Today, Douglas Holtz-Eakin, economic adviser to Sen. John McCain (R-AZ) during his presidential campaign, appeared on Bloomberg News to talk about his latest endeavor: pushing for a complete repeal of the estate tax. Holtz-Eakin relies on a shoddy study that he put together for the American Family Business Foundation that falsely claims that an estate tax repeal would create 1.5 million jobs (which he upped to 2 million in the interview).

However, Bloomberg’s crew, which is usually much better about calling guests out on their nonsense, seemed very taken with Holtz-Eakin’s perspective, at one point saying that the numbers are “very impressive.” The most critical question in the entire segment was simply “how did you get those numbers,” and Holtz-Eakin’s explanation went unchallenged. Watch it:

Before Bloomberg has another guest on to talk about the estate tax, it should read up on the facts. Only 1.3 percent of the .24 percent of all estates who pay estate taxes are small businesses, making it very unlikely that a repeal would result in this much job creation. As The Tax Policy Center pointed out:

[T]he estate tax can’t have much effect on hiring by small business because hardly any owners ever face the estate tax. Most small businesses are worth far less than the exemption level (currently set at $7 million per couple and higher for many small business owners who value their firms at below market price). We estimate that only 100 small businesses and family farms would pay any tax in 2009.

Of these few businesses, “all but a handful would have sufficient liquid assets on hand (such as bank accounts, stocks, and bonds) to pay the tax without having to touch the farm or business.” And since the tax exemption is so high (with the first $7 million untaxed), the average effective rate the heirs to these estates will pay will be just 14 percent of their inheritances.

And while Holtz-Eakin expressed great concern about federal spending, no one pointed out that, were the estate tax repealed, “not only would Treasury lose nearly a half-trillion dollars over ten years that would have been collected directly by the levy, but also billions more that would be lost due to the new gaping hole in the tax code.”

As CAP’s Michael Ettlinger has said, harping on the estate tax amounts to “flacking for the Paris Hiltons, the rich heirs and heiresses who have nothing to do with small businesses.” So unless Holtz-Eakin believes that Paris Hilton is going to single-handedly create a host of jobs, his numbers need some work. And Bloomberg should know better than to let him use them unchallenged.

Yesterday, the Treasury Department released a report on the progress of mortgage modifications under the Making Home Affordable plan, which is supposed to help 3 to 4 million troubled homeowners stay in their homes. However, the plan has gotten off to a very slow start, with only about 200,000 modifications underway (while 1.8 million homes went into foreclosure in the first six months of 2009). As I’ve pointed out before, 108,000 of those modifications are on mortgages owned by Fannie Mae or Freddie Mac, so privately held mortgages constitute less than half of the modification effort, even though they account for 55 percent of delinquencies.

The Treasury report names specific companies that have been the slowest in getting the modification effort off the ground. As the AP reported, “by publishing the names of companies that are lagging behind in the government’s plan to ease the housing crisis, officials are counting on public outrage to get the industry on track.” But such public shaming has Fox News’ Neil Cavuto all riled up, and he’s protesting the “cockamamie scarlet letter list“:

Think of what the government could be doing here, publicly shaming banks that might be trying to avoid the very thing that got a lot of them asking for federal dough in the first place: providing easy dough to folks who shouldn’t have gotten the dough in the first place…They can’t win, and now on some kind of cockamamie scarlet letter list, they can’t lose.

Watch it:

For his part, Cavuto never misses an opportunity to blame our economic woes on banks lending to poor people who couldn’t pay it back. But there’s a very good reason for giving a bank-by-bank breakdown of the modifications. As this graph shows, there’s a big disparity between the banks doing the most modifications and those doing the fewest.

There’s a clearly discernible break between Citigroup (at 15 percent) and Wells Fargo (at 6 percent). Bank of America, which received multiple infusions of cash from the TARP (totaling $45 billion), has done the worst among the big banks, with trial modifications begun in only 3.5 percent of cases. BofA’s offer acceptance rate of 28.1 percent is less than half of the program’s average.

Is this discrepancy between the numbers indicative of a problem in the structure of the program, or are certain servicers just dragging their feet? The only way to know is to look at the data from individual firms. But Cavuto prefers to cling to his misconceived notion that lending to poor folks created the crisis, and thus some firms doing far fewer modifications is indicative of nothing but those banks’ prudence.