Are oil and gasoline prices being manipulated to create inflated profits? It’s easy enough to find out, maverick energy economist Robert McCullough told Congress Tuesday.

It’s also easy for our government to adopt temporary policies that will lower costs at the pump by:

• Ripping the dark veneer off opaque market
• Creating incentives for more drilling in the short run
• Taxing away any windfall profits

McCullough is a super smart and jolly old man who runs his own energy economics consulting firm in Portland, Ore.

He is hated by the energy and utility industries because his reports cut through the fog of economics and provide clear, understandable insights into the many ways the energy industries manipulate markets and politicians for their gain. And he is big on market incentives to make markets efficient and open.

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The most effective policy to curb Russian aggression in Ukraine is to displace Putin’s oil exports with enhanced U.S. production while protecting U.S. consumers from unnecessary price increases at the pump.”

There is good reason for our federal government to exercise its authority to help citizens cope with the surge in gasoline prices, which soared 38% since last March. That combined with increased travel as the pandemic wanes means that spending on gasoline has increased 44% in the last 12 months.

McCullough’s testimony is the kind of deeply informed plain talk that seldom makes the news or congressional hearings. Instead, self-serving industry talking points infect public discussion of energy markets, just as nonsense about “freak accidents” infects news coverage of worker deaths on the job as we reported this week.

Sen. Maria Cantwell of Washington, the Democrat who leads the committee, is trying to show ways that our government can mitigate the impact of Putin’s war on energy prices through smarter regulatory policies.

That’s a difficult task in the Congress where the word regulation is treated as if it had only four letters by politicians who mouth ill-informed nonsense about market economics and promote corporate socialism policies that enhance profits and damage the overall economy, largely by draining money out of consumer pockets.

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What follows is a summary of McCullough’s testimony, edited to remove technical details. All ideas are his.

McCullough told the Senate Commerce, Science and Transportation Committee to focus on three areas: transparency, drilling and windfall taxes.

The first can prevent rigged markets that artificially inflate prices.

The second will temporarily increase oil extraction, which can be done through the carrot of incentives.

The third is a stick to beat windfall profits out of the system, making price gouging pointless.

1. Transparency

Making oil and gasoline markets transparent “is the least expensive and most effective tool in guaranteeing efficient markets.” These markets in the United States are “vastly less transparent than competing fuels like electricity and natural gas.”

Requiring disclosure of oil and gasoline trades, just as it’s required for other commodities, is an inexpensive and effective way to expose price manipulations. Creating “a database of wholesale transactions for oil and gasoline similar to [the existing] database for electricity is critical to discourage anomalous trading.”

Requiring wholesale traders to report transactions should help with the well-known “up like a rocket, down like a feather” changes in gasoline prices that don’t closely track oil market prices.

California is “prone to mysterious price excursions. In the second week of March, as oil and gasoline prices fell across the U.S., California’s gasoline prices continued to increase. There is some evidence that trades which caused this increase” were rigged.

2. Drilling

Because no one knows how long Putin’s war will last it makes little to no sense for oil drilling entrepreneurs to deploy hundreds of idle drilling rigs to pump more oil. But there’s an easy way to turn this into a smart move.

“The federal government’s existing oil inventory could be loaned, rather than sold, into the market. The loan would be repaid with federal contracts to buy oil in the future, thus smoothing prices for small drilling companies and ensuring that a sudden unexpected end to the war would not ruin their finances.”

President Joe Biden has taken some steps in this direction by releasing oil from the national petroleum reserve.

That oil should “be with purchases of crude in West Texas Intermediate forward markets [which] will expand liquidity and provide broad incentives for additional production in the Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville and Permian basins:

Despite the Russian invasion that began Feb. 24 the number of active American oil drilling rigs since then has risen by just 11 to 533. Three times that many oil rigs are idle.

The Biden administration has been warning for a year that Russia would attack Ukraine. In the past 12 months the spot price of oil has gone from about $60 a barrel it’s about $108 a barrel. Huge price spikes like that typically invite more drilling, but not this time because of uncertainty about how long the Russian war and sanctions on the Russian economy will persist.

Most drillers will maximize profits by staying home and selling their existing crude oil flows into the spot markets. If they spend money to drill anew or to re-open capped wells, that will cost money while also tending to drive prices down. That’s why the entrepreneurial drillers are pulling more black gold out of the ground.

DCReport believes them McCullough plan to loan oil from our government’s strategic petroleum reserve into the market and then pay it back with guaranteed purchases of future oil production would be a smart and economically efficient way to use incentives to lower the price of gasoline at the pump.

3. Windfall Profits Tax

Gasoline prices and oil industry profits this year “are going to be enormous.”

To discourage price gouging and blunt incentives to limit oil production, Congress should introduce a windfall profits tax. That is a concept long understood in economics and in tax policy to discourage harmful economic behavior by eliminating incentives to cheat and artificially inflate consumer prices.

Congress should combine a windfall tax on oil company profits due to the war in Ukraine with a tax credit to those firms which expand oil production. That in turn would help lower prices at the pump.

Such a carrot-and-stick approach could produce tremendous public benefits, but almost certainly would be attacked by know-nothing lawmakers as harmful to the oil industry, one of the biggest financiers of political campaigns in America.

Public perceptions

While Russia is the world’s largest oil exporter, and efforts to shrink those exports will drive prices upward, the United States does not need to suffer significantly from economic pressure designed to persuade Putin to withdraw from Ukraine.

“Public perceptions of the United States and its energy balance have lagged behind market developments.” Glib newscasters report America is being held hostage by foreign oil producers, including Russia.

“In reality, the United States is now roughly able to supply its own requirements and is not in any risk of reliving the painful days of the 1973 oil boycott.”

Expanding American exports of liquefied natural gas would link domestic energy prices paid by consumers more closely to world markets, an issue rarely if ever mentioned by those politicians promoting the mindless mantra of drill, baby, drill.

The most effective policy to curb Russian aggression in Ukraine is to displace Putin’s oil exports with enhanced U.S. production while protecting U.S. consumers from unnecessary price increases at the pump. There are dumb ways to do that and smart ones.

Like McCullough, DCReport favors smart.

Let’s step back for a moment from the awful human tragedy in Ukraine as the Russian army targets civilians. There is an even bigger issue here. And until we come up with an answer it’s going to continue to plague the world.

It’s an issue that Americans, more than anyone else, should understand. Yet based on all the news and commentary I’ve been reading since the Russian buildup began almost a year ago, this overarching issue is not even on the table.

The bigger issue is that there is no way to stop a nuclear power from invading a non-nuclear power, as America did 18 years ago this month when it took down the dictatorship in Iraq.

And make no mistake, Vladimir Putin himself has long made clear that Ukraine is not the only country he intends to take over.

Three years ago I spent a week in Ukraine. Every person to whom I spoke, whether in a formal interview or casual conversation, said that Putin was going to invade their country.

Many of them expected an invasion while Donald Trump was in office. That made sense because Trump repeatedly declared his trust in and fealty to Putin, denounced American intelligence agencies saying he did not trust them and lambasted our NATO allies. Destabilizing and, if possible, shuttering NATO is a long-term stated goal of the modern Russian tsar, as foreign affairs columnist Trudy Rubin explained recently.

Putin, whose words I have carefully read for two decades, doesn’t plan to stop with Ukraine. He has called the collapse of the old Soviet Union the worst geopolitical disaster of the 20th century and has said he is determined to put it back together. His words:

“Above all, we should acknowledge that the collapse of the Soviet Union was a major geopolitical disaster of the century. As for the Russian nation, it became a genuine drama. Tens of millions of our co-citizens and co-patriots found themselves outside Russian territory.

“Moreover, the epidemic of disintegration infected Russia itself.”

Fear in The Baltics

For more than a decade the political leaders of the Baltic states – Estonia, Latvia and Lithuania – have been telling every visiting journalist willing to listen that sooner or later they expect Russian tanks to overrun their countries.

I have family, via a son’s marriage, in Slovakia. They fear that Russian tanks will come, though they know not when; anxieties deepened mightily by the invasion of Ukraine.

We don’t need to worry about Moscow and Washington wiping each other out with atomic bombs.

What kept the rivalry between Washington and Moscow a Cold War, what kept either from launching nuclear ballistic missiles, was the concept of MAD – Mutually Assured Destruction.

That idea was articulated in a 1962 speech by Robert McNamara, the former Ford Motor chief executive whose hubris was unbounded. He believed that his team could use math, logic and aerial bombing to defeat the Vietnamese who wanted to be free of Chinese, French, Americans or any other oppressor. Never mind that post-World War II studies showed bombing can disrupt war material manufacturing and sow fear, but that’s pretty much all. Its overall effectiveness is disputable in a largely agrarian society. The old Soviet called Ukraine “The Ukraine” and Russia’s breadbasket.

While we may yet see a limited nuclear war using small battlefield nuclear bombs, all-out nuclear war would leave the world with nothing but ashes and an aftermath of deadly radiation.

MAD doesn’t mean that two nuclear powers will never confront one another on the battlefield. We have seen, for example, repeated skirmishes between troops in Kashmir, parts of which are disputed territory claimed by two nuclear powers, India and Pakistan. But neither New Delhi nor Islamabad is likely to risk losing their capital city to nukes over parts of a region about the size of Minnesota or Utah.

That said, MAD doesn’t apply when a nuclear power attacks a non-nuclear power.

That few people grasp this is evident in all the silly talk by politicians and pundits about creating a no-fly zone over Ukraine to take away invading Russia’s air power advantage. Indeed, such talk perfectly illustrates the impotent options for stopping an invading nuclear power from seizing any non-nuclear country.

No-Fly Zone Nonsense

The no-fly zone notion also shows a widespread lack of critical thinking skills in America.

Creating a no-fly zone starts with taking out radar, rocket launchers and other military equipment that would pose a threat to patrolling military planes needed to enforce the no-fly zone.

Even without putting a single jet fighter or reconnaissance plane in the air to make sure Russia could not use Ukrainian airspace we would be at war with Russia.

This is no small matter. Russia holds almost half of the world’s nuclear weapons, an estimated 6,257 out of 13,080.

In 2014, during his invasion of Ukrainian Crimea, Putin denied that he deployed “little green men” whose military uniforms lacked insignia. After his forces took control, giving Russia a warm-water port, Putin laughed that of course those were his soldiers.

When then-President Barack Obama and other Western leaders spoke of Putin’s invasion of Crimea being wrong, the modern tsar upped the ante. Putin threatened the use of nuclear weapons. “It’s best not to mess with us,” he declared.

Only so long as Russia does not confront conventional forces from NATO, with its nuclear weaponry in reserve, there is little danger that Putin would turn to The Bomb.

It is important, however, to know that almost a third of Putin’s nukes are battlefield-sized weapons, smaller bombs to take out battalions comprised of hundreds of soldiers, not cities. Only a fool would rule out Putin launching small tactical nuclear weapons if for no other reason than to terrorize people and make clear the depth of his determination to rule, as Stalin, did over a vast empire that includes some countries that today are free from Russian domination.

Satellites Join NATO

Some of these former Russian satellites are not only free, but they also joined NATO. Among them: Bulgaria, the Czech Republic, Hungary, Poland and Slovakia.

Putin says NATO is the aggressor against Russia. For sure it’s unnerving for NATO to exist if you are in Putin’s shoes. Imagine if the oceans surrounding us, Canada and Mexico were all Russian satellites in a military alliance to contain the United States. But there’s zero evidence the West plans to invade Russia or any other country.

Putin points to the NATO intervention against Serbia in the war in the Bosnian war (or as our managing editor used to say, the war in Bosnia-Schizophrenia). But NATO didn’t start that conflict with its ethnic cleansing, it just stepped in to stop it.

So how to address nuclear powers invading non-nuclear ones?

One obvious solution – an atrocious one – would be to make every country a nuclear power.

That’s crazy. Corrupt military officers or a revolt could put the bomb in the hands of terrorists, religious zealots, criminals or just plain crazy people. Hollywood has long played with this terrible idea in films from The Peacemaker in 1997 to several of the James Bond fantasies.

It Starts With Lies

Invasions by nuclear powers start with lies, palpable lies that deceive because they come with a patina of truth, making them easy to fob off on those without critical thinking skills and the politicians who live in fear of losing their grip on power.

Both America’s Iraq invasion and Russia’s Ukrainian invasion of choice were based on calculated lies.

The George W. Bush administration ginned up tales of Iraqi weapons of mass destruction, persuading many gullible politicians and journalists.

When George W. Bush warned that Iraq had nuclear weapons the statements were palpably false. Besides, if Saddam Hussein had them we would have known.

A Radioactive Cat

As far back as the 1984 Olympics in Los Angeles, I wrote about how incredibly sensitive nuclear detection equipment would spot any effort to slip a nuclear bomb into Southern California. The entire Southern California region was mapped for radiation levels before and during the games. (My story on which buildings nuclear arms experts said would be the prime targets for a Russian nuclear attack in Southern California, to run as a map overlay on a two-page map of the games venues, was killed by spineless Los Angeles Times editors.)

In 2008, the Seattle Times reported that a car returning from Canada at 70 mph was stopped after a border agent, parked in the freeway median, detected nuclear isotopes. What the agent found was a cat treated for cancer three days earlier with radiation.

So, without a doubt, if Iraq had possessed nukes, we would have known. Ditto the baseless insistence by the younger Bush administration that Iraq had created and amassed biological weapons which a demonstrably gullible reporter turned into worldwide news.

The official British inquiry into the Iraq invasion, known as the Chilcot Report, is devastating in its detailing of the lies, miscalculations and self-delusions that preceded the invasion.

I recommend reading Pages 40 – 62 of the Executive Summary (the full report runs 530 pages). It also shows how invading Iraq decreased stability and put Britons and others at greater risk of terrorist attacks by pointlessly fostering hatred of the invading allied nations.

In this same vein of official lying to justify the unjustifiable, Putin and his cronies tell the Russian people that the invasion is to defend Mother Russia from attack and to remove modern Nazis from the Kyiv government.

Putin’s Nazi Nonsense

What Russian state media – Putin has shut independent news – don’t tell people is that the elected president of Ukraine, Volodymyr Zelenskyy is a Jew.

To be sure, there certainly are very far right-wing elements in Ukraine, just as there are neo-Nazis in the United States and many other countries. But to claim that Nazis or their modern ideological descendants control Ukraine is absurd. Pardon me while I take a moment to laugh out loud.

It’s also astonishing how few news reports and comments by elected officials note that eight years ago the Ukrainian people rose up and deposed a Putin puppet who had been stealing hundreds of millions of dollars from the public treasury. Its known as the Orange Revolution.

The deposed Russian puppet built a lavish palace where before fleeing his staff dumped incriminating documents. Recovered ledgers showed payments totaling tens of millions of dollars to Paul Manafort, who later became Donald Trump’s 2016 campaign manager. The 2016 Republican National Convention gutted its former stance and adopted Russian perspectives on Ukraine at Manafort’s and Trump’s urging.

GOP Drops Kremlin Skepticism

Before Trump, Republicans were ferocious critics of Kremlin behavior. In the 1950s they conducted official hunts for Reds hiding under beds and working at the State Department and Pentagon.

Now Trump and many Republicans side with Moscow. So does Fox News’s Tucker “I’m rooting for Russia” Carlson, the No.1 cable host in America. Carlson is trying to walk back his comments, but what I hear each night is just nuanced pro-Kremlin chatter.

Also missing in our national discussion is the Ukrainian diaspora. Under the old Soviet Union, millions of Russians were forced to move into Ukraine, diluting the local ethnic population. Before the invasion more than one in six Ukraine residents was Russian. Also, a few decades ago Ukraine had a population of more than 50 million, but today only about 40 million.

As Ukrainians flee for their lives that ratio will rise. Putin will no doubt tout future census numbers to support his nonsense claim that Ukraine is part of Russia, a subordinate part.

Kyiv Ancient Unlike Moscow

Kyiv was a thriving city a millennia ago. Back then Moscow was a wide place in the forest with a few huts. There’s a strong case for saying Kyiv is the mother of Russia, but not the other way around as Putin insists.

So how is the world to deal with invasions of non-nuclear countries by nuclear powers? I don’t have an answer, but I do have a suggestion: We need to study and devise a new global doctrine to address this menace.

And I suggest using my imaginary analytical friend, the Cosmic Journalist, to analyze the issue.

The Cosmic Journalist, coming here from another planet, can be clear-eyed. This tool for inquiry can appreciate that Putin feels contained by America, with its oceans on each side. U.S. allies simultaneously recognize that Putin’s disappointment at the collapse of the Soviet Union is no grounds for invading other countries.

Featured Image: Pixabay

NOW WATCH: Fox News reporter pushes back when host Greg Gutfeld accuses media of ginning up 'emotional' Ukraine reaction

Fox News reporter pushes back when Gutfeld accuses media of ginning up 'emotional' Ukraine reactionwww.youtube.com

How much would you be willing to invest for a better future for yourself, for today's youngsters, and beyond?

Would you be willing to invest $3 a day?

That's more than the gross upfront cost of President Joe Biden's human infrastructure bill.

Sadly, but that's not how news reports describe the American Families Plan. Across the board, our major news organizations cite a big, scary, and ultimately meaningless number: $3.5 trillion.

To grasp what a huge and meaningless number that is, imagine putting matches to dollars bills. If you lit one greenback per second it would take 110,985 years to burn all that money.

Folks who make at least $100,000 per day would bear 86% of the cost of Biden's human infrastructure plan.

But the Biden plan money won't be consumed; it will be invested.

When our Air Force planes and Navy ships burn kerosene and marine diesel fuel, tax dollars used to buy that fuel are shot out as exhaust. That's tax dollars consumed.

Biden's plan adds value, making each dollar invested today worth more dollars in the future by increasing incomes, creating private-sector jobs, increasing more business profits, and raising more tax dollars as the economy grows.

Human Scale v. Big Scary Numbers

At DCReport, we try to make numbers human scale. That means we start with the big scary and incomprehensible $3.5 trillion gross cost and divide by ten because the money would be spent over a decade.

Next, we divide the $350 billion per year by 332.8 million Americans as of this writing. Then we divide that by 365 days to get $2.88 per day per American ($11.52 for the iconic family of four).

And how much is $2.88? It was less than the average price of a cup of coffee back in 2019. Gourmet coffee shops that year charged on average $4.24 per cup.

Most Would Pay Nothing

Now the best news: that $2.88 per day won't cost you a penny if you make less than $165,600, analysis by the Tax Policy Center shows. Years of experience have demonstrated that its computer model reliably forecasts the costs and benefits of tax policy changes.

Biden's plan would reduce federal taxes for eight out of ten households. The poorest 48 million households would pay $620 less in taxes. That means the poorest Americans would enjoy a 4% increase in their after-tax income. That's the equivalent of two extra weeks of pay each year.

Families making $91,800 to $165,600 would pay on average $120 less in federal taxes. Not much, but also not a tax increase.

Now consider people on the 80^th to 89^th rungs of the income ladder, people who make $165,600 to $243,000 in total income. Their taxes would go up, but by just $420 on average, less than half the price of a cup of coffee.

The Richest Pay

The burden for the Biden human infrastructure plan would fall overwhelmingly on the 120,000 highest income households in America, people whose annual income ranges from $3.6 million to several billion dollars annually.

The folks who make at least $100,000 per day would bear 86% of the cost of Biden's human infrastructure plan. They were also the primary beneficiaries of the Trump 2017 tax cuts, repeating a quarter of the tax savings. This is more like a take back of a tax favor financed with borrowed money than a tax increase.

Yes, we have Americans whose annual income is in the billions of dollars. One example: Larry Ellison collects almost $1.8 billion a year in dividends from Oracle, the company he launched in 1977 with a federal government contract. And that's far from all of Ellison's income.

How the Richest Benefit

The top one in a thousand households would also reap huge benefits from the Biden human infrastructure plan, making them even wealthier over time.

The richest among us would benefit because investing in a better educated, more productive workforce not burdened by student debt, which holds back the formation of families, home buying, and all the spending that goes with furnishing and setting up a family domicile.

A more productive workforce with more after-tax income means the vast majority would have more money to spend on the goods and services offered by the wealthiest families and the businesses they own, control, or invest in. Voila, government policy that helps the many also makes the already rich richer while making the creation of new riches more likely.

How Most Americans Benefit

My life is an example of how taxpayer investments in citizens more than pay for themselves. The $8,960 that federal taxpayers invested in my college and postgraduate education over seven years under the War Orphans Educational Assistance Act has been paid back many times over in federal income taxes. Indeed, the inflation-adjusted value of that taxpayer investment in me was paid back in full just from taxes on royalties from Perfectly Legal, the first book in my award-winning trilogy on the American economy.

More broadly, one of the smartest if not the smartest federal investment ever was the GI Bill, officially the Servicemen's Readjustment Act of 1944. The GI Bill is what enabled a Seattle grocer's son named Bill Gates to become a lawyer and, in turn, give his son the money that launched Microsoft with jobs that poured money into federal coffers.

The GI Bill doubled the number of college degree holders in ten years and resulted in more education, higher incomes, and less poverty. And this was despite the racist and sexist details of the GI Bill that kept many Black Americans and women who served from participating. The Biden plan has no such barriers, though once enacted, DCReport will scrutinize the final legislation looking for any subtle discriminatory features that Congress may slip in.

When Republicans and a handful of Democrats declare that they will vote against the American Families Plan, here is what they are really saying: you should pay higher taxes; you should not get as much in benefits as you could for those taxes; you should pay higher prices for prescription drugs; you should endure more medical bills; you should have your pockets drained to pay for childcare and eldercare.

Irrational Tax Hatred

And why? Because the ideological and irrational anti-tax crowd, which denounce all new taxes as bad, wants to ensure that the already best-off Americans can have more now instead of the more prosperous future that we could all enjoy.

We would be a poor country today but for massive taxpayer investments in the future like the GI Bill and the related War Orphans Act. The way to think about human infrastructure is that it's not spending, like those fossil fuels consumed by military planes and ships, but an investment in a better and all around wealthier American future.

At a gross cost of $2.88 per day, the American Families Plan is a bargain. At a net cost of less than zero only fools would say no.

The overwhelming rejection of the effort to recall California Governor Gavin Newsom is a powerful message for those Republicans who think their future lies with Donald Trump and Trumpism. It doesn't.

The vote was roughly 2-to-1 against the recall. That's a landslide by any measure. Indeed, when the results are certified, Newsom may have beaten the recall by a larger margin than his 2018 victory in the gubernatorial race.

For Republicans who backed the recall, that's a clear repudiation. And what makes it even more significant is that Newsom did some things as governor that stirred anger and resentment.

What made Newsom especially vulnerable was his arrogant and foolish decision during the pandemic last year to have dinner in a Napa Valley French restaurant without a mask. He violated other Covid protocols as well even though he had issued a severe mask-up order that some restaurant owners say was too harsh and killed their enterprises.

"Do as I say and not as I do" has ended the careers of more than a few politicians, yet Newsom is coming out of the recall much stronger than ever.

When the final votes are counted, the share of ballots favoring recall is likely to be smaller than the share of California ballots for Trump over Joe Biden in 2020. Ouch, if you're a Trumpublican.

That's a clear sign that Trump's influence is waning -- especially since Trump weighed in to support the recall.

The next few days will be filled with Trumpian complaints that the election was rigged, no matter the lack of evidence. Baseless claims will fool some people, but over time they just become the pathetic whining of losers like Trump. Baseless claims don't attract more voters, which is Politics 101.

The week before the election, Trump said the election was rigged for Newsom. He reiterated that on election day.

Larry Elder, the leading Trumper seeking to replace Newsom, posted assertions that the official vote results were fraud and statistical analysis proved it.

That's a remarkable claim to make before any vote results are known and before the election ends – unless you just make stuff up.

Elder is a longtime fixture in the Los Angeles radio market.

Elder is a true red Trumper who spouts crazy, illogical,half-baked, fact-free, absurd and downright offensive ideas, sometimes contradicting himself just the way his hero Donald Trump does.

Facts are to Elder just as they are to Trump: they don't matter. Like Trump, Elder creates his own reality.

Among the craziest things Elder has proposed are reparations for slave owners because their "property" was taken away after the Civil War.

Elder's campaign made clear that he intended to govern California in pure Trumpian style, by Tweet rather than substance. That also alarmed voters in a state whose economy is heavily based on science. Indeed, even the Hollywood fantasy machine relies on science to churn out films, television shows and video games.

Most Californians had never heard of Elder.

As word about Elder's jumbled, racist, misogynistic, anti-science and extreme anti-abortion beliefs got traction among Californians who had never listened to his radio rants, alarm bells started to go off. And not just among Democrats. Business leaders were also worried. And that caused voter turnout to soar.

Trumpism can't grow and regain power when all its got are made up tales of vote fraud. California voters just proved it by overwhelming margins at the polls.

"Disappointing" is all over the news Friday about the August jobs report. The economy added 235,000 jobs as covid made a big comeback, especially in Southern states where governors spurn science and people stayed away from bars, restaurants, and shopping malls.

Most of these news reports note lacked context about how rare it is to add that many jobs in a month. Most of the reports I read also failed to note that under President Joe Biden jobs are growing at more than triple the rate under Trump before the pandemic began.

Overall, the American economy is growing even faster than the 6% that Trump promised voters. Prepandemic, Trump delivered barely half that growth rate.

July was excellent with more than a million jobs added. In June, the economy added 962,000 jobs. That makes the August number seem small, but only by very short-term comparison.

Under President Biden, the economy has added an average of 636,000 jobs per month, the federal Bureau of Labor Statistics "all employees" report CES0000000001 shows. That's close to 4.5 million jobs added since Biden became president on Jan. 20.

On Donald Trump's watch – before the pandemic – the economy added only 188,000 jobs per month. President Obama did better than that once the collapsing economy he inherited turned around in early 2010, adding more than 200,000 jobs per month on average.

Genuinely awful

Looking at Trump's entire time in office, his jobs performance was genuinely awful. On Trump's watch, the economy lost an average of 2.8 million jobs per month. That's primarily because in March and April of 2020 the economy lost 22.4 million jobs.

Since Ronald Reagan assumed office four decades ago, only one president has added an average of more than 235,000 jobs a month. That was Bill Clinton. During Clinton's eight years, the economy added an average of 242,000 jobs per month.

Clinton did even better than those figures suggest because there were about 62 million fewer Americans on his watch. Adjust for that smaller population and the Clinton economy added the equivalent of about 297,000 jobs per month with today's population of 333.3 million people.

In August, the economy added 37,000 manufacturing jobs. Under Trump 1,800 more factories closed. Thousands of factory workers lost their jobs, primarily because of his disastrous and ill-informed tariffs.

The most interesting August job developments were in the delivery of goods compared to the traditional retail trade and in services like bars and restaurants.

Jobs in transportation and warehousing, which benefit from the home delivery of products, grew by 53,000 and brought the total to a modestly new high with 22,000 more such jobs than before the pandemic.

Retail employment – thinks clerks at malls – declined, with 29,000 fewer jobs in August and 285,000 fewer than in February 2020, before the pandemic.

Bars and restaurants shed 42,000 workers, evidently because fear of coronavirus infection is keeping more people at home. That number may worsen in the months ahead as the anti-vaxxers, sheep worm remedy users, and mask refusers spread more gratuitous disease and death.

Trump Faltering in 2019

The Trump economy was faltering even before the pandemic, as I reported here citing official government data. Trump's overall economic performance was subpar, as I detailed from official government data in April 2019 when I gave Trumpa grade of C for economic performance.

Candidate Trump repeatedly said he would produce 6% annual economic growth. He only got above 4% for one quarter. Even that was only because businesses stepped up purchases ahead of his disastrous tariffs.

After three years in office, economic growth under Trump was worse than every other president after Harry Truman except for George H.W. Bush.

Under Biden, the economy grew at a 6.5% annual rate from April through June, the second quarter of this year. the Congressional Budget Office estimates that "real GDP will grow by 7.4 percent in calendar year 2021."

Happy Go Magic Land

Many Trump fans refuse to accept that Trump was bad for the economy and jobs even before the pandemic. These Trumpers seek solace in the childish fantasy world of Happy Go Magic Land.

And don't forget, Trump ran in 2016 promising to pay off the entire federal debt in eight years. Instead, during his four years, it grew and grew, in good part to finance tax cuts for the wealthiest Americans and large corporations.

So read the 235,000 jobs added in context. It's a sharp fall from June and July, but that's mainly due to covid making a comeback in states headed by Republican governors who deny science and thus kill their own citizens.

Viewed in context, the 235,000 jobs created in August are a clear positive for America.

Donald Trump's influence is melting like a snowball left on the kitchen table.

In a special election to replace a Texas congressman who died, voters rejected Donald Trump's chosen candidate, the widow Susan Wright.

Instead, Texas voters in the Sixth Congressional District located southeast of the Dallas-Ft. Worth metro area picked Jake Ellzey, a conservative state representative. Ellzey got 53.3% of the vote; Wright 46.7%, out of fewer than 40,000 ballots cast.

Unlike the widow, who ran what can barely be called a campaign and proved weak at raising money, Ellzey proved to be an effective campaigner and political fundraiser.

Ellzey never criticized Trump. Had he done that and then won, I'd tell you that snowball was melting on a hot stove.

But Ellzey did have to contend with opposition by the perfidious junior senator from the Lone Star state, Ted Cruz, and the Club for Growth, which claims to be conservative but which exists to ensure that little people are more heavily taxed than the already rich. That Cruz, a servile Trumper, backed the wrong candidate suggests that his never strong standing with Texas voters is also dwindling.

This week's election results show yet again what a terrible choice Republican leaders made after Trump's failed coup in January. The insurrection, a clown show attempted coup, gave them the option to denounce Trump, to walk away from the crazy old man from Mar-a-Lago who tried to overthrow our government.

The Republican leaders are akin to the fools who received stock options during the dot con era at the turn of the century but failed to exercise them because they foolishly believed their options would become even more valuable but instead turned to dross.

Politics, it's often noted, is the art of the possible. The current Republican leadership has pretty much made it impossible to separate itself from Trump, a decaying albatross they chose to hang around their collective necks.

True believers continue to think of Trump as a demigod, lost in denial of his delusions, lies, and incompetence in accomplishing what he promised voters in his first campaign.

At a multi-racial ice cream social on Sunday, a friend told me that one of his sisters, who has an advanced degree, says Trump is literally a god.

It was far from the first time I heard such nonsense – blasphemous to any religious believer – but it was the first time anyone told me that a person with a first-rate education embraces such craziness. That shows how much this is about emotions, not rational thinking.

Sadly, few people know that while Trump claims to be a staunch Christian who reads the Bible more than anyone, his words show that he holds Christians in utter contempt. He went on for page after page in his Think Big book, denouncing those who accept Jesus's teaching in the Sermon on the Mount as "fools," "idiots," and "schmucks."

Unless you believe most Americans are damn fools, support for Trump will continue to dwindle.

That's a good thing for democracy in America. Our Constitution embraces Enlightenment principles of freedom rooted in rationality and reason, not cultish devotion to a wannabe dictator, especially one as incompetent as Trump and his gang.

As Trump continues his descent into madness and frets about his pending indictments, we should hope that the Republican leaders hold fast in their foolish embrace of Trump. Sticking by their awful decision after the Jan. 6 insurrection establishes they are knowingly evil in submitting to Trump and his anti-American desire to become our dictator. That submissiveness should reduce their numbers in Congress.

Let us hope that actual Republicans with some principles arise to defeat the faux Republicans who put Trump ahead of their oath to defend our Constitution. Otherwise, we will continue to suffer from those who, like Cruz and the Senate and House minority leaders, show allegiance to the criminal mind of Donald J. Trump.

In an astonishing admission, Donald Trump said Thursday that instead of hiring only "the best people," as he promised voters, he hired "garbage."

Trump also complained Thursday that these former appointees didn't follow his version of omerta after a new book revealed that he wanted to execute an unidentified White House leaker. Omerta is the ancient Sicilian mob tradition of killing those who talk outside their criminal gang.

Each day America's beggar-in-chief issues "Save America" statements via email. Most are petty, many deranged, but now and then, truth inadvertently comes through because of his utter lack of self-awareness, his emotional immaturity, and his rank incompetence as a leader, which I've shown for three decades to his furious denials.

Now the people he chose for his White House team are telling their stories of Dr. Jekyll and Mr. Hyde, the White House years.

Here is what Trump declared at 12:49 on Thursday afternoon: Let's dissect this unintended confession.

First, many of the people Trump says are "all of a sudden" talking to reporters have been talking to them for months and years. Trump doesn't read books – or for that matter, his Presidential Daily Brief when he was president. Not reading more deeply than the cover of a book often leaves Trump badly, sadly — and when he was president — dangerously misinformed.

Had Trump cracked the spines of the bookshelf of tell-alls coming out now, he would know that the authors carefully cultivated these sources and won their trust while he was president.

Second, notice that people who worked with Trump and talk about him other than as he wants you to speak, then you are, in his words, "losers."

The reason Trump made oh so many people sign nondisclosure agreements, even some 2016 campaign volunteers, was that anyone who gets inside could see the truth about Trump: he is and always has been a fraud, the self-made man who blew daddy's fortune. The Don Juan was sued repeatedly for groping and allegedly raping women because he lacked the charm to seduce them. And now the billionaire beggar-in-chief reduced to pleading for alms from the people he says he loves, the "poorly educated" he did so much to hurt while in office.

Third, Trump is back to his "many say" devices, as if that lends credence to what he says.

The fact is that many say he is the worst president of all time. Many say he is a Kremlin stooge — and if the documents published in The Guardian Thursday are true, Vladimir Putin is among them. Many say he is a lousy businessman.

I could go on here with enough examples to fill three books—oh, wait, just today I finished my third Trump book, The Big Cheat, out Sept. 28.

Fourth, who conflates stars and garbage? There are great metaphors, there are mediocre metaphors, and then there are Trumpian trash metaphors.

But at least this one was honest trash in which Trump admitted, finally, that he didn't hire the best and the brightest, but a bunch of losers.

Allen Weisselberg, the indicted Trump Organization executive, was removed today as a director of Donald Trump's golf resort in Aberdeen, Scotland, public records show. The move is the first to indicate how the indictment is affecting operations of the Trump Organization.

His removal comes as Scottish lawmakers and Avaaz, a global do-gooder organization, are pushing for an "unexplained wealth" inquiry into how Trump got the money to buy and refurbish both of his money-losing Scottish golf courses.

A 2018 British law lets investigators examine company and personal financial records to determine sources of money and riches that they deem suspicious. It's been called the McMafia law.

Trump's Aberdeen course lost nearly $1.5 million (£1.1 million) in 2019, up slightly from 2018. The property has lost money for seven years in a row.

The course also has an interest-free loan from the Trump Organization of $61.1 million (£44.4 million), disclosure documents show. Manipulating interest expenses is a common tax avoidance technique that can justify criminal charges of tax fraud unless executed with extreme care.

There are only two ways Weisselberg could be removed as a director of the Trump International Golf Club Scotland, Ltd. Weisselberg could have done so on his own. In that case, his lawyers may have advised him to do so for reasons not yet clear.

The other way would have been on orders from Donald Trump and executed through his sons Don Jr. and Eric, who remain as the only directors. That, too, may indicate a criminal defense strategic move. Since Weisselberg remains on the Trump Organization payroll it almost certainly does not suggest a split between the interests of Weisselberg and his boss.

The move suggests that Trump may be trying to make sure only he and his family members exercise any legal control over the Trump Organization.

Removing Weisselberg would not block or limit any Scottish inquiry or the investigation by the New York County district attorney's special grand jury, which on July 1 indicted Weisselberg and the Trump Organization.

The New York indictment detailed a calculated 15-year scheme using two sets of books to cheat the federal, state, and city governments out of more than $800,000 of taxes.

Weisselberg and the Trump Organization face 15 counts of grand larceny, tax fraud, and conspiracy. Weisselberg could get 15 years on conviction, but he also could get probation without even home confinement. None of the crimes Weisselberg is charged with come with a mandatory prison sentence upon conviction.

Weisselberg pleaded not guilty when brought in handcuffs before a state judge in Manhattan. The judge released the 73-year-old chief financial officer of the Trump Organization on his own recognizance.

The 25-page indictment is the first in what I'm sure will be multiple cases as prosecutors try to persuade insiders that they will be better off turning state's evidence than sticking with Trump.

Those who agree to help prosecutors early on get the best deals, often involving no prison time. Those who hold out may face prison even if they eventually cooperate. The indictment signals that prosecutors have solid evidence against tax cheats in the Trump Organization as well as anyone who took part in manipulating business records cold should they choose to seek their indictment.

As I read it, the indictment hints at future charges against Trump's two oldest sons, Ivanka Trump and Weisselberg's son Barry, who runs the ice rink and carousel in Central Park for Trump.

Mayor Bill de Blasio is trying to cancel that lucrative contract and another Trump has for a municipal golf course.

Ivanka was a Trump Organization vice president when she was paid more than $700,000 in consulting fees, which may be a disguised gift subject to tax.

Barry Weisselberg got a free apartment near Central Park, a car, and other perks on which his ex-wife has said no taxes were paid. Jennifer Weisselberg is cooperating with prosecutors, supplying them with extensive financial documents.

Donald Trump and his lawyers have tried to minimize the criminal charges while not disputing that Weisselberg received $1.7 million in noncash compensation that was never reported to tax authorities as required by law.

I critiqued Trump's cavalier attitude in this earlier column.

The United Kingdom requires private companies, like the Trump Organization, to make more disclosures than American law requires, including total revenue (called "turnover") and profits, fees paid to directors, dividends paid to owners, and loans outstanding.

In America, only companies with publicly traded stock or bonds must make such disclosures. As Donald Trump's personal property, the Trump Organization and its more than 500 affiliated enterprises are not required to make similar public disclosures in America.

America's panhandler in chief, Donald Trump, just proved beyond all doubt that he has no idea what is in the Constitution he took an oath to defend.

Trump today sent me and millions of others a text begging for money to finance federal lawsuits filed in Florida against Facebook, Google, Twitter and their chief executive officers for "UNCONSTITUTIONAL CENSORSHIP."

Trump is, at least for now, banned from their platforms for breaking their rules.

Had Trump ever read the First Amendment, he would know it applies to the government, not businesses. "Congress shall make no law" is the opening line. The amendment is only 45 words, so it shouldn't challenge even Trump's poor reading comprehension skills.

As interpreted by our Supreme Court, our Constitution prohibits only the government from censoring speech. Even that is not absolute.

Our Constitution says nothing about businesses turning away people because they violate company policies. Facebook, Google and Twitter have policies that people consent to when they click those "I agree to the terms of service" buttons to get access. On a simplistic level think of restaurants with this sign on the door: No Shoes No Shirt No Service.

Dictatorial Thinking

Trump has in the past said he would get Congress to pass laws so that no one could write or say things about him he doesn't like. That went nowhere, but it did show his Kim Jong-Un dictatorial thinking.

While Trump didn't use any North Korean firing squads to silence critics, he spent four years laying siege to the First Amendment and to the government being accountable to the people

Donald believes he should be president and that we should overturn the will of the people who rejected him out by a margin of seven million votes in favor of Joe Biden, who got more than 51% of the vote.

There are advocates for expanding the First Amendment to include businesses – many of them funded by the Koch Brothers and other super-wealthy business owners. They want to shrink our government to weaken its power to protect us, leaving them even more free to profit from polluting, paying workers less, and shifting the burden of taxes onto you. Charles Koch and his brother David, who died in 2019, sent a letter in 2012 basically instructing their more than 100,000 employees to vote for Mitt Romney. It had no legal effect. Since voting is secret, it didn't stop votes for Barack Obama, either. But the intent is clear: surrender your liberty to billionaire business owners.

Koch Brothers Ideas

Here is an excellent example of the idea that the First Amendment should apply to businesses. It comes from a Koch-funded ideological marketing organization.

The text I got today from the former president asking for a donation didn't link to any lawsuit. The people he deceives probably wouldn't read it if he did.

What's going on here is yet another Trump scheme to cajole supporters into giving him money.

Trump's misconduct has reduced him to pleading from alms, a pitch that works on the gullible and ill-informed. No wonder Donald, using the royal "we," often says, "we love the poorly educated." His schemes deceive the poorly educated with ease, helping him drain their pockets so he can keep his flailing Trump Organization afloat.

For sure, Trump needs lots of cash to pay lawyers as law enforcement finally closes in on him after decades of his successes in outmaneuvering police and prosecutors.

Two things you can count on from Trump's latest plea for alms:

One, it will raise money.

Two, the CEOs of Facebook, Google parent Alphabet, and Twitter — Mark Zuckerberg, Sundar Pichai, and Jack Dorsey – won't lose a wink of sleep over this. Indeed, their companies likely can get a court to order making Trump pay their legal costs to have the cases dismissed as frivolous.

Raw Story has uncovered a secret IRS tax favor for the super-rich—authorized when Donald Trump was president—that will take effect on Thursday, July 1. President Biden can stop it with one phone call. Will he?

The Biden White House was unaware of this Trump tax favor—disguised as a crackdown on wealthy tax cheaters—when Raw Story asked about it on Friday.

That's not surprising because the IRS remains under the control of Charles Rettig, a holdover from the Trump era. Before Trump named him IRS commissioner, Rettig was a Beverly Hills tax lawyer who helped the super-wealthy escape taxes and—if they got caught cheating—negotiated secret settlements that avoided public humiliation while minimizing taxes and penalties.

If Biden lets this Trump policy take effect it would be a huge benefit to clients of Rettig's old law firm and others like it. And it would make an already unfair tax system even more heavily tilted in favor of billionaires.

IRS Minimizes

Internally the IRS characterized the new favor for the rich as nothing more than a subtle change to comply with arcane civil service policy. But at least one high-level IRS manager saw through this façade and fought the plan, an email obtained by Raw Story shows.

What makes this Trumpian scheme diabolical is that on the surface, it appears to be a 50% increase in enforcement of gift and estate tax law, areas where cheating is rampant. Actually, it's the opposite.

Starting Thursday, July 1, the IRS will hire 71 new people to examine estate and gift tax returns.

The 137 IRS tax lawyers who do this work now are, in effect, highly trained colonels on the tax police force. They need sophisticated detective skills to understand the mind-numbingly complex trusts and other devices that lawyers like Rettig designed to hide money from the IRS.

Skills Downgrade

The new hires, however, won't be lawyers, only lightly trained "tax specialists." They will be equivalent of mere corporals on the tax police force, lacking the legal education required to see through the fog of confusion that tax lawyers get paid fat fees create so their clients can pay little to nothing in taxes.

Despite the severe downgrading in required skills, the new hires will get the same pay and benefits as the lawyers doing the work now. The new hires will also be eligible for promotion and to move on to other jobs in the civil service, unlike the existing auditors.

It makes no sense to pay the same wages and benefits for reduced skills. On second thought, that does make sense when the purpose is to create the appearance of increased tax law enforcement while doing the opposite.

This stealth plot to help the super-rich comes just days after Raw Story revealed a nearly total collapse of audits of super high-income Americans, those making on average $30 million each.

The IRS audited just 38 of the 26,517 households in this rarified income strata in 2018. Recommended additional taxes after audit fell 99.1% from 2010, my analysis of new IRS data tables found.

Our new expose comes after ProPublica and The New York Times published separate reports showing how many of the wealthiest Americans pay little to no taxes. Raw Story revealed how this forces everyone else to subsidize their lifestyles. All these reports dealt in part with weak enforcement of the tax laws regarding the highest income and wealthiest Americans.

Billions Become Pennies

Tax lawyers, like Rettig before Trump put him in charge of the IRS, help clients reduce or eliminate gift and estate taxes through a host of complicated legal devices. They include intentionally defective grantor trusts, split-interest arrangements, life insurance trusts, and several dozen other techniques that distort the time-value-of-money to shield dynastic wealth from taxes. Tax lawyers like Rettig reduce billions of dollars to pennies.

These devices enable dynastic wealth but at the price of inhibiting future economic growth and make it harder for new generations of wealth creators to arise, as Warren Buffett told me in 2001. Economic oppression from trying up wealth in trusts was a driving force in the bloody French Revolution of 1789.

The gift and estate tax laws are crucial backups to the income tax system, which Congress was told as far back as 1924 by Representative William R. Green, an Iowa Republican and longtime chairman of the House Ways and Means Committee.

Detecting these tax avoidance tricks and then figuring out how much tax is due requires sophisticated skills, especially in understanding legal doctrines and court decisions. The new hires need only minimal training, none of it in contract law.

So, while it appears the IRS is beefing up its auditing power, it is simultaneously moving to assign the work to employees less likely to detect cheating and when they do much easier to dupe. Imagine your local police department announcing it would no longer hire homicide detectives but instead assign future murder cases to patrol cops.

IRS Executive Fought Plan

The existing auditors are classified as "905" employees. The new hires will be classified as "901" employees.

Karen L. Sumler, the IRS executive who oversees the examination of gift and estate taxes, fought against the downgrade.

"I pushed back hard," she wrote in a June 16 email to her subordinates. "I provided documents from the decision back in 1967" to use attorneys to examine gift and estate tax returns to try and stop the plan. She said the IRS Chief Counsel "was unmoved."

After she lost that battle Sumler fell in line, writing about "a big change" as "a new opportunity.

Because of civil service rules, hiring lawyers as gift and estate tax examiners requires approval from the Treasury Department general counsel.

Treasury refused such permission when Trump was president. Biden or Treasury Secretary Janet Yellen can order that policy rescinded, which would allow the IRS to hire 71 lawyers instead of ill-trained "tax specialists" at the same pay.

If Biden lets this policy proceed, he is tacitly declaring that he supports Trump-era policy to help the wealthiest Americans pay less tax. That would be a betrayal of his campaign and White House promises to reduce unfairness in the tax system and require those making more than $400,000 per year to pay more to support the government which made their wealth and income possible.

Just stopping the plan from taking effect would give the Biden administration time to understand this scheme. The question is whether Biden will do what he promised or reveal himself to just be another politician who tells voters what he thinks they want to hear and then doesn't act.

The amount of additional taxes that the richest Americans owed after the IRS audited their tax returns fell more than 99% in Donald Trump's first full year in office, data tables released this week show.

Among households making on average $30 million in 2018, IRS auditors recommended less than $5.4 million in additional tax.

That's not the extra tax owed by one rich tax cheat. That's the total for all 26,517 households reporting income of at least $10 million in 2018—the first year of the huge tax giveaway Trump and the Radical Republicans in Congress engineered in the Tax Cuts and Jobs Act of 2017.

The recommended additional tax under Trump fell 99.1% from the $610.4 million that tax auditors recommended in 2010, Barack Obama's first full year as president.

In Obama's last full year in office, 2016, auditors found almost $106 million of tax owed by affluent households, 20 times as much as in 2018.

Even that 99.1% drop from 2010 to 2018 severely understates the collapse of tax law enforcement among the best off among us. That's because the number of households making $10 million or more nearly doubled during those years from 13,32 to 26,517.

Despite that huge increase in wealthy taxpayers, the number of completed audits of these very high-income Americans collapsed, from 2,605 to just 38.

Looked at another way, in round numbers, audits of wealthy Americans plummeted from 1 in 5 to just one in 700.

'Audit Roulette'

Such low risk of audit encourages the wealthiest Americans to play audit roulette. That's a tax game in which people understate income or, more often, overstate deductions figuring they have little risk of getting caught.

Those who do get caught often negotiate to pay the tax, interest and a penalty with no public record of their misconduct. This policy of settling, many times for dimes on the dollar, enables future tax cheating, especially by people in positions of trust such as financial executives and personal managers.

I calculated the numbers in this report from the IRS 2020 Data Book, which the service released Thursday after a month-long delay. Each year for decades, I have analyzed the numbers in the annual Data Book and other reports, consistently finding less and less tax law enforcement, especially at the top of the income ladder.

Charles Rettig, the Beverly Hills tax avoidance lawyer who Trump appointed IRS commissioner, told the Senate Finance Committee in April that tax cheating has become rampant. "It would not be outlandish to believe that the actual tax gap could approach, and possibly exceed, $1 trillion per year," he testified.

Individuals paid $2.8 trillion of income tax in 2020.

Trillion-Dollar Tax Gap

A trillion dollars of individual income tax owed but not paid would be well more than twice the official IRS "tax gap" estimate of $381 billion, about 70% from individual income taxes. Corporate profits, payroll and other taxes make up the rest of the gap. You can learn what the tax gap is and how it is measured here.

Rettig, in his testimony, made a point that I have made for years – the official tax gap is a low-ball estimate. I'd be surprised if the tax gap isn't at least a trillion dollars.

It relies heavily on surveys of what people say about how honestly they file their taxes. Those responses wouldn't include major league tax cheats or people advised by some of the most crafty accountants and lawyers in America and abroad, as revealed by the Panama Papers and the Paradise Papers exposes of tax cheats and their advisers.

Fewer audits among people who rely on wages and wage-like income such as pensions make sense because employers, pension plans and others verify the income people report on their income tax returns. In addition, under the Trump/Radical Republican tax law changes that took effect in 2018, only one in 13 taxpayers can even itemize deductions. In short, for most working Americans, opportunities to cheat no longer exist.

However, among the $10 million and up group, less than one dollar in five is verified as wages or pensions, my annual analysis of IRS Table 1.4 shows.

Cheating Business Owners

Congress trusts these high-income taxpayers, many of whom own businesses, to fully and honestly report their income and only take lawful deductions. Without many more audits, however, who knows.

Auditing only 38 out of more than 26,000 tax returns filed by the wealthiest Americans tells us next to nothing about their propensity to cheat.

The IRS cuts in hunting for tax cheats were far less severe for the working poor.

Among families applying for the Earned Income Tax Credit, the IRS audit rate was 1.8% in 2010, but half that level in 2018.

The amount of additional tax the working poor owed after audits fell by two-thirds under Trump, although that may reflect that about a third of these audits were still in process at the end of the federal budget year. In 2010 under Obama, that was true for just 11 out of almost a half-million audits of the working poor.

When we get the data for 2019 and 2020, it will almost certainly show an even more appalling record of favoritism to wealthy tax cheats.

ProPublica scored a fantastic scoop when it obtained and meticulously analyzed 15 years of raw income tax data on the wealthiest Americans. This leak of Internal Revenue Service records is by far the biggest and most important tax news in the 55 years that I've reported on taxes.

Thanks to the leaker, we now know beyond any doubt that the endless claims that America has a progressive income tax system are bunk. A progressive system means that the more you make, the greater the share of your income you pay in taxes. Back in 2005, I got the George W. Bush administration to acknowledge that the system stops becoming progressive near the top. But, unfortunately, ProPublica shows that it's even worse than what I reported back then.

Working people pay a larger share of their income in tax than the wealthiest of the wealthy. The top marginal tax rate on labor income is almost double that of capital gains.

Jeff Bezos, currently the richest man in America, paid no income tax in 2007 and 2011. He doesn't dispute that.

Bezos was not alone. Multi-billionaires Elon Musk, Michael Bloomberg, Carl Ichan, and George Soros all pulled off the same trick at least once in recent years, ProPublica reported after analyzing the IRS data. Warren Buffet pays less in tax than millions of Americans, something he and Soros have said is wrong.

Bloomberg, the former New York City mayor and owner of the financial data and news business bearing his name, paid over five years an income tax rate lower than that of the poorest half of American taxpayers.

On his income tax returns, Bloomberg reported making $10 billion. Yet, he paid just 3%.

The bottom half of income taxpayers averaged $17,200 of income in 2017 and paid 4%.

A system in which people who gross about $330 a week pay a much higher tax rate than someone who makes billions each year is not just regressive; it's an outrage. It violates principles of taxation that date to the Old Testament and ancient Athens.

I couldn't help but notice that my wife, a charity CEO, and I pay a higher income tax rate than Bezos, Bloomberg, and Buffett.

By the grace of Congress, those billionaires get to take unlimited losses when they make losing stock investments while Jennifer and I – and you -- can deduct only $3,000 a year. So even if my wife and I live into our 90s, we will die with losses we never got to deduct. That's the kind of unfairness Professor Brown compellingly demonstrates.

Until now, the Wealth Defense Industry tricked people by pointing to posted tax rates, not actual rates paid by the super-super-super rich, and asserting with cherry-picked data that the rich pay a lot.

The granular data ProPublica obtained proves that the tax rates Congress puts in the law and the tax rates people pay only match up for working Americans in the bottom 99.5%.

Congress taxes workers much more heavily than billionaire capitalists who, ProPublica showed, can live income tax-free.

All of the people ProPublica wrote about are white men. Professor Dorothy A. Brown of Emory University, in her insightful and readable new book The Whiteness of Wealth, shows how our existing tax systems favors wealth above income and discriminates against Black Americans. The design of our tax system plays a significant role in the vast wealth disparities between white Americans and people of color.

ProPublica's reporting backs her up. It showed that for most Americans, annual income taxes far exceed yearly increases in wealth.

At the apex of American wealth you can live tax-free, as I showed many years ago, thanks to rules that favor the rich, loopholes Congress refuses to close, and the minimal enforcement of our tax laws against the plutocrat class. One simple technique is borrowing against your assets. But, unfortunately, Congress doesn't count that as income.

The IRS determines interest rates on intra-family loans. The current rates are next to zero, less than even our modest inflation rate. Given that, why would anyone sell stock and pay a 20% tax rate to buy a yacht or a new jet when they can borrow against themselves almost interest-free and watch their stocks keep rising in value?

Hunting for the Leaker

The Biden White House announced late Tuesday that law enforcement is hunting for the leaker, who faces up to a decade in prison.

Whoever dared to do this should be hailed as a national hero on a par with Darnella Frazier, the fearless teenage girl with a steady hand who last summer recorded the slow, agonizing murder of George Floyd by Minneapolis Police.

We should be building statues to honor this leaker, if he or she is ever identified, just as we should erect one to honor Remy Welling, the IRS corporate auditor whose leak to me 17 years ago proved how corrupt the Silicon Valley stock options system was.

Thanks to ProPublica and its source, maybe Americans will at long last wake up and realize that our federal income tax, as currently designed, is a massive subsidy system for the super-rich.

And the source of those subsidies for Bezos, Bloomberg, Buffett, Musk, and other multibillionaires? That would be you.

Lots of luck right now trying to find a bicycle for under a thousand dollars. And if you insist on building a new house right now the price of lumber will be dear, adding perhaps $4,000 to construction costs for a typical home.

But don't assume that ruinous inflation is on the way. It's not. These are just temporary bumps and those who just wait a bit will see prices fall back.

It may be hard to appreciate this given all the scary stories in the news about inflation, stories that often lack context and nuance. But don't be scared.

And don't pay attention to the brief ups and downs in the price of stocks because half of American stock trading is done not by investors but by traders whose computers move so fast they can be in and out of a stock in less than a second. Besides, stocks don't make goods or services so they aren't part of the economy that creates jobs and produces paychecks.

Yes, the news is full of unsettling stories about inflation, but if you read carefully, you'll notice that the talk is about prices rising perhaps 4% this year. Not a big deal.

The highest inflation rate ever in our country was 29.8% in 1778. Since 1913, the highest rate was 19.7% in 1917. In 1946, inflation was 18.1%

Indeed, the highest inflation rate ever in our country was 29.8% in 1778. Since 1913, the highest rate was 19.7% in 1917, according to Investopedia. In 1946, inflation was 18.1%

In 1979 and 1980 combined, prices rose by a quarter. Now that would be scary today, but that is not what is happening.

Post-WWII Boom

This is more like 1946 when soldiers and sailors came home and wartime rationing left huge deficits in people's demand for goods. No cars or trucks had been built in America, other than to prosecute World War II, since 1941. People were getting married, so they needed homes and apartments and there was a boom in babies that lasted until the end of 1964. That made prices soar even though the economy fell into a brief recession as we moved from a wartime economy to a peacetime economy.

That was then; this is now. The pent-up demand from the pandemic is for only 15 months, not almost four years as in the 1940s.

Also, today, we have 8.2 million fewer jobs than before the Covid pandemic. We should have added another three million or so jobs since the coronavirus first appeared in America. That means millions of households are struggling just to pay the rent and eat. But for the social safety net spending under both Trump and Biden, we would be in a very deep recession. Instead, our economy grew 6% in the first quarter, roughly double the growth under Trump in his first three years.

Working, Spending Less

At the same time many millions of households, a large majority of them, continued working. Their spending fell, however, because they didn't have to go into work. They stopped going out to restaurants as they ate at home. Dry cleaners saw their customers evaporate. These people deferred spending on vacations and big purchases like cars and trucks.

Some of those who kept on working paid down or paid off their debt. Others added to their savings. In both cases they are primed to spend. That will mean a surge in consumption, but it won't last.

'Price Indifferent'

These folks can afford to be what economists call price indifferent. They may not be happy about it, but if the price of a bicycle doubles, they can just hand over the money. That won't go on for long. Bicycles are still being manufactured and once the surge in demand is fulfilled retailers will no longer be able to charge premium prices.

For the 12 months ending in April overall inflation, before adjusting for seasonal factors, was 4.2%, according to the government Bureau of Labor Statistics. That's the highest rate in this century, but it's not ruinous.

Used Car Prices Zoom

Prices of used cars and trucks accounted for a third of the inflation in the past 12 months. These prices were up 10% in April, the government reported. Prices surged because people who have put off buying used vehicles rushed to market as the economy and jobs began opening.

The prices of some foods are up right now because after 15 months of limited mobility, some shortages of crop workers and weather, both droughts and deluges. Trump's tariffs that savaged the price of American soybeans and enriched Brazilian soybean farmers also played a role.

These are temporary effects. We always see such temporary effects after a major shock to the economy.

We still have a shortage of money in the hands of most Americans. Purchasing by those who were able to save a great deal more during the pandemic in the short term is causing this blip of inflation.

Think Peaches vs. Plums

This is pretty much the same effect we see when bad weather ruins the peach crop and prices rise so much that many people decide to eat plums, apricots or apples instead. Likewise, when a bumper crop of peaches hits the market and prices fall, people by fewer plums, apricots and apples.

The key reason inflation is not going to turn long-term and ruinous is the huge excess cash held by those toward the top of the income and wealth ladders. They have far more cash than can be profitably invested. Just a year ago there was serious talk the banks might start charging people to hold their cash, which we have seen in a very limited fashion in Europe.

America is so awash in cash, though highly concentrated cash, that banks pay a tiny fraction of 1% on savings accounts. If you have $25,000 in your bank it may pay just 20-cents interest each month.

That's because demand for cash in the business world is extremely weak compared with the oceans of greenbacks being held in checking, savings and money-market accounts.

Every day, banks pitch mortgages to people with solid credit scores at about 2% interest. Back in the early 1980s, mortgages ran 12% to 14%.

So, if all the flowers budding in the warming Spring weather are making you desire a new bicycle, just hold off for a bit. Ride your old bike, arrange to borrow your neighbor's or take a walk. As soon as the people who are price indifferent have fulfilled their demand for new bikes, prices will fall back.

The arrival of effective Covid vaccines has revealed a grave failure in American education. Tens of millions of Americans, the ones who say they will never get vaccinated because there's no need or because they don't trust the vaccines somehow made it through years of mandatory schooling without learning numbers.

That they failed grammar school 'rithmetic is obvious if you ask two questions:

1. How many unvaccinated Americans has Covid killed?
2. How many vaccinated Americans has Covid killed?

The answers: 577,000 and 74.

That's 7,800 unvaccinated people dying for each one who was vaccinated.

And what of infectious cases? The latest Centers for Disease Control and Prevention count is 32,472,201 Americans infected of whom just 5,800 were vaccinated. Only 396 of those vaccinated who got sick required hospitalization.

The smart response to anyone who says vaccination is riskier than not is to laugh—loudly, openly and heartily. That's not taking away their free speech; it's using our free speech to respond with the derision their idiocy deserves.

No vaccine is totally effective, especially not at first. When I was a boy in the 1950s about 160,000 people a year, mostly children, contracted polio. More than a thousand died each year. Then we got the polio vaccines. First came the dead virus Salk vaccine in 1955 and then in 1961 the much more effective Sabin vaccine which used a weakened but living poliovirus.

Back then some polio cases were associated with vaccination mostly because one manufacturer had poor quality controls. That's an argument for rigorous regulation and inspection backed up by severe punishments like prison time for owners and managers who play cheapskates on safety. It's not an argument for avoiding vaccines.

The polio vaccines worked although the United States approved the Sabin vaccine only after the Soviet Union allowed it to be administered to children in then Communist Russia.

Parents today have no idea about the universal pre-1955 fear among parents that their babies would end up in iron lungs or worse. The last time a new polio case originated in America was 1979.

Few Deaths Among Vaccinated

As for the current pandemic, death is rare among people who are fully vaccinated. That means up to two shots and two weeks out from the date of the last shot. Covid deaths will become even rarer going forward, provided that vaccination becomes near-universal.

And yet 10s of millions of Americans believe—with absolutely no basis in verifiable fact—that the Covid vaccines are riskier than going without.

Rampant innumeracy helps explain the insane news that almost one in five healthcare workers doesn't plan to get vaccinated, as The Washington Post reported in March. Almost a third of Massachusetts State Police have not been vaccinated, and say they don't plan to be, either.

Ditto for thousands of healthcare workers in North Carolina hospitals. To persuade all state employees to get vaccinated, Maryland pays $100 but does not punish those who refuse.

Consider what a friend paraphrased this week: A doorman at her Manhattan apartment said he thought his risk was higher if he got vaccinated.

Here's the other side of the story if 10s of millions never get vaccinated:

The coronavirus will keep spreading to new human hosts. It randomly will mutate until a new variant proves even more infectious than the viruses circulating now, which will likely spark another pandemic, putting us all back into lockdown.

Virus Runs Rampant

Oh, wait, that's already happening with pernicious new variants in Brazil, Britain and South Africa. Look at the contagion gone wild in India where a lack of beds, supplies and oxygen means hospitals turn away people.

Sorry, you're just going to die because Prime Minister Narendra Modi failed to prepare for a pandemic even after seeing Donald Trump's lethally incompetent pandemic mismanagement in America.

Now imagine a new coronavirus variant with characteristics like MERS, the Middle East Respiratory Syndrome. In the past decade, it's only infected about 2,600 people—a third of them died. MERS is still around. It's just been contained, which is what vaccination is supposed to do with Covid.

A mutated virus that kills not fewer than 2% of those infected, as with Covid, but 33 percent of those infected, would devastate American society for decades.

It would mean death on the scale of the recurring Black Death pandemics that ravaged Europe for three centuries killing a third of the populace. Had that been the mortality rate for Covid, more than 11 million Americans would be dead.

Viruses don't respect borders, beliefs or governments. They operate on the same principle as cancer cells—growth for the sake of growth, even though they kill the host and thus their own colonies.

Thoughtless as the coronavirus is, it moves around the globe efficiently, carried to every corner of Earth by human hosts in jetliners. And that means we need universal global vaccination because people in India are dying from this virus and its variants are a threat to people in Indiana.

Wealthy Nations Need to Step Up

At two shots per person that's close to 16 billion doses, though it may well be that half as many will do the trick because we don't all live in packed modern urban areas.

That will cost a fortune and yet we as Americans have a direct interest, just as do residents of other wealthy countries, in paying to vaccinate people in poor countries because it's for our own well-being, our own protection.

This global cost brings us back to innumeracy. How did 10s of millions of our fellow Americans get high school diplomas without grasping simple issues about numbers?

Students, which of these is more? 577,000 or 74?

Aw, gee, teacher, I can't tell the difference.

How do people like the quarter of New York City cops who have not been vaccinated even get hired for a job that requires critical thinking skills, while distinguishing between 577,000 and 74 is pretty basic? (This may help explain why we have so many bad shootings by police; too little emphasis during hiring on critical mental skills.)

Surely the public schools—as well as private and parochial schools that are supposed to meet government standards— are failing to teach about numbers and about the basics of science in a meaningful way.

Stupid Republican

We have numerous members of Congress, Republicans all it turns out, who are proudly anti-science or scientific illiterates. They are so ill-informed they don't know the difference between "climate" and "weather" and evidently don't want to learn, either.

Such ignorance is found across America. Some people moronically believe that science is just another religion.

Then there are the fools who teach the absurd notion that people and dinosaurs coexisted.

Innumeracy would be less common but for a decision by PBS more than four decades ago to cancel The Electric Company, the daily kids show about numbers and their relationships. It lasted for only 780 episodes over six seasons.

The Electric Company died because there were no puppets, toys and related merch to sell to kids, unlike Sesame Street, which lasted 51 seasons on public television before moving to HBO, making it unavailable to millions of children whose parents can't afford the pay-TV service.

If only someone had created the Sign family of puppets—Equals, Plus, Minus and all their symbolic cousins. Then maybe the total numbers from puppet sales would have multiplied into enough funds to cover production costs, adding up to a positive product, namely more Americans learning their numbers and relationships between numbers.

There are, of course, other factors influencing those saying no to vaccination.

Religious Foolishness

Some hold mystical beliefs, like the Ohio woman on CNN who said she would never get infected nor would those around her because she was "covered in the blood of Jesus Christ." Some anti-mask and anti-social distancing pastors insisted that Covid was no danger, punishment for fornication or other nonsense—only to die from the disease.

Then there are the lies posed as questions by Tucker Carlson of Fox, who falsely says officials won't answer questions about vaccination, questions that have been answered without hesitation both broadly and in fine detail. Some Trumpers see vaccination as supporting President Joe Biden, oblivious that Donald Trump and Melania got vaccinated in secret even though he had the disease and recovered.

And then there are the crazy and incoherent QAnon-type conspiracy theorists who spread the silly lie that Big Brother plants tracking agents in the vaccine. Can we recognize and discuss mass paranoia, per the many DCReport essays by Dr. Bandy X. Lee?

In California, Orange County Supervisor Don Wagner asked Dr. Clayton Chau, the county's chief public health officer, about trackers in the vaccines. Dr. Chau laughed openly.

Later Wagner said that laughing was what he wanted because he was trying to persuade some constituents that the idea of a tracker in the vaccines is loony.

Taking the supervisor at his word, I think he's on to something. The smart response to anyone who says the vaccine is riskier than not is to laugh—loudly, openly and heartily. That's not taking away their free speech; it's using our free speech to respond with the derision their idiocy deserves.

We have good reason to mock and shame these people by calling them out for what they are: stupid, uneducated, fools; children posing as adults; selfish little spirits who care only about themselves and not their neighbors.

We should make them social pariahs because they are endangering us all by needlessly increasing the risk of a new pandemic or a deadly future wave of the current Covid crisis.

After the failed union vote at an Amazon warehouse in Alabama, the critical postmortems ignored a reality that may result in another election: Amazon cheated.

And Louis DeJoy, the Trump-era holdover dismantling the U.S. Postal Service, helped.

A May 7 labor board hearing will consider a request for a new vote sought by the Retail, Wholesale and Department Store Union. Its complaint details a campaign of intimidation to pressure employees to reject the union.

The Labor Board has a long history of looking the other way when given evidence of cheating by employers in union elections. But this time may be different because of who helped cheat --- from local on up to national officials.

The Jeff Bezos company installed drop boxes to collect votes on company property. Amazon placed these boxes despite being told by the National Labor Relations Board staff not to do so.

The drop boxes were placed with the connivance of the service led by DeJoy. Former President Donald Trump installed this high-rolling donor to worsen mail delivery during the fall presidential election Trump was hellbent to win. Less mail, less votes; less votes, less competition.

Here, we use the pejorative verb connivance because the drop box installed inside Amazon's Bessemer parking lot did not carry any postal insignia.

Amazon can leverage the Postal Service because Amazon has made itself crucial to USPS finances.

The Postal Service generated nearly $4 billion in revenue from Amazon in 2019 and counted an eye-popping $1.6 billion of that in profit. The volume of business Amazon delivered grew bigly last year because of the coronavirus pandemic.

This reliance on Amazon for highly profitable business likely explains why, beyond his well-documented anti-union animus, DeJoy would help Amazon fight the union.

The struggle between American workers and the bosses has been, and continues to be, fantastically lopsided.

A pro-union worker, Jennifer Bates, told reporters last month that colleagues at the Bessemer Fulfillment Center were reluctant to deposit ballots in the mysterious drop box that suddenly appeared in the parking lot.

Workers Feared Amazon

"Some of the people are afraid to put them in there," Bates said. "The 'yes' voters feel that Amazon will probably try to steal their ballots."

Labor lawyer Brandon Magner tweeted: "If Amazon did install these mailboxes, or if they exercise control over the mailboxes, such as having a key to the ballot box, that would clearly merit setting aside the election if the union were to lose."

During the voting, which lasted from Feb. 8 to March 29, Amazon demonstrated just how crucial controlling the Bessemer warehouse parking lot — and what went on inside it — was to the company.

'Coercion and Intimidation'

The union made the following claims:

• Amazon hired police officers to patrol the parking lot and surveil interactions between employees and union organizers. The constant presence, according to the union's protest filing, "created an atmosphere of coercion and intimidation thereby interfering with the right of employees to a free and fair election."
• The company used local government officials to change policies governing employees exiting the workplace. Amazon got the timing on a traffic light located outside the facility changed so union organizers wouldn't have much time to approach departing workers.
• Workers were forced to sit through hours of mandatory indoctrination meetings. These sessions, often used by companies to scare workers into believing their jobs will disappear if they vote for a union, are often effective with workers who have not yet experienced the benefits of collective bargaining.

Without a union, individual workers have no power. And while some who voted against the union told journalists after the vote that Amazon paid them well, the issue is whether it should pay them even better along with improving their benefits and work rules.

Record Profits

Last year, Amazon reported a profit of $24.2 billion before taxes, up from $13.9 billion in 2019 and almost 10 times its 2016 pretax profit.

Amazon pays little in federal income tax. In 2020 its "effective federal income tax rate of just 9.4%, less than half the statutory corporate tax of 21%." So said Mathew Gardner of the Institute on Taxation and Economic Policy earlier this year when Amazon announced its latest financial success.

Amazon has been so successful that a dollar invested when it first sold stock in 1997 has now grown to $2,300, making it one of the most fantastically profitable investments even in this era of high profits in high tech.

While the company doesn't want to share more of its gains with the blue-collar Americans whose labor makes its profits possible by quickly fulfilling orders, it does lavish money on its executives. One reason to favor the top is that the way Amazon pays executives provides a stealth financial and tax subsidy.

Costly Stock Options

The company showered so many valuable stock options on its highest-paid people that the tax savings alone came to more than $600 million last year, Gardner calculated.

Stock options save companies on corporate income tax. The companies get to deduct their value even though the cost is borne by existing stockholders. The stockholders' share of the company is diluted by the new shares given to executives. In other words, it's a tax deduction that costs the company nothing.

Options are also a form of compensation that cost the company nothing, unlike the hard cash it must pay out to rank-and-file workers like those at the Bessemer warehouse.

What's most troubling about this union election is that a federal government corporation worked with management against the workers. That's a troubling sign of authoritarianism.

Remember Amazon worked in concert with the service to install the dropbox to collect ballots on company property. The service acted after staff at the Labor Board, the federal agency tasked with protecting the rights of American workers in the private sector, told them they couldn't do it. But just as it pressured workers, Amazon pressured the service into pleasing Bezos, the richest person in America.

No Answers

Dave Partenheimer, a postal public relations manager, would not talk about who ultimately gave the go-ahead to install the dropbox in the Amazon warehouse parking lot.

Partenheimer declined to say whether the service knew that the Labor board already denied Amazon's request for such a dropbox. He also declined to identify who ultimately approved installation.

Instead, Partenheimer reiterated an earlier statement about a "Centralized Box Unit [CBU] with a collection compartment" being "suggested by the postal service as a solution to provide an efficient and secure delivery and collection point."

The Labor board isn't talking about the dropbox either, at least not while it considers the 23 separate objections filed by the Retail Store, Wholesale and Department Store Union.

The Labor board spokeswoman, Kayla Blado, declined to comment on whether the Postal Service has the authority to supersede her agency's decisions. She would not even confirm that the agency did, in fact, deny Amazon's request to have a ballot drop box installed on its property.

DeJoy Strikes Again

The persistent controversy about the dropbox and the Bessemer vote overall, however, parallels the madness that surrounded mail-in ballots during the last presidential election. DeJoy ordered the removal of mail sorting machines in the run-up to the vote, while the rest of the Trump administration whined about the supposed inability of the Postal Service to properly deliver ballots.

Trump also complained throughout his four years in office that the Postal Service was subsidizing Amazon. This was to advance his attacks on the aggressive reporting by The Washington Post, which Bezos owns, but whose newsroom he has never influenced according to the top editor and reporters working there.

We now know that the prices Amazon paid generated outsize profits for the Postal Service, exposing yet another Trump lie though only a few Americans, like DCReport readers, know this.

Fought Mail-in Votes, Then Didn't

At first, Amazon fought hard to block mail-in voting. It dismissed the potential dangers of in-person voting during the pandemic. Then it reversed course and challenging the ability of the Postal Service to deliver mail-in ballots in a timely fashion. Taken together it was a classic case of Amazon talking out of both sides of the company's mouth.

Lisa Y. Henderson, the Labor board's acting Region 10 director, dismissed the company's contradictory arguments in January and ordered that balloting be conducted by mail.

How the Labor board rules, and whether the long list of federal rules that hobble union organizing, will be addressed by President Joe Biden's administration. Decisions will be crucial to whether Americans as a whole prosper, or we continue to create inequality through policies that tilt heavily to the side of business owners and investors.

The struggle between American workers and the bosses has been, and continues to be, fantastically lopsided.

The Economic Policy Institute's Unequal Power Project, for instance, notes an "inherent imbalance in bargaining power between employers and employees" that creates "a lack of freedom in the workplace."

Pro-union workers at Amazon's Bessemer Fulfillment Center remained undaunted after losing the initial vote, declaring, "This battle has just begun."

"I'm not discouraged, Linda Burns told reporters after losing the vote by a more than 2-to-1 margin. "This is the beginning. [Jeff] Bezos, you misled a lot of our people. We're going to fight for our rights."

Co-worker Emitt Ashford said if the Labor board does order a new election, "We would see a change in the tide now that people have the information."

"We would win," he said.