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Given he's from New York and has done more than his share to make sure our government policies are friendly to Wall Street, the big banks and the hedge fund managers, I was pleasantly surprised to hear Chuck Schumer take his fellow Senator, Jon Kyl to task for trying to pretend that you're going to hurt a lot of small businesses if you raise taxes on those making over $250,000 a year.

I've heard this argument so many times from Republicans, it's ridiculous and ABC This Week host Jonathan Karl wasn't much better than Kyl here with trying to pretend like you're going to damage the economy if the wealthiest among us have their taxes go up a few percentage points for their income over a quarter of a million dollars.

KARL:  But I've got to ask you about this question about -- because this is one of the big sticking points left, is whose taxes go up?  Is it people making over $250,000, as the president wants, or Republicans suggested nobody, or people making over a $1 million?
 
But you, Senator Schumer, had proposed raising taxes only on those making over $1 million.  And I want to take a look at what you said about this proposal, going at $250,000.  This was last year.  You said, "In the eyes of many, it is hard to ask households making $250,000 or $300,000 a year -- in large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that is associated with wealth.  It also would affect too many small businesses." 
 
Weren't you right back then, when you said it was wrong to raise taxes on those...
 
(CROSSTALK) 
 
SCHUMER:  Well, look, we offered that to our Republican colleagues two years ago, when the political landscape was different.  They rejected it.  And then the president, sticking to $250,000, campaigned on it openly, overtly.  He won the election on it overwhelmingly on that issue; 60 percent of the public was with him. 
 
So that is our position.  It's a position that brings in more revenues.  And what we have learned, as the fiscal situation deteriorated, if you go much higher than $250,000, to raise the rest of the revenues you need, you're going to hurt the middle class as you take away their tax deductions.  So it's the right place...
 
KARL:  But you said back then...
 
SCHUMER:  ... to be.
 
KARL:  But you said back then it would affect too many small businesses.  Frankly, you sounded a little like Senator Kyl. 
 
SCHUMER:  Well, the bottom line is very, very simple, and that is that if you do -- if you go much above $250,000, you're going to hurt the middle class even worse and small businesses even worse by having to take away tax deductions.  That's not the place we were at two years ago.  It is the place we're at now, because the situation is deteriorating. 
 
KYL:  Jonathan, it's exactly the opposite.  The higher you set that level, the less small business you're going to hit.  And you're exactly right, and Chuck was right back when he talked about a million, because the increase in the tax rates for individual taxpayers sweeps in about a million small-business owners.  Remember, about half of small businesses are women-owned.  And it sweeps them up because they don't pay corporate tax rates; they pay as individuals. 
 
KARL:  But -- but...
 
SCHUMER:  Wait a second.  That's counting big hedge funds as small businesses, big Hollywood productions, like Oprah Winfrey, as small businesses.  It affects very few.  We all know mom-and-pop small businesses, the dry cleaner down the street and others, don't make millions and millions of dollars.

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It wouldn't be a Saturday on Fox's so-called "business block" without several rounds of union bashing and this week was no exception with the panel on Neil Cavuto's show continuing to attack the labor union, rather than management and the hedge fund managers, for the demise of Hostess -- Fox Ignores Hostess' Array Of Troubles To Scapegoat Union For Liquidation:

Fox News placed the blame for the planned liquidation of Hostess Brands squarely on a labor dispute with one of the company's unions. In fact, Hostess' unions had previously made significant concessions when the company went through a failed bankruptcy, and Hostess had many problems beyond labor costs, including an inability to adjust to changes in consumer tastes, which contributed to its bankruptcy. Read on...

And here's more from Daily KOS Labor -- 'Hostess Brands is a microcosm of what’s wrong with America':

As Hostess Brands announces its liquidation, the company's management is blaming a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers union—those damn workers wouldn't accept having their pay and pensions cut and their health care contributions increased just a few years after they made similar concessions in Hostess' previous, mishandled bankruptcy. "The forces most responsible" for the liquidation, CNBC's John Carney writes, "were two hedge funds that control hundreds of millions of Hostess debt and which have finally decided they won't squeeze any more filling into the Twinkie."

Only Silver Point and Monarch could have kept Hostess out of liquidation and kept the Twinkie bakery ovens firing. But they were, ultimately, unable to reach a deal with the unions that represents the workers who make and deliver products like Twinkies, Wonderbread and Ding Dongs. Without large union concessions—what some would say, total union capitulation—the hedge funds decided Hostess would have to die.

Hostess has clearly been mismanaged in recent years after having grown through the previous decades in ways that make its structure, including its labor force, especially complicated. But the end game is that private equity firms came in to do what they do: squeeze profits for their own multimillionaire investors at whatever cost to workers and to the company itself. Who cares if tens of thousands of workers are left unemployed and without the means to retire? Not Silver Point or Monarch, as long as they get their money. Who cares if Hostess exists tomorrow? Not Silver Point or Monarch, as long as they get their money.

These union members had faced a slow bleed for years. The only question for them was whether to accept an accelerated bleed and hope it would stop in a few years—but hope that in the knowledge that that was not a priority or even necessarily a desirable outcome to Hostess' private equity owners—or to fight for what they earned. We're hearing, and can expect to keep hearing, a lot about how it's so unreasonable of union members to expect to get the pay and benefits they negotiated and worked for, the pensions they've planned their retirements around. Because this is coming after a generation-long war on pensions and unions and middle-class wages. As AFL-CIO President Richard Trumka said in a statement, "What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor." Read on...

And from Think Progress -- Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay:

Today, Hostess Brands inc. — the company famed for its sickly sweet desert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production.

But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent. [...]

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.

It also follows a trend of rising CEO pay in times of economic difficulty. At the manufacturing company Caterpillar, for example, they froze workers’ pay while boosting their CEO’s pay to $17 million. And at Citigroup, CEO Vikram Pandit received $6.7 million for crashing his company, walking off with $260 million after the business lost 88 percent of its value.

Don't expect to hear that reported on Fox though. In Fox-land, it's always the greedy overpaid union thugs that are the heart of all of our problems.

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Susie wrote about this Monday and Ed Schultz did a nice job of walking the viewers through how the hedge fund managers on Wall Street did their part in contributing to the riots we're seeing in Egypt and across much of Africa by contributing to the severe spikes on the cost of food.

Here's Susie's post if you missed it -- The Era Of Cheap Food Is Coming To An End. Blame Wall Street Hedge Funds..

And here's more from Democracy Now -- The Food Bubble: How Wall Street Starved Millions and Got Away With It.

It's a shame it takes the kind of turmoil we're seeing in Egypt and Tunisia and the possibility of the entire Middle East blowing up in protest for our corporate media here in the United States do finally be doing some of the reporting normally reserved for shows like Democracy Now or networks like Al Jazeera.

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I thought this was one of the better moments during President Obama's town hall with CNBC's John Harwood. He gets asked by hedge-fund manager Anthony Scaramucci what we can do about the anti-Wall Street sentiment out there and what to do about health-care costs and taxation on businesses that are wanting to hire right now.

President Obama reminded him that most of the folks on Main Street would say that they're the ones who feel like they've been beaten up by Wall Street, and not the other way around. He also addressed the crying we've heard out of those on Wall Street who act like their tax rates going up a small amount is going to kill them.

After showing a quote from Newsweek where Blackstone CEO Steve Schwarzman had the nerve to say this:

"It's a war," Schwarzman said on the struggle with the administration over increasing taxes on private-equity firms. "It's like when Hitler invaded Poland in 1939."

Obama responded.

Well I don't know where that comes from. That's my point... I guess. It is a two way street. If you're making a billion dollars a year after a very bad financial crisis where 8 million people lost their jobs and small businesses can't get loans, then I think that you shouldn't be feeling put upon. The question should be how can we work with you to continue to grow the economy.

A big source of frustration, this quote that you just said, this was me acting like Hitler going into Poland had to do with a proposal to change a rule called carried interest which basically allows hedge fund managers to get taxed at 15% on their income.

Now everybody else is getting taxed at... you know, a lot more. The secretary at the hedge fund is probably being taxed at twenty five, twenty eight, right? And these folks are making... getting taxed at fifteen. Now there are complicated economic arguments as to why this isn't really income, this is more like capital gains and so forth, which is a fair argument to have. I have no problem having that argument with hedge fund managers, many of whom I know and went to school with and I respect their business acumen, but the notion that somehow me saying maybe you should be taxed more like your secretary when you're pulling home a billion dollars or a hundred million dollars a year, I don't think is me being extremist or being anti-business.

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Rep. Pete Sessions rails on about how terribly unfair the Democrats are being by wanting to raise taxes on the "job creators". Here's the legislation he's complaining about. I guess somebody's got to stick up for those poor little old hedge fund managers and multi-national oil companies.

Democrats announce deal on extenders, tax on hedge fund income:

The American Jobs and Closing Tax Loopholes Act will be released Thursday as the House Amendment to the Senate Amendment to H.R. 4213, the two said.

The bill extends several popular individual and business tax breaks, which are partly paid for by increasing taxes on a common form of income used by hedge fund managers to pay themselves. Levin and Baucus reached a compromise on how to tax "carried interest" which had been a divisive issue for years. Read on...

FACTBOX-U.S. tax, jobs bill targets fund managers:

The bill's total net cost, now at $31 billion, has been trimmed by Democrats several times to gain support from fiscally conservative Democrats.

... It would extend unemployment benefits that are set to expire at the end of the month for hundreds of thousands of Americans, tighten tax rules for multinational companies and renew a set of popular business tax breaks that expired last year.

Final action on the total package will have to wait until Congress returns from its recess on June 7, as the Senate was not expected to approve the bill before then.

... FUND MANAGER TAXES

The tax would hit the typical 20 percent share of profits that fund managers reap for managing money, known as carried interest. Fund managers, who can earn millions of dollars in a good year, pay a long-term capital gains tax rate of only 15 percent on their share of profits.

The bill proposes to treat 75 percent of those profits as ordinary income, a 35 percent tax rate for the highest earners. Until 2013, 50 percent of the profits will be treated as ordinary income.

The tax change would affect private-equity, venture-capital, real-estate and hedge funds, and has passed the House three times. It has yet to gain traction in the Senate.

The bill also slaps a 40 percent penalty on those caught attempting to skirt the taxes.

Revenue raised: $18 billion.

... BUSINESS TAX BREAKS

The bill renews a set of popular tax breaks for business and individuals, the biggest being the research and development tax credit used by major Fortune 500 companies. Other benefits extended include a tax credit for the use of biodiesel and renewable diesel and accelerated depreciation for certain business improvements. Cost: $32 billion

OIL COMPANIES, SPILL CLEANUP

The bill would boost the amount oil companies pay into a trust fund that pays economic damages from oil spills, to 34 cents a barrel from the current 8 cents a barrel.

The bill would also raise the $1 billion per incident limit on certain claims against the federal Oil Spill Liability Trust Fund to $5 billion. The fund was authorized for use in the aftermath of the Exxon Mobil Corp Valdez spill.

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You can always count on Greta Van Susteren to allow Republicans like Mike Pence to give an interview full of lies and Republican talking points like he did here and not challenge any of them. Where to begin? How about Greece's financial collapse which Pence blames on the country adopting a Value Added Tax or VAT. I wonder why Mike Pence didn't bother to mention Wall Street and Goldman Sach's part in their demise?

Here's an article from The New York Times explaining what happened there. Wall St. Helped to Mask Debt Fueling Europe’s Crisis:

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting. Read on...

No, the guy who was meeting with Wall Street hedge fund managers last month was instead blaming their problems on the taxes being too high. Despite the fact that Paul Volker has ruled out his idea of a VAT being on the table "now or for the indefinite future", the Republicans have decided this is a good campaign issue for them.

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Keith talks to Paul Krugman about the Republicans latest bit of hypocrisy on financial reform.

McConnell Slams Financial Reform Bill After Meeting With Hedge Fund Managers And Other Wall Street Elites:

This morning, Senate Minority Leader Mitch McConnell (R-KY) declared his opposition to the financial reform bill before the Senate. McConnell claimed to have principled objections to the bill, saying that it “institutionalizes” bailouts of Wall Street and that it would give the Federal Reserve “enhanced emergency lending authority that is far too open to abuse.” What McConnell did not mention was that, last week, he traveled alongside National Republican Senatorial Committee chairman Sen. John Cornyn (TX) to New York City for a private meeting with elite hedge fund managers and other Wall Street executives. The purpose of the meeting between the top Republicans and the financial executives was to enlist “Wall Street’s help” in funding Republican campaigns in the fall and killing any tough financial reform.

[...]

Separately, House Republican Conference Chairman Mike Pence (R-IN) met with hedge fund managers this morning and told them that “Democrats’ solution for financial reform consists of two words: government control.” He added, “America will continue to be the home of freedom and the free market; the place where liberty prevails.”

Read on...

Krugman wrote about the need to reform the financial system in this short post on his blog at the New York Times -- Bank Failure: Two Brief Notes:

1. Some commenters on this blog have argued that lots of small banks failed in Georgia, without systemic consequences. But these banks weren’t allowed to collapse; they were seized by the FDIC — in effect, nationalized — and their depositors were protected. That is, in effect they were rescued, although the stockholders were cleaned out.

2. Other commenters say that lessons from the 1930s are no longer relevant, because now we have deposit insurance. Um, shadow banking? That’s the point I keep trying to make: what happened to us in 2007-8 was that a large banking system had grown up, relying on repo and other forms of short-term borrowing rather than deposits, that wasn’t covered by New Deal-era protections and regulation. So what we had was the 21st-century version of a bank run; not crowds of people lining up at bank doors, but crowds of investors demanding haircuts on repo, which has the same effect.