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Two days, two violent attacks, 140+ dead Iraqi civilians.

The surge is working! Someone get Petraeus another medal.

In his first best-selling book, Downsize This!, Michael Moore made a good (if terribly oversimplified) point by comparing pictures of Flint after GM moved out with Oklahoma City after the bomb went off. Of course, the image of rubble where buildings once stood was essentially the same.

Apparently some urban areas in the U.S. feel the same way about big mortgage lenders, raising some interesting questions about responsibility for one's actions and what it means to be a menace to our society.

Cleveland, one of the most beyond-devastated inner cities in the land, is suing 21 large mortgage lenders for intentionally making loans that they knew could not be repaid. On the surface most readers' reaction would be to cry "Bullshit!" a la someone suing McDonald's over hot coffee. But the city has legitimate points. Waves of foreclosures significantly reduce Cleveland's already-pitiful property tax earnings while increasing the drain on city services (police, fire, and maintenance costs increase around abandoned homes). The glut of foreclosed homes in turn depresses the prices of housing in the surrounding areas.

For a city already on the edge, these changes can be crippling. Their schools, already among the worst and most underfunded in America, can scarcely afford to lose additional property tax revenue.

Baltimore is also joining in the fun by suing one lender (Wells Fargo) for predatory lending in poor (read: black) neighborhoods. Rates in those areas were nearly double the rates Wells Fargo peddled in other (read: not black) neighborhoods. A racial disparity in interest rates or lending practices would constitute a federal crime, of course. Again, the city's lawsuit notes the dramatic increase in the cost of caring for abandoned neighborhoods.

Unfortunately I think this is just the first step in A) an ugly economic downturn and B) a reckoning for 30 years of attempting to maintain the "American dream" of home ownership in the face of falling real wages and disappearing middle-class jobs.

Remember when Carter gave his infamous "We must lower our standard of living" speech and was practically drawn and quartered? Well, 30 years later "we" don't have to do anything – it has been done for us. When real wages don't increase and when good jobs are replaced by Wal-Mart style employment ($7/hr, no benefits, no pension) the only way to keep the dirty common folk from….well, getting pissed….is to create the illusion of wealth through credit. Sure, your wages are shrinking, but here's a couple of credit cards! That'll make up the difference. We know you'll charge more than you can pay back, but it's alright. Just make minimum payments for 30 years.

At 20%.

So too goes it with home ownership. This whole "subprime lending" fiasco was perfume attempting to cover the stench of a simple fact: most Americans can no longer expect to be able to afford a home. But in order to create the illusion that they can, it has become necessary to abandon all common sense in lending standards. The only way someone making peanuts is going to get a home is at usurious rates.

People know when their standard of living falls. What they could once afford is no longer attainable. The past decade or two have been nothing but an extended exercise in distraction. John Doe can't afford his lifestyle anymore, but banks (with complicity from the political system) are more than happy to let him charge it. Banks lend money that can't be repaid knowing that they will make even more if people keep chipping away with minimum payments. Unfortunately, as the subprime fiasco is proving on a daily basis, the house of cards collapses when even those minimum payments exceed the capacity of a nation's stagnant or falling wages to pay.

Before I talk in significant depth about Mike Huckabee's "FairTax" – the latest branding of the conservative wet dream of a National Sales Tax "replacing" the IRS – let me give you a quick introduction to what kind of shady fuckers we are dealing with. Huckabee claims that the sales tax rate would be 23%, but it's 30 cents on the dollar. How is that 23%? Well, 30 cents is 23% of $1.30, which is the cost of a $1 purchase after the tax is added.

They are calculating the tax rate as a percentage of the cost with the tax included. Because 23% sounds a lot less intimidating than 30%, which is what 30 cents on a dollar is the last time I checked.
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I believe that his championing of the "FairTax" says more about who Huckabee is than anything else. And make no mistake, he is a pandering, lousy politician who happens to be right of William F. Buckley on essentially everything. The ask-no-questions, read-the-press-release-into-the-camera media bought heavily into his effort to sell himself as a moderate, but the reality is that he's a Baptist preacher with no foreign policy knowledge and economic ideas that consign most Republicans to the loony fringe.

The idea of "scrapping the IRS" has inherent appeal, and people like Huckabee know it. Never too proud to pander, they beat on the IRS straw man every time they start to slip. The idea of scrapping it in favor of something called the "FairTax" is almost too cynical to measure. Like a person who introduces a statement with "I'm not a racist…" is inevitably about to say something really racist, calling something "FairTax" is the finest possible indication that it is really, really unfair.

The national sales tax is the kind of issue that used to separate the contenders from the fringe in the GOP. You could expect to hear it once every four years from the likes of Phil Gramm, Jack Kemp, or some other Why Is This Guy Running case. That a leading contender like Huckabee is pitching it in 2008 shows you just how far our political discourse has shifted to the right. Why is it not a more mainstream idea? Getting rid of the IRS sounds awesome, right?

Sales tax revenues are both wildly unpredictable and severely regressive. The more money you make, the smaller percentage of it you pay in sales tax. And in any given year, the amount of tax revenue will depend on how much people decide to spend. So the challenge of mainstreaming such a bizarre idea is to make it "fair" to the poor and revenue-neutral compared to the current system.

In the contemporary example, the FairTax gives a "prebate" – a check for a couple of grand per year – to each household to offset the taxes they pay on the first $20,000 of income/spending. Not only does this require the government to front half a trillion in cash each year, but who exactly is going to take care of this? There's no IRS, after all. Well Huckabee proposes that the "United States Fair Tax Federal Revenue Administration and State Tax Authority Reconciliation Service" will handle the bureaucratic side of things. Does that sound like a small, efficient organization? Does keeping track of how much money is being mailed to whom every year sound like a simple job? No, what Mike Huckabee is disingenuously promising is to give the IRS a new name. That's helpful.

Second, the fine print on the FairTax notes that 30% (oops, I mean 23%) is the minimum rate that will be required. The Brookings Institute estimates that a revenue-neutral rate based on 8 years of Bush spending would be 44% whereas the Joint Congressional Committee on Taxation estimates 57%. The group's estimate of 30% (sorry, 23%) assumes massive reductions in federal spending – in the midst of a $200 million per day war. And these estimates are before the "exemptions" that would inevitably follow for things like home mortgages.

Let's play along for a second and pretend that it's revenue-neutral at something like 40%. So we enact the new plan. If it's revenue-neutral and doesn't require appreciably less bureaucracy than the current system, what the hell is the point of making the change? It's simple – people under $30k pay nothing in taxes, those between $30-$100k get a tax hike, and those making six figures get an enormous tax break. Families that spend most of their income (i.e. the poor and middle class) will part with more of their money than before, whereas earners who save/invest a lot will pay not a penny on that income.

Mike Huckabee has gotten a great big pass on this. Can you even imagine what would happen if a Democrat proposed a plan that would raise taxes on incomes between $30k and $100k to forty or fifty percent?

Here's another happy reminder of how Great the Greatest Story Never Told economy truly is.

Creative free-market types that we are, Americans are finding a clever way out of the whole home mortgage crisis: arson. Or, as my ethnic-slur-a-minute high school community called it, "Greek Lightning.
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" I think the classic form of the joke was two Greek guys standing in the kitchen of a gyros stand saying "Remember, no work tomorrow – fire in kitchen tonight.

"

I'm experiencing a slight New Hampshire hangover (metaphorical) and a wicked bout of the flu (not metaphorical).

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Sorry, today's a quickie. The bitchin' stuff I had planned for this week will wait until next. Tease.

A few weeks ago I exhorted you to bust out the TiVO and record some evidence of the Fox Business Network's existence before it's too late. It didn't exactly take the Amazing Kreskin to predict that network's inevitable failure, but I would never have predicted it would be this bad: the network is averaging about 6000 viewers during the day (you know, when the markets are open). To put that in context, FBN, which has no doubt cost News Corp some amount in the 8-figure range thus far, has about twice as many viewers as ginandtacos (cost: $7 per month).

Please note: this website's traffic is certainly nothing to brag about.

But, hey, it's within striking distance of Rupert Murdoch's latest ratings poision!
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I'm going to sleep well tonight.

So this figures to be a very late night, but I'll give NH its moment.

After all, the world only gives a shit about it for a couple weeks (and one big night) every four years. One thing is true, and not just media hype: thus far, this is a primary season unlike any other. It's enough to make someone as lame as me really excited. Here are some ideas, feel free to add your own alongside your reactions.

1. I had some serious doubts about Fred Thompson's viability, but I'm not going to pretend that I thought he'd be this bad. I'm past pointing out the obvious (he's finished) and now I'm simply marveling at the historical shittiness of his stillborn campaign. Remember when all those right-wingers were so excited about him? Good times.

2. Hillary Clinton has really dug in her heels and made a stand. Can anyone be optimistic about her odds, though? After she gets her ass handed to her in South Carolina (and probably Nevada) she will be, at best, 1-for-4 in January. Assuming she hangs on tonight, is having a narrow win over Obama in New England really an inspiring accomplishment for hat-hanging? This is a state in which she should be cruising. Instead it's 10:30 PM and she's sweating it out. Kudos to her for her victory, but I can't say it inspires confidence.

3. Giuliani is pathetic. Despite his repeated insistence that he wasn't trying to win the early races (a dubious strategy in any case) he spent more than almost any other candidate – $3 million plus. And he's duking out 4th place with Crazy Uncle Ron Paul's circus sideshow. When you're neck-and-neck with the joke candidate, things are not going well for you.

4. This story does an excellent job of illustrating how little public opinion polling is worth.

5. Mike Huckabee did better than I thought – he cracked the top 3 – but it's fairly obvious how limited his appeal is outside of Jesusland. If, as I suspect, this is McCain's high point (a la 2000), I still think that Romney is well-positioned. The commentators are speaking of him in dire terms, but the guy has a shitload of money and is the middle ground between the religious zealot and the 71 year-old war cheerleader.

6. Almost 60% of the voters in New Hampshire took Democratic ballots. That's two straight lopsided margins in favor of the Democrats. It will be very interesting to see how this shakes out in SC.

7. If Edwards is serious about refusing to exit the race prior to the convention, he's A) delusional and B) going to do significant harm to Obama.

Things feel very unclear at the moment, and I suspect that anyone who argues otherwise is lying.
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