He repeats it in his distinctive stentorian cadence at every opportunity: "nine…nine…nine." Herman Cain has proposed a radical overhaul of the federal tax code and he's not afraid to stand behind it. The shocker was when voters in a recent Florida straw poll got behind it, too, handing 2012 GOP presidential candidate Cain an attention-getting win.
So, is 9-9-9 a plan that now needs to be taken seriously?
No. It sounds good, but in practice it would basically shift much of the burden of providing federal revenue to the people who can least afford it right now.
The plan would replace the current tax system with a 9 percent flat-rate personal income tax, a 9 percent national sales tax, and 9 percent corporate tax. It's estimated that, taken as a whole, it would reduce federal revenue to $1.8 billion from $2.16 trillion.
Federal Reserve Chairman Ben Bernanke testifies before Congress this morning. No QE3 (yet) but…sympathy for the Occupy Wall Street protesters? Well, he does have that beard…: "'Like everyone else, I'm dissatisfied with what the economy's doing right now.' He says that protesters have merit in being angry over the economy and Washington." (Business Insider)
Ezra Klein on the humble goals of the 99% Occupy Wall Street protesters (and the Occupy LA protesters, too, by association): "There’s not a lot of evidence that these people want a class war, or even particularly punitive measures on the rich. The only thing that’s clear from their missives is that they want the economy to start working for them, too." (WonkBlog)
The battle between buyers and sellers of Bank of America stock: "Investors fear that Bank of America might run short of capital because of large mortgage-related settlements it has struck with angry investors who bought securities backed by those problem loans." (AP)
Wells Fargo is about do it. So is Bank of America. Huge financial institutions with billions in deposits are struggling with post-bailout legislation and passing costs on to their customers. People who've gotten used to swiping their debits cards for every imaginable transaction are about to see that service run them as much as $60 a month.
In the New York Times, Ron Lieber and Ann Carrns assess the pros and cons. But when you get right down to it, there basically are no pros. Here's why:
- Credit unions offer branch deposits. Online banks get dinged for not having a physical place where you can hand over cash or checks to an actual human person. But they don't have a monopoly on old-school, bricks-and-mortar banking. Credit unions also have branch offices — and in many cases are members of networks, so you get a collection of branches that's comparable with the Big Banks.
- Online banking is easy and technologically sophisticated. ING DIRECT, for example, offers a suite of checking accounts that actually earn interest. That's right, they pay you to hold your money. Setting up an account is a relatively simple process. And because money is pretty much just numbers flying around in the electronic ether, it really shouldn't be a problem to adapt yourself to this no-so-brave new world.
- There's no risk to not using a Big Bank. Deposits at BofA are FDIC-insured. But so are deposits at online banks. Credit union deposits are also insured, by the National Credit Union Association (NCUA).
- Not using a Big Bank may actually be BETTER for the Big Bank. Back in late 2009, Arianna Huffington, along with a group of finance folks, got involved with a project called Move Your Money. The idea was to, in a manner of speaking, take from the rich and give to the poor. With in this case the poor being local banks. The upshot would be an surge in funding to "Main Street" banks, which might enable the kind of small-business lending that the country needs to recovery from the Great Recession. And the Big Banks would in turn be less likely to pose a massive risk to the entire system.
I just started reading Michael Lewis' big new Vanity Fair piece on California's precarious finances. More on that later. But for now, check out the chart, above, which tallies up the total debt of all U.S. states and breaks out California's contribution. Doesn't look too bad at first. But remember, there are 50 states. And every single one of them has less debt than Cali.
Taken together, the states have $1.045 trillion in debt. California has about $135 billion. New York is number two at $123 billion. Massachusetts is third, with a distant $75 billion. California isn't twice as high, but it's not far off (and these are 2009 numbers). And this situation is unlikely to improve any time soon. The most recent UCLA Anderson Forecast doesn't anticipate a turnaround in the state economy for another year, with no real sustained progress until 2017.
Kevork Djansezian/Getty Images
Following in the footsteps of the Occupy Wall Street protest movement, a group called "Occupy LA" set up shop in front of City Hall over the weekend and have now begun to move around town.
Back in New York, things had turned ugly, as the two-week protest saw a bunch of protestors arrested as they marched across the Brooklyn Bridge. From what I can tell, Occupy LA was rather more mellow. I asked a KPCC colleague who had visited the protest what the protesters were, you know, protesting. He wasn't sure, but he did say that "We are the 99%" signs were all over the place.
The LA Times explains:
The movement takes issue with corporate influence on government and the shift of wealth and political clout toward the richest 1% of the population. Many protesters carried signs with variations on the slogan "We are the 99%."