Economy

by Frank Thomas and John Lawrence

Frank has eloquently argued “Yes” here in Part 2 and continued here in Part 3 of our examination of the financial crisis of 2008. Part 1 dealt with Republican economic philosophy over the last 30 years which had produced disastrous results for the economy leading up to the crisis.

This week John argues that AIG should have been allowed to fail and that this would not have affected Main Street banks or the banking activities of average Americans. But the real question is ‘If American taxpayers and the Fed had not given billions of dollars to AIG and the other large banking institutions, would they have indeed failed or would they, on the other hand, have survived quite nicely even without the bailouts?’

What’s clear in the financial crisis of 2008 is that Washington rescued Wall Street while abandoning Main Street.

Californians for Responsible Economic Development pushing ballot initiative to create oil and gas severance tax

by Andy Cohen

North Dakota does it. Louisiana does it. Florida too, and Alaska. Even Texas has an oil and gas severance tax, which largely funds state government there. Alaska is almost entirely dependent on their oil severance tax.

But in California, no such tax exists. California, unlike just about every other oil producing state in the U.S., practically gives away its natural resources to private industry. That could change, however, by way of the 2014 midterm elections.

The group Californians for Responsible Economic Development hopes to bring an initiative to California voters in 2014 that will impose a 9.5% severance tax on any and all oil and natural gas extracted from California land or coastal waters, a fairly modest proposal in comparison to other states. The fee in North Dakota, for example, is 11.5%. In Louisiana the rate tacks up to 12.5%. In Alaska, oil companies are dinged at the rate of 25-50% of the net value of the oil and gas extracted. California is clearly missing out on a massive revenue opportunity for state coffers.