours Americans work per week has barely moved in the five years since Bush’s tax cuts, and is a lot lower than the number of hours worked in 1959, when income tax rates were much higher; and overall labor force participation has barely changed since 1989.

The Republican recently wrote another op-ed in which he recounts a meeting he had with Warren Buffett. Stein had been on a number of television panels questioning the propriety of enjoying what economists call “full employment” while running a budget deficit of $434 Billion for 2006, (not counting off-budget items such as Social Security). He met with Buffett, who confirmed that while “the rich pay a lot of taxes as a total percentage of the taxes collected, they don’t pay a lot of taxes as a percentage of what they can afford to pay, or what the government needs to close the deficit gap.” After illustrating the comparative tax burden of his secretaries and other staff, which, as a percentage of total income, was far greater than Buffett’s own tax burden, Buffet said: “There’s class warfare, all right. But it’s my class, the rich class, that’s making war, and we’re winning.”

In 2000, the Government collected $1.004 Trillion in taxes. This fell to a low of $794 Billion in 2003, after the Bush tax cuts went into effect. Only by the end of 2006 did revenue surpass the $1 Trillion mark again. In the meantime, the Republicans (who were in control of both Congress and the Executive Branch during that time period) had added $2.7 Trillion to the National Debt.

(Talk about “personal responsibility”.)

People ask Ben Stein how he can be a conservative and still want higher taxes. “I thought that conservatives were supposed to like balanced budgets. I thought it was the conservative position not to leave heavy indebtedness to our grandchildren.”

I grew up believing that the Democrats were “tax and spend” while the Republicans were fiscally responsible. But, based on the past 12 years, I don’t think that’s it at all. The Democrats were big spenders because they were the party in power in Congress. When the Republicans are the party in power, they have to “bring home the bacon” to keep their jobs, just like Democrats. Whether that comes in the form of increased spending, or decreased taxes – or, as in recent years, both – this is not a Party issue. Nor is it an issue of Political or Economic Philosophy. Incumbents spend money. Whether they are Democrats or Republicans.

(Incidentally, as I grew up with these beliefs about the Parties’ relative fiscal approaches, I always wondered why Reagan got all of the credit for the prosperity of the 1980s, while the Democrats in Congress got all of the blame. It always seemed to me that it was reasonable to conclude that the net effects of taxing and spending, in globo, both positive and negative, were the result of the mixed bag of nuts you got from a Republican President with a Democratic Congress, and that everyone had to take the good with the bad, as there was both a lot of credit and a lot of blame to go around.)

Although every President and every Congress promises to cut the “wasteful” spending, it always increases, no matter who is in charge.

“Now I recall” writes Stein. “Things changed when we figured out that we could cut taxes and generate so much revenue that it would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved this theory was wrong?

“This brings me back to Mr. Buffett. If, in fact, it’s all just a giveaway to the rich masquerading as a new way of stimulating the economy and balancing the budget, please, Mr. Bush, let’s rethink it. I don’t like paying $7 Billion a week in interest on the debt. I don’t like the idea that Mr. Buffett pays a lot less in tax as a percentage of his income than my housekeeper does or I do.”

In The Great Risk Shift, Jacob Hacker illustrates how “over the last generation, we have witnessed a massive transfer of economic risk from broad structures of insurance, including those sponsored by the corporate sector as well as by government, onto the fragile balance sheets of American families.”

A Senate Report on tax fraud said that so many ultra-rich Americans evade taxes through offshore accounts that complete enforcement is impossible. The report estimated an annual loss of $70 Billion, including $10 Billion in fake securities transactions used to generate fake capital losses.

Scientists at the EPA accused top officials of bowing to political influence, ignoring the science and allowing dangerous chemicals to be used in agricultural pesticide products.

The chances that a Californian lives in an area where the pollution level exceeds the state’s legal limit is 9 in 10. The estimated amount that smog costs California in extra health care expenses each year is $71,000,000.

Total tort “costs” as a percentage of GDP were only 2.28% in 1986, and fell to only 2.22% in 2004.

Over a 54-year period studied by the Economic Policy Institute, there was no relationship between tort “costs” and job loss or growth.

The only real evidence of job loss attributable to the tort system were due to asbestos company bankruptcies; yet the overall effect on employment amounted to less than two-thousands of one percent. In addition, the net job loss, if any, was offset by employment gains at competing firms producing asbestos substitutes such as Kevlar and fiberglass.

As tort “costs” increased in the 1970s and early 1980s, spending on Research & Development rose, rather than fell. R&D, as a percentage of GDP, has remained level over the past 20 years, even as tort “costs” have declined from 1987 to 2001.

The Economic Policy Institute found no evidence of a significant relationship between tort “costs” and productivity. To the extent there is an association, increases in tort “costs” actually seem to be associated with higher productivity.

The entire tort “costs” of medical malpractice suits, (broadly defined to include the costs of insurance company profits and overhead, claims handling, and claims paid without the necessity of litigation), were only 1.5% of the total health care costs for 2004.

The Congressional Budget Office concluded that even a reduction of 25 - 30% in malpractice “costs” would lower health care costs by only 0.4 - 0.5%. In other words, health care inflation for 2004 would have been 7.8% instead of 8.2%.

The average sea temperatures of the tropical Atlantic and Pacific Oceans have risen by 1.2 and .58 degrees Farenheit during the 20th Century.

Earlier this month, the Government Accountability Office said its initial estimate of $1 billion in disaster aid waste was "likely understated," citing continuing problems in which FEMA doled out tens of millions of dollars in fraudulent housing assistance. Among the current investigations: (1) The propriety of four no-bid contracts together worth $400 million to Shaw Group Inc., Bechtel Group Inc., CH2M Hill Companies Ltd., and Fluor Corp. that were awarded without competition. - The contracts drew immediate criticism because of the companies' extensive political and government ties, prompting a promise last year from Paulison to rebid them. Instead, FEMA rebid only a portion and then extended their contracts once, if not twice — to $3.4 billion total — so the firms could finish their remaining Katrina work. The four companies, which have denied that connections played a factor, were among six that also won new contracts after open bidding in August. The latest contracts are worth up to $250 million each for future disaster work. [I, personally, don't have as much of a problem with the Shaw contracts, as it's at least a Louisiana company.] (2) The propriety of 36 trailer contract awards designated for small and local businesses as part of Paulison's promise to rebid large contracts. Homeland Security Inspector General Richard Skinner is reviewing whether some small and local businesses were unfairly shut out in favor of winners such as joint venture PRI-DJI. DJI stands for Del-Jen Inc., a subsidiary of Fluor, which has donated more than $930,000 to mostly Republican candidates since 2000. "It's not what you know, what your expertise is. I don't even believe it's got much to do with price. It's who you know," contends Ken Edmonds, owner of River Parish RV Inc. in Louisiana, a company of 9 people whose application was rejected. PRI, a minority-owned firm based in San Diego, said it is the "majority partner" with Del-Jen as part of a federal mentoring program offered by the Small Business Administration. The joint venture received four Katrina contracts worth up to $100 million each based on price and "knowledge of work with the federal government," president Frank Loscavio said. (3) Whether small and minority-owned businesses were unfairly hurt after the Bush administration initially waived competition requirements. For many weeks after the storm, minority firms received 1.5 percent of the total work — less than one-third of the 5 percent normally required — because they weren't allowed to bid for many of the emergency contracts. The National Black Chamber of Commerce called the figure appalling because of the disproportionate number of poor, black people in the stricken Gulf Coast, prompting Sen. Olympia Snowe, R-Maine, and Rep. Donald Manzullo, R-Ill., to request GAO to investigate.

The U.S Government recovered $3.1 Billion in settlements from whistle-blower suits, for which it only had to pay the whistle-blowers and their attorneys $190 Million.





[See Ross Eisenbrey, “Tort Costs and the Economy: Myths, Exaggerations, and Propaganda” Economic Policy Institute, Nov. 2, 2006; Paul Krugman, “The Great Wealth Transfer” Rolling Stone, Dec. 14, 2006, p.44; Clive Crook, “The Height of Inequality” Atlantic Monthly Sept. 2006, p.36; Ben Stein, “My Country, Right and Wrong (by Why So Wrong?)” New York Times, Aug. 6, 2006, p.20; Ben Stein, “In Class Warfare, Guess Which Class Is Winning” The New York Times, Nov. 26, 2006, p.3; “Harper’s Index” Harper’s Magazine, Nov. 2006, pp.11, 80; “Numbers” Time; David Leonhardt, “The Shrinking Safety Net” New York Times Book Review Oct. 29, 2006, p.28 (reviewing Jacob Hacker, The Great Risk Shift (Oxford University Press 2006); Jane Bryant Quinn, “The Economic Perception Gap” Newsweek, Nov. 20, 2006, p.59; "Top 100 Science Stories of 2006" Discover Jan. 2007, pp.26-27, 38-39, 45, 77-78; Jon Stewart, quoted in “America’s Anchors” by Maureen Dowd, Rolling Stone, Nov. 16, 2006, p.58; "Insurers Saw Record Gains in Year of Catastrophic Loss" LA Times, April 5, 2006; "Homeowners decked by Katrina still wait for insurers to pay up" USA Today, Aug. 25, 2006; "State Farm sued over claim denials; 669 homeowners say insurer didn't investigate Katrina damage" Associated Press, May 10, 2006; "Fraud, Waste from Hurricane Katrina Could Top $2 Billion" Associated Press, Dec. 25, 2006; “The Corporate End Run” New York Times Nov. 12, 2006, p.11; Charles M. Young, "The $2 Trillion War" Rolling Stone, Dec. 28, 2006, p.46; Robert Samuelson, “Trickle-Up Economics?” Newsweek Oct. 2, 2006, p.40; “Week in Review” New York Times, Aug. 6, 2006, p.2; Matt Taibbi, “The Worst Congress Ever” Rolling Stone Nov. 2, 2006, p.46; “Doing it Their Way” The Economist Sept. 9, 2006, p.22.]


[Note - The views expressed on this political blog / New Orleans blog / blawg relating to tort reform, Hurricane Katrina, personal responsibility, and other issues are the personal observations of Steve Herman and are not intended to represent the views of Herman Herman Katz & Cotlar, Herman Mathis, LTLA, LAJ, ATLA, AAJ, Public Justice, TLPJ, Loyola Law School, the Civil Justice Foundation, or any other organization.]

Since 1979, the share of pretax income going to the top 1% of American households has risen by 7 percentage points, while the share of pretax income flowing to the bottom 80% has fallen by 7 percentage points. “It’s as if every household in the bottom 80 percent is writing a check for $7,000 every year and sending it to the top 1 percent.”


David Leonhardt, “Larry Summers’s Evolution” New York Times Magazine, June 10, 2007, p.22.

“Despite President Bush’s insistence that ‘the struggle against radical Islam is the fight of our generation,’ he’s chosen to fund the Iraq War by putting the entire $600 Billion cost – soon to be $1 Trillion – ‘on our children’s VISA Cards.’ Last week, a group of House Democrats proposed the obvious: Rather than funding the war by simply adding it to our already monstrous National Debt, we do what this country has always done in wartime – pay slightly higher taxes until it’s over. The White House, of course, immediately ridiculed the idea. But the reasoning of the proposal’s sponsor, Representative David Obey, is difficult to dismiss: ‘If this war is important enough to fight, then it ought to be important enough to pay for.’”


Thomas Friedman, The New York Times, as quoted in The Week, Oct. 19, 2007, p.18.