What's This "We" Jazz, Larry Summers?The only hope is that future historians do the critical work of checking what the big shot figures said against the hard facts. That is how real history is written.
In an interview in the NYT Larry Summers, who was Treasury Secretary under President Clinton and head of President Obama's National Economic Council, was asked about his portrayal as a supporter of deregulation in Inside Job and Frontline. In his his response he said:
"Did we 10 years ago foresee everything that happened with respect to derivatives? Absolutely not."
Of course there were people who did foresee problems with a vast unregulated derivative market, most notably Brooksley Born. As head of the Commodity Futures Trading Commission in the Clinton administration she proposed tighter regulations for options, futures, credit default swaps and other derivative instruments. She was beated back in this effort by Alan Greenspan, Larry Summers, Robert Rubin, and other Clinton officials with close ties to Wall Street.
Some of us also saw the growth of the housing bubble and recognized the enormous risk that it posed to the economy. Mr. Summers was not among that group nor was anyone else among President Obama's economy advisers.
Of course it would be nice if people alive and voting today knew the real facts. Then they might vote differently in the next election. And they might force Obama to distance himself from the gang of insiders who helped set up and perpetuate the financial crisis for the benefit of Wall Street.
Oh... and here is an example of Dean Baker showing how media helps create and perpetrate "myths" that benefit our overlords:
The NYT Doesn't Understand Marginal Tax RatesThe only protection against getting mugged is to "know your neighborhood". The only protection against getting a political mugging is to "know who controls the media and what is their political persuasion".
The NYT ran a column asking whether people who make more than $250,000 are really rich. It told readers that the richest 2 percent of the population face money problems also, suggesting that those near this cutoff for tax increases by President Obama might be unfairly victimized.
The poster child for this story is a person named Mason, who live in Manhattan with 2 young children and reportedly makes $262,000 a year. Since the 3 percentage point increase in the tax rate would only apply to income above $250,000, or $12,000 of his income, Mason would have to pay an additional $400 a year in taxes.
This comes to approximately 0.16 percent of Mason's income. If he gets his entire income from working a 2000 hour year, then Mason will have to work about 3 more hours a year to cover this tax increase.