Good morning! Here is today's news:
- Joseph N. DiStefano, The Philadelphia Inquirer — Coalition pushes to cut corporate tax rate:
... The Association of American Railroads backs a new business coalition that wants Congress to cut the top U.S. corporate income tax rate ... The railroads have joined AT&T, Boeing, FedEx, Lockheed Martin, UPS, Verizon, and Walt Disney in pushing for the change. Nike, Time Warner Cable, and the National Retail Federation (Sears and other stores) have also joined the tax-cut group, which calls itself RATE ("Reducing America's Taxes Equitably") ... Why now, when so many big American corporations report high and rising profits, and American individual taxpayers face falling wages and scarce jobs?
Ask not what corporations can do for you but what you the individual taxpayer can do for them. The following graph (via Thinkprogress) expresses corporate income taxes as a share of Gross Domestic Product (GDP). You can see why the Association of American Railroads is a hair's breadth from packing up its railroad tracks and moving to Norway. As a reminder, although the statutory corporate tax rate in the U.S. is high, effective tax rates are much lower thanks to corporate tax loopholes and creative accounting.
- Binyamin Appelbaum, The New York Times — Fed Will Shift Debt Holdings to Lift Growth:
The Fed said that it would invest $400 billion in long-term Treasury securities over the next nine months, using money raised by selling its holdings of short-term federal debt, in an attempt to drive down interest rates on mortgage loans, corporate bonds and other forms of credit.
In a refreshing departure from the naked self interest on display in the coalition to lower already low effective corporate tax rates, the three members of the Federal Open Market Committee (FOMC) who voted against what is being called Operation Twist were all appointed by the banks (Dean Baker explains). The Federal Reserve has a dual mandate that requires it to pursue low inflation and low unemployment. The members of the FOMC appointed by elected officials get the dual part of that mandate. There is legislation before Congress that would remove the bank presidents from the FOMC.
- John Schmitt, Center for Economic Policy Research — What Skills Shortage?:
Some economic analysts argue that an important reason we have high unemployment today is because we have a shortage of skilled workers. Employers have good jobs to fill, but they can’t find qualified workers to fill them. If there really is a shortage of skilled workers, though, we’d expect to see skilled workers’ wages rising.
As the graph illustrates pretty clearly few workers are experiencing rising wages. Because zombie ideas never die, I'm sure within days someone will appear in the pages of a Pennsylvania newspaper claiming that employers can't find workers. If you see that, tell me about it!
Reporters have been working overtime trying to understand the release of another round of poverty data — this time local data from the American Community Survey. Today, the Census Bureau's embargo lifts so here are the news stories I have seen so far summarizing the new data for Pennsylvania. Let me know if I missed any:
- Scott Kraus and Eugene Tauber, The Morning Call - Incomes down, poverty up in Valley in 2010
- Alfred Lubrano, The Philadelphia Inquirer - Poverty rate rose in Philadelphia from 2009 to 2010
- Gary Rotstein, Pittsburgh Post-Gazette - Maybe it's not so bad hereabouts Survey shows improvements in 3 economic areas
- Jason Cato and Brian Bowling, Pittsburgh Tribune-Review - Poor in Western Pennsylvania worse off