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Austerity's Failure: Ireland Finally Asks for Help

When Ireland made the decision to protect all of its banks from losses and cover those losses by imposing austerity measures in 2008, Paul Krugman made hash of the conservatives' argument for adopting that policy. As it turns out, he was right.

Ireland relented on Sunday and formally applied for a rescue package worth tens of billions of dollars, after months of trying to survive its financial crisis with austerity measures and strict budgetary planning.

European Union officials, who had been pushing Ireland to accept help, quickly agreed to the request, committing a staggering amount of funds to an ailing member for the second time in six months.

Ireland's fiscal crisis, like ours, has a mortgage meltdown as its root cause. However, the decision to impose severe austerity measures, including a big tax hike on Irish workers while insisting that the corporate tax rate remain one of the lowest in the world has not proven itself to be effective.

An Irish bailout would mean humiliation for the government ahead of possible national elections early next year. Ireland would lose some control over its finances in return for loans, which could mean being forced to give up the country's rock-bottom corporate tax rate – a key attraction to businesses that annoys other EU countries that have much higher rates.

Because of the concern over panic and contagion, Ireland will request the bailout, and receive it. They should also raise those corporate tax rates sooner rather than later. Enough is enough. It's proven time and again that low corporate tax rates will not sustain economic growth. Ireland's austerity failure stands as a solid argument against conservative austerity nonsense here, there, and elsewhere.



Pakistan Spy Agency Still Supporting Taliban

pakistan_703f3.jpg

I have to think this isn't helping at all. Considering we've had an all-but-declared assault on the Pakistan border for years now, it might be time for Sec. of State Clinton to get over to Pakistan and have a very serious discussion. If the ultimate goal--the only way to "victory" in Afghanistan--is to neutralize the Taliban entirely, this is a good indication we're never going to see victory, since the Taliban is being supported by some high ranking official Pakistani organizations:

Pakistan's main spy agency continues to arm and train the Taliban and is even represented on the group's leadership council despite U.S. pressure to sever ties and billions in aid to combat the militants, said a research report released Sunday.

The findings could heighten tension between the two countries and raise further questions about U.S. success in Afghanistan since Pakistani cooperation is seen as key to defeating the Taliban, which seized power in Kabul in the 1990s with Islamabad's support.

U.S. officials have suggested in the past that current or former members of Pakistan's powerful Inter-Services Intelligence agency, or ISI, have maintained links to the Taliban despite the government's decision to denounce the group in 2001 under U.S. pressure.

But the report issued Sunday by the London School of Economics offered one of the strongest cases that assistance to the group is official ISI policy, and even extends to the highest levels of the Pakistani government.

"Pakistan's apparent involvement in a double-game of this scale could have major geopolitical implications and could even provoke U.S. countermeasures," said the report, which was based on interviews with Taliban commanders, former Taliban officials, Western diplomats and many others.

"Without a change in Pakistani behavior it will be difficult, if not impossible, for international forces and the Afghan government to make progress against the insurgency," said the report.



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California is such a beautiful place to live, especially if you come from the East Coast like I do, but this land-o-plenty has been devastated by Governor Schwarnegger's leadership and a Republican minority that can veto anything.

Proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor, Gov. Arnold Schwarzenegger on Friday outlined a stark vision of a California that would sharply limit aid to some of its poorest and neediest citizens.

His $83.4-billion plan would also freeze funding for local schools, further cut state workers' pay and take away 60% of state money for local mental health programs. State parks and higher education are among the few areas the governor's proposal would spare.

The proposal, which would not raise taxes, also relies on $3.4 billion in help from Washington — roughly half of what the governor sought earlier this year — to help close a budget gap now estimated at $19.1 billion. Billions more would be saved through accounting moves and fund shifts.

"California no longer has low-hanging fruits," said Schwarzenegger at an afternoon news conference in Sacramento. "I now have no choice but to … call for elimination of some very important programs."

Elimination of CalWorks, the state's main welfare program, would affect 1.3 million people, including about 1 million children. The program, which requires recipients to eventually have jobs, gives families an average $500 a month. Ending those payments would save the state $1.6 billion, the administration said. It would also make California the only state not to offer a welfare-to-work program for low-income families with children.

Lawmakers rejected previous attempts by the governor to eliminate the program.

Families would also lose state-subsidized day care under the governor's proposal; about 142,000 low-income children would be affected. That would save the state $1.2 billion. Preschool and after-school care would remain in place, as would some federally subsidized day care.

Schwarzenegger's latest budget proposal is a starting point for negotiations that typically stretch well into the summer. His previous attempts to eliminate landmark state services have been upended by lawmakers who nevertheless agreed to substantial cuts last year. Their alternatives are limited, however; their tens of billions of dollars in temporary tax hikes and program cuts in recent years failed to end the state's chronic budget problems.

The governor blamed legislative inaction for the deep wound to state services. He said if controls on state spending that he has long sought were in place, the budget gap would be much smaller. He also accused the Legislature of failing to move quickly to rein in spending after he called an emergency session of the Assembly and Senate in January for that purpose.

The Democrats who control the Legislature noted that Schwarzenegger vetoed measures they approved earlier this year to address a piece of the deficit. Voters twice rejected the spending controls the governor seeks.

Democratic leaders immediately vowed to reject the governor's plans and craft alternatives, which they said could include new taxes on oil companies as well as the abolition of some corporate tax breaks.

"I am disappointed that the governor has chosen to surrender," said Senate leader Darrell Steinberg (D-Sacramento), "that he proposes a budget that kills the economy and harms so many. … We will not be a party to devastating children and families."

Outside the governor's news conference, scores of union workers shouted, "Shame on you."

Meanwhile, Republican lawmakers, who hold enough votes to block tax increases and budgets, embraced the governor's approach.



Massive Flooding In The Midwest

Reuters:

Overflowing rivers in Iowa and other Midwest states forced evacuations and disrupted the region's economy on Friday with fears of worse to come from fragile levees and more rain.

A Cedar Rapids hospital was flooded and evacuated its patients after a levee break on the Cedar River turned the downtown area into a shallow lake. Thousands were forced to leave their homes in the worst Midwest flooding in 15 years. [..]

Iowa Gov. Chet Culver said the damage to his state could cost billions of dollars. Scores of bridges spanning nine overflowing rivers have been swept away or weakened.

Clean, safe drinking water is a major concern right now. If there are local rescue agencies that can help in all the affected areas, please leave their names in the comments for other C&Lers.



Catching bin Laden (or not)

Fred Thompson’s reaction to today’s Osama bin Laden tape:

“Bin Laden is more symbolism than anything else,” he said.

Mitt Romney on bin Laden:

[Romney] said the country would be safer by only “a small percentage” and would see “a very insignificant increase in safety” if al-Qaida leader Osama bin Laden was caught because another terrorist would rise to power. “It’s not worth moving heaven and earth spending billions of dollars just trying to catch one person,” Romney said.

Bush on bin Laden:

“I truly am not that concerned about him.”

At what point did the GOP decide that bin Laden no longer matters? And how would the right respond if Dems made similar comments?



Mike's Blog Roundup

Waveflux: The father of LaVena Johnson - the soldier who died under clouded circumstances in Iraqtwo years ago - will speak at Veterans for Peace national convention.

Corrente: Did Democrats capitulate when it came to gutting the Fourth Amendment, or is there more to it than that?

Gin and Tacos: The V-22 - 25 years and billions of tax dollars later, our soldiers now have an unarmed, stationary target that occasionally falls out of the sky on its own.

Walking with Ghosts: Cecilia Sarkozy is just a normal woman who can't stand the idea of being in a room with George Bush. Is that so hard to understand?

Urban Honking: Do you have what it takes to survive Ultimate Blogger 3?

Guest blogged by Bill Wolfrum. Send links to Bill at wkw (at) williamkwolfrum (dot) com.



Mike's Blog Round Up

Fables of the reconstruction: Over 20% of Gitmo inmates free to go but not allowed to leave

BeggarsCanBeChoosers: Count on the GOP to dust off the Lee Atwater playbook if Obama gets the 2008 nomination

PEEK: Federal contractors owe billions in unpaid taxes...hope you enjoyed paying yours

Martini Republic: Another feckless, war-pimp pundit feigns amnesia

Mercury Rising: The hackery never ends...your American media at work

democracy arsenal: Gross Incompetence...no, it's not George Bush



How To Wield Power

NoQuarter:

The Los Angeles Times has a must-read piece today on renewed oversight and coming investigations:

Rep. Ike Skelton knows what he will do in one of his first acts as chairman of the Armed Services Committee in the Democratic-led House: resurrect the subcommittee on oversight and investigations.
The panel was disbanded by the Republicans after they won control of Congress in 1994. (emph. added)

Disbanded in 1994. Doesn't that go a long way in explaining the billions and billions that the GOP-controlled Congress allowed to disappear, particularly during the Iraq war?

Read on...



Rep. Jerry Lewis under fire

Georgia10 reminds me:

MSNBC:

"You may not have heard of him, but Rep. Jerry Lewis, R-Calif., is one of the most powerful members of Congress, chairman of the House Appropriations Committee, which controls hundreds of billions of dollars."

Lisa Myers: You were allowed to write language for an appropriations bill yourself?

Casey: Yes, I did. That was Congressman Lewis' suggestion.

Casey says Lewis repeatedly urged him to hire a lobbyist, former U.S. Rep. Bill Lowery, Lewis' close friend, and when that didn't happen, pressed for another favor.

Casey: Congressman Lewis asked me to set up stock options for Bill Lowery in our company.

Today, the Washington Post reports on more possible corruption.



Reverend Dr. Joseph Lowery: No WMD's and no help for the poor

icon Download | play -WMP icon Download | play -QT (might still be loading David Edwards)

Atrios:

"We know now there were no weapons of mass destruction over there [standing ovation]... but Coretta kew and we know that there are weapons of misdirection right down here. Millions without health insurance. Poverty aounds. For war billions more but no more for the poor." -Reverend Dr. Joseph Lowery, at the Coretta Scott King funeral, in front of 4 presidents....read on