First there was the New Deal, and then there came the Ordeal; now we need the Re-Deal.
For more than four decades after the Great Depression struck, programs based on progressive principles worked to ensure that all Americans shared in the prosperity of our great nation. The rich did get richer, but so did everyone else; fairness and empathy for our fellow man formed the moral foundation of our culture, and together we forged arguably the greatest nation in the history of the planet.
But all good things must come to an end, and that’s what started happening in the U.S. during the 1970s. The oil crisis of 1973, followed by a stock market crash and runaway inflation brought economic growth to a standstill. Productivity actually went backwards in 1974, shrinking by 1.5%, stagflation set in, the prime rate soared, and Americans were left desperate for change.
That change came in 1980. Ronald Reagan was elected in reaction to a stalled economy, the 444-day long Iran Hostage Crisis, and a general sense that America was losing its way. Reagan did bring change, by the boat load, and the short term results were impressive. In direct opposition to the austerity called for by Jimmy Carter, Reagan set in motion the wheels of a fiscally-expansive economic policy that would drop the 13.5% inflation rate of 1980 to just 3% by 1983.
Of course, most of the credit for the drop in inflation belongs to the monetary policies of then Federal Reserve chief, Paul Volcker, but it was Reagan’s combination of increased defense spending, coupled with massive tax cuts that would create a model for the future. Reagan would nearly double military spending during his time in office, while simultaneously ripping away the federal tax base. The result was a tripling of the federal debt, to $2.8 trillion, a dramatic shift that moved the U.S. from being the world’s largest international creditor to the world’s largest debtor nation.
Sadly, not only did Reagan plunge our nation into debt, but he did so as the reverse-Robin Hood in Chief. Establishing tax cuts very favorable to the rich, while cutting social programs and gutting the internal regulatory structure of the government, Reagan was the political godfather of movement conservatism. His policies, coupled with his suppression of union rights laid the foundation for the lopsided balance of prosperity we have today.
But as detrimental as Reagan’s policies were for working Americans, their harmful effects pale when compared to a single tenet that emanated from his bully pulpit — “Government is not the solution to our problem; government is the problem.”
No more destructive words have ever been uttered by a U.S. president. With a single statement, the actor turned president both rationalized his dismantling of social programs and gutting of tax revenues and also disassociated a large portion of the American public from their only means to combat their own demise. As Nobel Prize winning economist, Paul Krugman, once said in reference to movement conservatism, “Reagan taught the movement how to clothe elitist economic ideas in populist rhetoric.”
Once the American public bought into the notion of government-is-the-problem, the die was cast. The progressive ethics upon which modern America was built would soon be trampled time and again. Before long, the only Americans to reap any bounty would be the economic elite, who began to prosper as never before, doing so at the expense of everyone else.
The shift in public attitude was so strong that, in order to gain election, Democrats who once supported progressive principles embraced instead the Third Way. Combining conservative economic policy with a liberal position on social issues, Third Way Democrats are more Republican-light than truly Democratic. Bill Clinton presided in this manner, and as a result is responsible for such anti-worker legislation as NAFTA, as well as a heap of corporate wealthfare in the form of telecom “reform,” commodities treatment that opened the doors to the wild derivatives nightmare that nearly sunk the economy, and the repeal of Glass-Steagall, which removed all remaining barriers preventing commercial banks from playing in the Wall St. casino.
To his credit, Clinton did at least balance the budget and turn over a surplus to his successor. But once George Bush took office, all stops were removed. Without a progressive bone in his body, the younger Bush wasn’t held back by any sense of fair play. He drastically cut taxes, especially for the rich, dismantled the regulatory structure, replacing all key posts with industry insiders, and spent federal money like a drunken sailor. Bush was asleep at the wheel when the Islamic terrorists attacked on 9/11, and again when the economic terrorists on Wall St. attacked in 2008. He opened a new prison for the former and rewarded the latter with a $700 billion bail-out.
President Barack Obama was then elected by campaigning on a platform of “Change we Need.” Obama rode the wave of anger directed at Republicans and Wall St. all the way into the Whitehouse and then quickly proceeded to surround himself with the very people who had orchestrated the collapse.
Another Third Way Democrat, Obama has promoted more aid for those in need than what occurred under the eight years of W’s rule, but he’s also bowed to conservative economic policy time after time. The Obama healthcare “reform” improved access to healthcare insurance, but did so without effectively addressing the related costs. The financial “reform” bill, ostensibly enacted to prevent another banking crash, was passed without provision to deal with Too-Big-Too-Fail or the derivative casino. Most recently, Obama signed legislation providing tax relief to average Americans but not without also extending the Bush cuts for the most wealthy.
The net result of more than 30 years of a federal government divorced from progressive principles is an America more reminiscent of that which created the Great Depression than the one that was created to ensure that it would never happen again. Concentration of wealth today is the worst since the Depression — so bad that the top 1% have leaped from 9% of overall income prior to Reagan, to 23.5% today, and now have more financial wealth than the bottom 95% of all Americans.
The richest 400 Americans now have more wealth than the bottom 50%, while a record number of our people live in poverty, including one in every five children. The robbery of wealth extracted through the subprime mortgage scheme took 30% of all middle class wealth and transferred it to the Wall St. thieves and disreputable brokers across the country. Homeowners by the millions are still facing foreclosure, and many who are not are paying underwater mortgages. Yet the banks are still paying out billions in bonuses, even after being bailed out with taxpayer money, and now account for more than 40% of all American corporate profits.
Meanwhile, the corporate share of federal tax revenues collected dropped from more than 30% during the progressive era to a mere 6.6% today. But even that low rate would present a huge increase for firms like G.E. that just filed its second return in a row where the IRS had to pay them money, in spite of billions in profits. Of course, American corporations responsible for shipping as many as 8 million jobs overseas need their tax savings in order to pay for their CEO salaries that skyrocketed from 24-to-1 in the late 1960s to a high of 431-to-1, before dropping after the banking crash to a mere 319-to-1.
Average Americans would likely cheer the prosperity of the elite, if only a bit of it was shared. But while the rich have been lining their pockets, median household income has now experienced its first decline since 1967, and job growth under Bush was the slowest since 1945. The U6 unemployment rate, which tracks the underemployed along with the unemployed, is still hovering near 17%, and overall participation in the labor force is at its lowest point since 1984.
Politicians say that corporations would start hiring but might need incentives, because their record profits, the highest ever at $1.659 trillion in the third quarter of 2010, just aren’t sufficient. But not to worry, because while the Congress may be in stalemate, the wave of new Republican governors in statehouses across the country are doing everything they can to cut taxes, along with social programs, while waging a war against public employees. Who says we can’t concentrate wealth still further?
We now have a national debt that exceeds $14 trillion, and the clarion call amongst politicians on both sides of the aisle is for austerity, for cuts to Social Security and Medicare and a draconian slashing of social programs of all types. We are in dire fiscal trouble they say, and there must be shared sacrifice — but the only sharing going on is a split where all benefits go to the wealthiest 1% and all sacrifice to the other 99% of us.
There is no excuse for this corrupted mess. The American People have allowed our country to be hijacked by a self-serving elite who deliberately drive wedges into the populace so that we’ll fight amongst ourselves while they bleed us all dry. Hard working people across the nation are struggling to make ends meet while the money changers struggle to find more ways to exploit them. Hard work should be rewarded above clever manipulation. In the words of one of our greatest presidents, a Republican named Abraham Lincoln, “Labor is the superior of capital, and deserves much the higher consideration.”
Another famous Republican, President Teddy Roosevelt, once said “A great democracy must be progressive or it will soon cease to be a great democracy.” Truer words were never said. Progressive principles demand that all citizens work together for the common good. They support entrepreneurialism and prohibit monopoly. They’re rooted in fairness and insist that prosperity be shared. They require that we invest in our infrastructure, and in our people, for such investments form the true strength of a nation.
Progressive principles are about progress, about building a better America. Progress isn’t a dirty word — unless you prefer that things stay exactly as they are. The America captured in the artwork of Norman Rockwell, the America for which so many of us are nostalgic, that was an America built on progressive principles. The Great Depression was that same nation ravaged by scorched earth policies like those in effect today.
Isn’t it time that all Americans ask themselves which America they prefer?
We can work together to end the Ordeal and demand a Re-Deal where all Americans get a fair deal. One nation, one people — we must unite against the evil that’s destroying us; that evil has a name — its name is Greed.
“They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesman for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.”
Sound like anyone you know?
The quote is actually from FDR’s Vice President, Henry Wallace — in 1944. He was talking about the rising tide of fascism in America.
Fascism was defined most succinctly in the 1983 American Heritage Dictionary as: “a system of government that exercises a dictatorship of the extreme right, typically through the merging of state and business leadership, together with belligerent nationalism.”
It’s no accident that this all has the ring of vague familiarity. The parallels between recent events in the U.S. and the international rise of fascism that led to the Second World War are inescapable.
People will likely accuse me of stepping too far, as we Americans seem to abide by an unwritten law that forbids any analogy between the state of our politics and those of Nazi Germany. But while I wouldn’t equate for a nanosecond any comparison between the horrors of the Holocaust and anything occurring in 21st Century America, I am compelled to shine a light on the similarity of events and sound a warning about the threat of fascism in America today.
The fact of the matter is that Hitler came to power in Germany without winning the majority vote. He was appointed, not elected. Shortly after taking control, he used the burning of the German parliament building, allegedly by a Dutch communist, to declare a “war on terrorism.” Within two weeks of the terrorist attack, a prison for terrorists was constructed; within 4 weeks he pushed through legislation that, in the name of fighting terror, suspended constitutional guarantees of free speech, privacy and habeas corpus, and allowed police to access personal mail, wiretap, and imprison suspected terrorists without warrants.
Hitler then focused on a debt-financed military buildup that nearly sent the German economy into bankruptcy. He continued his buildup against stringent opposition but gained increased power by consistently casting all opponents as weak against the communist terrorists. He eventually managed to crush all opposition through aggressive attacks on trade unions, and then claimed for himself total power by disregarding the constitutional requirement to elect a new president when Hindenburg died and instead declaring himself Fuhrer.
As Fuhrer, Hitler became commander-in-chief of the military. He positioned himself as the protector of Germany and the German people’s savior from communism, Judeo-Bolshevism, and other undesirable minorities. He then launched an unrelenting campaign of German exceptionalism that would lead to a war that would drain the country’s economy and end in complete collapse.
I’ll leave it to you to decide what American president this may sound like, but regardless of that particular comparison, it’s impossible to dismiss the parallels between the march to fascist rule in Germany and what’s going on in America today.
As described in Pastor Martin Niemoller’s famous statement, “First they came . . . ,” the rise to fascist power came by dividing the people and attacking them group-by-group. In Germany it was first the communists, and then the unions and finally the Jews. In the good old U.S., it’s Muslims, anyone who can possibly be cast as a socialist, and now —public employees. Henry Wallace warned of fascists, that “always and everywhere they can be identified by their appeal to prejudice and by the desire to play upon the fears and vanities of different groups in order to gain power.”
Make no mistake about it, as Pastor Niemoller’s statement concluded, the rise of fascism will spare nobody. It’s public employees who are under attack today. They’ve been demonized as the cause of the current economic woes that were actually created by the thieves on Wall St. and the multinational corporations who shipped millions of jobs overseas. Teachers, police, nurses, janitors, firefighters — they’re all being cast as fat-cats, as the “haves,” the “others” with whom other working Americans should take issue.
But public employees are just a stepping stone for the neo-fascists. The wave of Republican governors elected to office in 2010 is engaged in a full frontal attack on working Americans of all stripes. From Rick Scott in Florida to John Kasich in Ohio, from Rick Snyder in Michigan to Scott Walker in Wisconsin, backed by newly elected right-wing legislatures, these wannabe tyrants are all talking about “shared sacrifice” while cutting taxes for the wealthy and then attempting to balance their budgets with spending cuts that impact everyone else.
Rick Scott’s attempts at unilateral action have been so drastic that he’s even run afoul of Florida Republicans. John Kasich’s battle against the working class has succeeded in crippling collective bargaining in Ohio. These men are fascists. They care not about America or Americans. They are the people of whom Henry Wallace spoke when warning that “another danger is represented by those who, paying lip service to democracy and the common welfare, in their insatiable greed for money and the power which money gives, do not hesitate surreptitiously to evade the laws designed to safeguard the public from monopolistic extortion.”
Governor Scott Walker of Wisconsin too is a fascist. He may not identify himself as such, but the record of his tactics and objectives leave him without defense. Aligned perfectly with Wallace’s description of American fascists, where they “are most easily recognized by their deliberate perversion of truth and fact,” Walker claimed not to be a union buster and then presided over the corrupt action of Wisconsin Republicans to end collective bargaining. In order to side-step the requirement that Democrats be present to form a quorum on any legislation with fiscal impact, the Senate Republicans split off the portion of their “budget repair” bill that ended collective bargaining and passed it alone. It never had anything to do with balancing the budget and was always about the fascist drive to strike a death blow to unions.
Unions are anathema to fascists. Fascists believe in authoritarian rule and place the value of money and power far above the welfare of human beings. They are all corporatists who readily accept the illegitimate doctrine of corporate personhood, and resoundingly reject any and all egalitarian values. Fascism is dedicated to establishing a ruling class by devaluing that which all people have to contribute — their labor — and instead concentrating all wealth and power within a small economic elite.
Because American fascists must convince large numbers of Americans to vote against their own best interests, they all must follow a playbook of deceit. Again, writing about fascists in the 1940s, Wallace described them this way: “His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power.”
Fascism is a disease that’s spreading with increased speed in America, and the only known antidote is public awareness. Fortunately, the symptoms are pretty easy to detect — if politicians complain of budget deficits but argue to cut taxes on the rich, if they fight to break unions, even after all economic concessions have been accepted, if they advocate for harsh penalties on crime but strive to protect fraudulent bankers from prosecution, if they argue that corporations should have the same rights as real people, if all of their arguments are heavy on hyperbole and devoid of substance, if they always seek to divide instead of unite the people — you have a very good bet that they’re also likely fascist.
There’s nothing really new here. We fought a World War to end the spread of fascism across the globe. And FDR, Henry Wallace and many other patriotic Americans struggled to ensure that fascism was snubbed out here at home. The fascist’s bag of tricks is the same as it was 70 years ago. All we have to do is learn from history, otherwise, as they say, we are doomed to repeat it.
If somebody told you that they wanted to lose weight, but they wouldn’t increase exercise or cut their caloric intake, would you believe they were being earnest? How about a friend who says he seriously wants to get out of debt but has no plan to increase income and is only willing to trim the most marginal of expenses? If these cases seem to be obviously insincere, then why does anyone believe that House Republicans have any real interest in addressing the deficit?
Reuters reported shortly after 4:00pm EST on Friday that House Republicans have sharpened their pencils with further slashing in their spending-cut plan that will now total $60 billion. But even at this higher level, which is nearly double their total announced earlier this week, how serious is a plan that will trim the $14 trillion debt by only 4-tenths of 1%? The Republicans are already patting themselves on the back, but since $60 billion in cuts amounts to less than 3 months of interest payments on the debt, should Americans really join the celebration?
The specific problems with the Republican plan are many, but they really all emanate from the conservative framework on which the plan is based. First, and most obvious, is their ridiculous premise that the deficit must be addressed while simultaneously lowering taxes for everyone, including the very wealthy. This is analogous to that person who claims they want to lose weight but won’t exercise — they’ve cut the options in half and in turn doubled the stress on what’s left. With all trimming reliant upon appetite control, dieting starts to look a lot like starvation.
This is far from the way America handled this issue in our glorious past. While climbing out of the Great Depression, our country was hit with the expense of World War II. The economy was invigorated (from forced government spending) and unemployment turned to overemployment. But the national debt, which had been around 43% of GDP, did climb to more than 121% by the end of the war. Undeterred, a united America shared the burden and that debt was steadily paid down post-war, with the debt reduced every year through 1974 (except a slight bump in 1949).
Federal debt bottomed in 1981 at below 32% of GDP, and the remarkable recovery was achieved almost entirely without cuts in spending. In fact, federal spending has increased in all but 4 years since 1947. The solution to the huge debt brought about by WWII was not austerity, but exactly that which Republicans have removed from the table — high top marginal tax rates. The 24% rate in effect when the market melted down in 1929 was raised to 63% in the early 1930s and sat at 81% when the nation went to war. It spent many years over 90% and never dropped below 70% until 1982.
The notion in post-war America was that those who benefited most from our society should give back accordingly. It was an ethic based on the premise of unity, of patriotism and the greater good. The wealthy were taxed heavily on their top marginal dollars, but contrary to the scary scenarios of economic ruin predicted by contemporary Republicans, the economy flourished.
Our economy boomed into the mid 1970s, bringing about a sort of golden age of American capitalism. During that period the GDP multiplied many times over, the middle class swelled, unemployment remained low, and prosperity was shared by most Americans. The rich still got richer, but not at a rate significantly faster than the rest of the populace. Massive concentration of wealth was avoided, and the bottom 90% of Americans enjoyed their peak income year in 1973. Through it all, we remained a country united.
But the sense of unity that had thrived for more than 30 years was lost in the early 1980s. The oil crisis of the 1970s, coupled with a massive influx of imported goods, brought about extremely high inflation and resulted in the heavy loss of jobs. This confluence of events caused the American people to lose faith in the government programs that had given us decades of prosperity, and laid the groundwork for the presidency of Ronald Reagan.
Reagan was elected president by running on a government-is-the-enemy platform. He cut taxes, slashing the top rate first to 50% and later to 38.5%, while also dropping the bottom rate from 14% to 11%. Unemployment was slowly improved, averaging 7.5% for his eight year term, and the economy did recover. But before Reagan left office, he made the unprecedented move of lowering the top tax rate to 28%, while simultaneously raising the bottom rate to 15%.
So began the era of Reaganomics. Hacking the top tax rates while raising the bottom, along with huge increases in military spending and cuts to Medicaid, food stamps, education and the EPA, the pendulum had swung. America became a nation divided between the haves and have-nots, and the national debt began to swell. While the federal deficit had never climbed over $80 billion prior to Reagan, it never dropped below $128 billion during his term. After decades of paying down the debt, it soared from $1.1 trillion under Reagan’s first budget to $2.9 trillion for his last.
Deficit spending had existed under previous presidents, but for Reagan, it was the core of his budget policy. When Reagan left office, he left behind the budget framework for the new Republican Party. That framework is still being followed by John Boehner’s Republican House: lower the top rate, feed the corporations, cut the estate tax, deregulate anything and everything, protect defense spending, and cut whatever else remains. It is under the umbrella of these mutually exclusive objectives that Boehner’s House has created their plan to address the deficit.
The problem with the Republican budget planning process is not just that it exacerbates the deficit problem by insisting on tax cuts for the top 2% of Americans; it’s also the narrow slice of expenditures that they will even consider to subject to their budget knife.
Our federal budget for 2011 amounts to $3.64 trillion. That total is split between $247 billion of interest payments on the debt, $2.1 trillion in mandatory spending (consisting mostly of Social Security, Medicare, and pensions), and $1.2 trillion of discretionary spending. Since the vast majority of mandatory spending comes from entitlements, which are by definition funded outside of income tax revenues, this leaves the substantially smaller discretionary pie from which to cut — and once the Republicans protect their sacred cows, few slices are left on the table.
At approximately 58% of discretionary spending, the price tag for the military accounts for the lion’s share of the pie. This includes around $550 billion for the Department of Defense and another $170 billion for the Nuclear Security Administration, Homeland Security, Veterans Affairs and related programs. Add another $159 billion for “Overseas Contingency Operations” (our Middle East wars), and the Republicans have stashed away all but 4 pieces of that 10-piece pie before it gets served up for cutting.
So, using the Republican framework for deficit reduction, the process starts with tax increases and military cuts pulled completely off the table. That leaves around $441 billion in government spending that’s subject to the Republican axe. Remove from that other Republican pet pots, like the $20 billion or so in oil company and other corporate subsidies, and it becomes evident how much the Republicans are like that person who allegedly wants to lose weight but won’t exercise. It is true that they’re willing to do some dieting, so long as they don’t have to give up any carbs or fat.
The result is a Republican budget proposal that leaves their campaign benefactors happy and instead cuts deeply into programs that benefit the needy and the nation as a whole. Their latest plan cuts billions from education and HUD, slashes more than $3 billion from the EPA, cuts from the FBI, reduces state and local law enforcement assistance, cuts from the FDA, trims nearly a $1 billion for energy efficiency efforts, cuts into science funding, NASA, the GSA, IRS and Treasury, trims the Army Corp of Engineers, slashes over $1 billion from FEMA First Responders, takes nearly $2 billion from job training, and drains billions more from the DOT. At a time of high unemployment and a decaying national infrastructure, over half ($33 billion) of the Republican’s planned cuts are at the expense of labor and transportation/housing.
This is Republican economics at its finest. Their practices seem more consistent with some sort of Bizarro World Robin Hood, where the hero is actually a villain, and he steals from the poor to give to the rich. This is not the ethic upon which America was conceived. It is precisely the evil of elitist selfishness that the Founding Fathers strived to defeat.
Our present economic woes are not the result of over-taxation or excessive regulation. No, the causes of our nation’s ills are exactly the opposite. Our ailment is rampant greed and a steady decline in the middle class that stems largely from the massive concentration of wealth that’s occurred over the past 30 years. Today, the top 1% of Americans holds more financial wealth than the bottom 95%, and this Republican budget plan is nothing but another dose of the poison that brought us this disease.
Americans do need to be concerned about the federal debt, but the way to address it isn’t on the backs of the poor, working and middle classes. Our shared debt has been much larger as a portion of GDP in the past, and the formula for recovery and prosperity has already been proven. The Republicans refuse to follow that formula because their plan isn’t about the debt. If it was, tax increases and cuts in military spending would still be on then table.
The wellbeing of our nation is at stake, and the Republican House has proven itself to be either disinterested or completely incapable of prescribing the necessary action. It’s time for the American people to stand united and tell these thieves that we’ll no longer stand for their hypocritical nonsense. If they believe the deficit to be a major issue, then address it in earnest. If not, then abandon the false focus and help with the programs we need to create jobs and restore prosperity to the middle class.
Whatever the case — it’s time for all of our elected officials to cease their infernal shell game, stop the finger pointing, and for once dispense with the snow-job and TELL THE FREAKING TRUTH!










