Interesting Reads: 1/29/2010

1.  Most Low-Wage Workers Are Cheated of Pay, Report Finds

More than half of the low-wage workers in New York City are routinely being cheated of some of the meager pay that is due them, according to a report to be released on Thursday by the National Employment Law Project.

The average worker in a low-wage job in the city lost out on $58 a week, more than $3,000 a year, because he or she was not paid minimum wage or overtime, or because of some other violation of labor laws, according to thereport [pdf]. These workers, including laundry employees, home health care aides, deliverymen and grocery baggers, would still earn less than $400 a week, on average, if they were being paid fairly, according to the report.

In all, the report estimated, more than 315,000 workers were denied some of their deserved pay, amounting to a loss of more than $18.4 million a week — nearly a billion dollars a year — to the workers, and therefore to the neighborhoods where they spend their paychecks or to the families to whom they send money....

 2. Obama Needs to Teach Americans How to Get Out of The Mess We're In, But He's Not

The President wants businesses that hire new employees this year to get $5,000 per hire, in the form of a tax credit. That will come to about $33 billion. It’s good step. He’s also supporting a cut in the capital gains tax for small businesses. That makes sense; after all, small businesses generate most jobs.

But here’s the problem. Both of these measures, and many of the other tax cuts he’s proposing, give ammunition to supply-siders who think the way out of this awful economy is simply to cut taxes on businesses. If a new jobs tax credit is a good idea, why not a cut corporate in income taxes? If it’s useful to reduce capital gains taxes for small businesses, why isn’t it useful to reduce them for all businesses?

The answer, of course, is that across-the-board supply-side tax cuts for businesses don’t increase the demand for the things businesses produce. They’re useful only to the extent businesses are confident consumers are out there, able and willing to buy. Carefully targeted — as are the cuts the President is proposing — they can give businesses an extra nudge to hire. But without adequate demand, they’re useless.

So what’s the President’s new proposal for boosting overall demand? Hmmm. Turns out, he’s not really proposing anything new on that score. (Some who watched his State of the Union the other night thought they heard him call for a second stimulus. Actually, he didn’t, and as far as I can tell he doesn’t plan to.) His political advisors are telling him to emphasize deficit reduction instead. And that’s what he did Wednesday night when he talked about a “freeze” on discretionary spending, and a “commission” to look for ways to cut the deficit...

 3. Stupidest Thing: Obamanomics: "A Fiscal Catastrophe in the Making"

If President Obama thinks the political disaster that hit his party last month in Massachusetts was bad, he had better brace himself for the Congressional Budget Office's latest economic forecasts for the next two years. In testimony before the House Budget Committee last week, which got scant news media attention, CBO Director Douglas Elmendorf painted a bleak forecast for the nation's economy under the White House's no-jobs, no-growth tax-and-spend policies. It spells even deeper political losses for the Democrats in Congress than are presently forecast.

"We are presently in a dangerously risky economic environment, more risky than any in memory and that includes the 1970s," Stanford economist John Cogan told me.

"The primary sources of that risk come from uncertainty about U.S. government economic policy. In the area of taxation, personal income taxes -- especially those on savings and capital formation -- are set to rise substantially in a year (when the Bush income tax cuts are due to expire)," Cogan said.

"How high tax rates will rise and what activities will be hit hardest creates a sizable risk this year for investors and businesses," he said.

But perhaps the most ominous forecast of what we can expect from Obamanomics comes from famed economist Arthur Laffer, whose supply-side, tax-cut proposals under President Reagan put the economy on a nearly 25-year economic-growth trajectory that pounded unemployment to its lowest level in decades...

 4. Funniest Thing: