Apr 012013
Scan of cover of Common Sense, the pamphlet. N...

Scan of cover of Common Sense, the pamphlet. No alterations were made to the scan. (Photo credit: Wikipedia)

What a difference a few centuries makes!

It was early 1776, when Thomas Paine penned one of the most important literary works of all time. Long held as the pamphlet that sparked the Revolutionary War, Paine’s “Common Sense” made a compelling argument for American independence and drove colonists down off the fence of indifference regarding British excess.  Paine’s work gave voice to the growing unrest of a nation being actively exploited by an unholy partnership between an all-powerful monarchy and the corporate profiteers of the time. That much should resonate with the vast majority of citizens of 21st Century America, but today, the “common sense” of the Founders has largely been replaced with something very different.

Contrary to the tenets of modern conservative mythology, the Founders were anything but anti-government zealots. There was indeed much debate over the degree of power appropriate for the federal branch, and even within that body, the extent to which the executive should have control. But be that as it may, there was never any argument over the absolute necessity of government. In Paine’s own words, “Here then is the origin and rise of government; namely, a mode rendered necessary by the inability of moral virtue to govern the world.” It wasn’t a desire to be free of government that brought about the dumping of the East India Company’s tea into Boston Harbor, nor was it rejection of the public good or the tax revenues required to provide it that drove the colonies to war; it was the overwhelming need to end the tyranny of governance without morality.

Read the long list of “injuries and usurpations” listed within our Declaration of Independence in the indictment against the Crown. Each and every entry addresses the corruption of an immoral government, not the immorality of government.  The problem with the Tea Act of 1773 wasn’t simply that it raised taxes on tea; the problem that led to the Boston Tea Party was that the law was enacted to give a corporation, the East India Company, full and unfettered access to the American tea trade and extend to it unfair advantage by granting an exclusive exemption from any tax on tea exported to the colonies. Those ships in Boston Harbor weren’t boarded in protest of taxation – the protest was against the corrupt effects of corporate lobbying and the government sponsorship for which it pays.

The Founding Fathers fully understood and appreciated the need for moral government and knew all too well the debilitating impact, the exploitation and erosion of rights inherent in a system intended to serve the few at the expense of the many. It was no accident that the Constitution of the United States was a strengthening over the articles that held together our young republic, nor was the enactment of the Bill of Rights merely a political endeavor.  The Constitutional Convention of 1787 signaled clear acceptance of the premise that a strong nation required a government that was both strong and moral, and the system of government that emerged was clear acceptance of the core principle of our democracy: so eloquently stated by Thomas Jefferson, “I know no safe depository of the ultimate powers of the society but the people themselves.”

How can it be then that that which was so patently obvious as to be considered “common sense” in the time of wooden ships and oil lamps is now so hotly debated in the age of information?

Can it be that the Founders were wrong, that the drive for less government will actually pave the path to more freedom, to an increase in happiness? Somalia has far less government, but it’s unlikely that many Americans would argue to adopt Somali style law here at home. Although our founding establishes the “pursuit of happiness” to be an inalienable right, it’s the countries of Northern Europe that consistently register as those where the citizenry is the most happy – and they do so with far higher taxes and more government than that of the US.

Perhaps instead, the Founders were actually right: maybe, it’s not so much the size of government, but rather the size of the group in control of the government, that threatens true freedom and inhibits the happiness of the people?

This was the “common sense” that pervaded American thought from the time of our founding up until the late 1970s. It was clear to Thomas Jefferson where the real threat to liberty resided, “The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed corporations.” Lincoln too was astute in his mastery of this common sense, “We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution.” Progressive Republican (now an oxymoron) and noted trust-buster, Teddy Roosevelt, had no qualms with loudly voicing this wisdom, “to dissolve the unholy alliance between corrupt business and corrupt politics is the first task.” His cousin and 32nd president, Franklin Delano Roosevelt, could not have stated it more clearly, “We know now that government by organized money is just as dangerous as government by organized mob.” Even former 5-star general and president, Dwight D. Eisenhower, warned of the potential for corruption when economic power casts its shadow on government, “We must guard against the acquisition of unwarranted influence . . . by the military-industrial complex.”

But alas today this wisdom that brought us independence and enabled our ascension as the greatest nation in the history of the planet has somehow been brought into question.  Our nation now stands divided between those who still believe in the “common sense” that prevailed for the first 200 years of our history, and those who instead embrace a different way of thinking, a new paradigm steeped in dogma, devoid of factual substance, bereft of moral underpinning, and made popular by the very powers that so many good Americans strived, and often gave their lives, to keep in check.

Paine, Jefferson . . . all of the Founders, Lincoln, the Roosevelts,  they all had one thing in common that bound them to “common sense” – they believed that government was the “solution” to the ills of society, a means to address the “inability of moral virtue to govern the world.” Sadly, both that belief, and to a constantly increasing extent, the ethic upon which it is based, no longer hold their honored position at the forefront of the American political psyche.  Adhering to their core tenet that no good crisis should ever go to waste, the powers of money and greed seized the opportunity presented by a 1970s America struggling to address a global shift in the energy market, and like vultures circling a wounded beast, swooped upon a fragile and unwitting public. Hawking a new ethic, where the immorality of greed was turned on its head, and selfishness suddenly became a virtue, Americans were sold a counterfeit bill of goods – government was painted to be “the problem,” not the solution, and the age of “common sense” gave way to the new era of “common nonsense.”

Make no mistake, while this claim may sound like hyperbole, it only seems so because the utter nonsense of the “government is the problem” cult has been so wildly popular and widely accepted, it’s become a cultural article of faith for many Americans. But unlike “common sense,” which can be argued with sound reason, based on empirical evidence and historical precedence, any argument in support of the new “common nonsense” must, by necessity, be rooted in the same deceptions, distortions, and distractions from which the entire paradigm was spawned.

Unless one believes that Paine was wrong in his assertion that government is made necessary by the failure of humanity to otherwise govern itself in a moral manner, then the very premise of the argument to shrink government to where “we can drown it in a bathtub” is flawed at its core . . . provided you actually object to immorality. The simple truth that seems to evade so many good people is that, whether government is small or large, or whether it exists at all, we will all be governed. We can be governed by a body formed “of, by and for” the People, or we can be governed by some form of ruling elite, but one way or the other, governance will occur – decisions will be made and rules will be set into place. The only real question is by and for the benefit of whom?

It doesn’t take a genius to figure out that what’s good for the billionaire is not necessarily good for the working person, but still the purveyors of “common nonsense” have somehow managed to hoodwink millions of people into diligent support of policies that cannot lead anywhere but to the demise of the American worker. Just as the monarchy of King George served the English Crown at the expense of the colonies, the new American plutocracy serves the economic elite at the expense of the rest of America. The key difference is that in 1776 we united, embraced “common sense” and went to war to fight against the tyranny of the ruling elite, but today we stand divided, with half of the American public embracing “common nonsense” and fighting to strengthen the suffocating stranglehold the ruling elite have around the throat of our democracy.

The fact of the matter is that, where sound government is built on a solid foundation of unity and morality, the argument to shrink government “in order to serve the people” is built on a smoldering dung heap of manufactured division and self-serving propaganda.

Arguments for a strong and efficient government “of, by and for” the People, contend that working people deserve a fair wage; that no American should work and not be able to afford food, shelter and healthcare; that investing in our nation: in the education of our people, in developing clean sources of energy, in protecting the environment, in building and maintaining our infrastructure — is the best means to make America stronger, and that the true greatness of any nation is measured by the well-being of its average citizen, not the vast wealth of its richest few.

In stark contrast with this vision are the arguments that form the entire basis for the “shrink government” movement. Strongly upheld in the dogma of contemporary conservatism, yet proven time after time to be utter falsehood is the entire hit parade of “common nonsense.”

Trickle-down economics, the notion that wealth allowed to accumulate at the top will be shared, has been revealed to be a sick joke. It has never worked, not in the 1890s when it was graphically referred to as “horse and sparrow” — where the more oats fed to the horse, the more edible matter there is available in their droppings — and it surely doesn’t work today. Wealthy individuals don’t invest more in additional capacity because they have more money leftover after taxes — they do so when increases in demand require increases in supply. It’s really that simple: in order to rev up the economic engines, you need to increase demand, and it doesn’t take a quantum physicist to understand how that’s best accomplished —through policies that benefit the middle class.

When it comes to government budgeting, contrary to GOP doctrine, tax cuts do not actually pay for themselves. This is easily evidenced by the results of the Bush cuts of 2001 and 2003, which as “common sense” would suggest, are the source of the single largest portion of the present federal debt. The argument that tax cuts for the rich will raise tax revenues is nothing but the same “voodoo economics” used to support the rest of the “common nonsense” about trickle-down. Of course . . . nobody actually believes it’s true — not even the liars who say it’s so. Everyone knows there’s ZERO empirical evidence to support the claim. In fact, all evidence supports exactly the opposite.

In a 2005 Congressional Budget Office study looking at the macroeconomic impact of an across-the-board 10% tax cut, the CBO estimated that the BEST CASE return on such an “investment” would be to recover 22% of the lost revenue over the first 5 years and 32% over the subsequent 5 year period. And those were their “most optimistic” projections. Using their more conservative assumptions, the CBO concluded that the recovery would be only 1% over the first 5 years, and that the second 5-year period would actually produce a 5% increase in lost revenue. What’s important to keep in mind is that this study looked at “across-the-board” tax cuts — for rich and poor alike. If the cuts were isolated and applied to the top tax rates only, even less of the money would find its way back into the productive economy, ensuring a net negative result. A 2009 study by Mark Zandi, head economist for Moody’s, came to the same unavoidable conclusion regarding tax cuts, and also offers an eye-opening comparison to the “common sense” net-positive impact of government stimulus spending.

Unfettered by fact or substance, “common nonsense” is abundant and free of the ties that bind rational argument. Take for instance the story that the fight to keep the top marginal tax brackets from rising is about protecting small business. This is a great talking point, but when placed under the light of factual scrutiny, it becomes immediately apparent that when you increase taxes on people earning more than $250K, you don’t — in the real world — actually impact small business . . . unless that is, you share the elitist view that the 2.5% of “small businesses” that include large hedge funds, law offices, and billion dollar companies like Bechtel and Koch Industries are actually “small” businesses. If it seems to you a little deceptive to label billion-dollar hedge funds as “small business” because they employ so few people, or perhaps a bit disingenuous to use the same label for billion-dollar companies because of the legal form of the business, you just might have some grasp of “common sense,” on logic, reason, and honesty. There are many terms that fit this particular “small business” type of distortion, and “common nonsense” is probably the most kind.

How about the “common nonsense” that President Obama has raised taxes on average Americans? It’s a valid claim — only if signing 18 tax cuts for actual small businesses, lowering income taxes for 95% of the population, and bringing about across-the-board payroll tax cuts can somehow be construed as raising taxes on average Americans.

At the center of the entire “common nonsense” narrative is the story of the pending doom of Social Security and the assertion that it requires we raise the retirement age and cut benefits. The truth is that the program is actually able to pay full benefits through 2037 and pay 75% of benefits thereafter without making any changes. And the further truth is that full benefits could be paid for the entire 75 year horizon and beyond, simply by lifting the taxable earnings cap, thereby treating the richest Americans like everyone else and requiring them to pay on every dollar they earn.

Medicare too has a “common nonsense” crosshair painted over the program. The story goes that issues with Medicare are “forcing” us to swap the program out for a voucher system that will place all burden on elderly recipients to cover cost increases. The perpetrators of this cruel lie euphemistically refer to it as “premium support,” but in the real world, the one where “common sense” still prevails, it’s clearly seen for the throw-the-elderly-to-the-wolves option it actually is. Sadly, in the immoral world of “common nonsense” this choice is preferred over allowing Medicare to negotiate drug prices, moving away from the profit centric fee-for-services healthcare model, or otherwise dealing with the soaring cost of healthcare, which presently costs us more than double the average for other OECD nations and consumes over 17% of our GDP.

“Common nonsense” also dictates that defense spending is sacrosanct, even though we spend nearly as much on defense as the rest of the world combined, with a Department of Defense budget that’s actually tripled in size just since 1997. Still, somehow the argument is that, in order to protect ourselves and remain safe, we must continue to increase defense spending that already runs more than $1 trillion annually, when all defense related spending is included, and is pushing 30% of the federal budget.

The tenets of “common nonsense” assert that the American Dream is still what makes our nation special, yet completely ignores the fact that upward mobility in the US has gone the way of the Dodo bird. They contend that taxes are too high, even though they’re at the lowest portion of GDP since 1950. They posit that the debt is our most pressing issue, threatening to bankrupt the economy, in spite of the fact that we once paid down the bill for World War II that weighed in at 122% of GDP. They even argue that the federal stimulus of 2009 was a failure, while the fact is that it added as much as 4.5% to the GDP and increased domestic employment by between 1.4 million and 3.3 million jobs.

Many ideas may be “common,” but there’s nothing sensible about the need to give tax subsidies to oil companies that already enjoy profits of $341 million per day. The denial of climate science may be accepted in the halls of “common nonsense,” but in the halls of science, it’s clearly seen as “nonsense” by 97-98% of those performing research on the topic. The promotion of the Keystone XL pipeline for the jobs it will create, the assertion that corporations are people, or the fight to protect the robber banksters from regulation are all both “common” and utter “nonsense.” There’s no legitimacy in the argument that we need to both balance the budget AND maintain special tax advantages for the wealthy, like a 15% tax rate for hedge fund managers and provisions that allow the very rich to hide their earnings in tax havens abroad. This is all “common nonsense” of the most bold and blatant variety!

Those people who strive to exploit American workers, send jobs overseas, leverage capital to dismantle and destroy productive companies, and fight to defund unemployment insurance, should be openly rejected when they then stand and complain that the 47% of Americans who’ve been left with no money, and no job, pay no income tax. It’s like kicking somebody in the teeth and complaining that they got blood on your shoe. Such people should be seen as the snake-oil-peddling purveyors of “common nonsense” they truly are. Vulture capitalists don’t feed the productive economy — they feed on it!

Like carnival barkers, these hucksters want Americans to believe that we’re faced with such rampant voter fraud, that draconian measures that may interfere with the ability of legitimate voters to participate is regrettably necessary, that the problem is just too dire to ignore. So, what’s the truth? That your odds for winning the Powerball or Mega Millions jackpot are 6 times better than finding a single case of in-person voter fraud. But of course, when you just can’t compete honestly on the issues, the “common nonsense” justification to suppress democracy becomes an absolutely essential component of your plan to retain control — and America gets 30 states enacting measures to disempower voters over the past two years.

Yet as ridiculous as the tenets of trickledown may be, as egregious as the efforts of voter suppression, as reprehensible as the arguments illegitimately attacking the “entitlements,” possibly the master stroke of “common nonsense” is the utterly absurd notion that, if we fail to cut government spending, the United States of America is going to become another Greece — we’re going to go bankrupt.

Now that’s one hell of a scary prediction! But never mind the fact that the entire “what we have is a spending problem” meme depends entirely on the “common nonsense” of trickledown and tax-cut doublethink — predictions of an American bankruptcy are, in fact, forecasts of the IMPOSSIBLE. The truth is that it’s impossible for Japan, Australia, Canada, the U.K., or any other nation that issues its own non-convertible, floating exchange-rate currency to go bankrupt. As Alan Greenspan has clearly stated, “a government cannot become insolvent with respect to obligations in its own currency,” because, “Central banks can issue currency, a noninterest-bearing claim on the government, effectively without limit.” Yet in the Bizarro World of “common nonsense” we must embrace the same austerity that’s destroying the economies of Europe in order to avoid a scenario that can’t happen anytime before pigs fly.

“Common nonsense” is not some natural and unavoidable phenomenon. The sad truth is that, like in Orwell’s Nineteen Eighty-Four, the natural human process of cognitive dissonance has been systematically replaced with a form of doublethink, where people simultaneously embrace certain long held values and their contradictory opposites. This can only be made possible through deliberate deception and promotion of falsehood, through constant revisionism — through perpetual generation and repetition of “common nonsense.”

Just as the tobacco companies of the 1960s lied to suppress the truth about cigarette smoking, willfully polluting the lungs of so many Americans just to maintain corporate profits, the corporatocracy of today feeds the “common nonsense” pump and pollutes every aspect of American society for the very same purpose. Thomas Jefferson made it abundantly clear that, “An educated citizenry is a vital requisite for our survival as a free people,” and the opposite is also true — a misinformed citizenry is a vital requisite for exploitation of a free people.

Make no mistake, the source behind the wellspring of “common nonsense” has but one motivation — the thirst for money and power. Thus far their deception has been overwhelmingly successful. They’ve permeated the American consciousness with a false meme of government that takes from a hard-working middleclass to gives to an undeserving poor, yet the plain truth is that “91 percent of the benefit dollars from entitlement and other mandatory programs goes to the elderly (people 65 and over), the seriously disabled, and members of WORKING households.”

They’ve used this “common nonsense” to distract the public and conceal the truth that what’s really occurring is the systematic use of power and influence to control government for the benefit of the most wealthy, to take from that hard-working middleclass and feed the proceeds to a voraciously greedy and disconnected rich. Nowhere in the annals of “common nonsense” will you see reference to the growing concentration of wealth, to the fact that the richest 1% now hold more financial wealth than 95% of our population combined, nor will you hear the barkers speak of the 93% of all economic gain in the present recovery that’s gone to that same 1%. And rest assured, you damn sure won’t hear any mention of record-breaking CEO salaries or the huge bonuses they’re paid while offshoring American jobs and forcing workers to accept more than 3 decades of stagnant wages culminating in the recent drop in nationwide median income, the first since 1967.

American democracy is under attack, and the war isn’t being waged by a foreign foe. The enemy of a strong and prosperous America is the very same enemy Jefferson, Madison, Lincoln, the Roosevelts, Eisenhower and so many others warned about. It’s the enemy of which Jefferson expressed his wish to “crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to trial and bid defiance to the laws of our country.”

If America is ever to save its middleclass and return to a system of shared prosperity, it must first come to reject the blatant falsehood and turn from the “common nonsense” of the cult of gutted government. The common sense of our forefathers holds as true today as it did when they formed our fledgling government: the solution to tyranny is now and always has been the unity of the People — and government “of, by, and for” those People is the only mechanism through which their authority can be set into force.

Enhanced by Zemanta
Nov 062012
Who's got the money in America - romney economics

Who's got the money in America - romney economics (Photo credit: EN2008)

“When I was a child . . . I thought like a child, I reasoned like a child. When I became a man, I put childish ways behind me.” The words of the apostle Paul resonate as truth – they cannot be refuted . . . at least not within the circles of those who have actually grown up.

And what’s the first lesson you learned as a child? What was that first major step of personal maturity? That thing, as a parent, you know you have to teach your child? That lesson that if not learned at home will, without doubt, be taught in a child’s first outside social contacts?

For me, and in my experience most others — that lesson was that we all have to “share.”

Everyone is taught this lesson at one time or another. For most of us it’s in kindergarten, at the absolute latest. But some people seem to learn this lesson much better than others. And some “others” deliberately put off “learning” the lesson, and instead decide to push the issue beyond that which would be tolerated in polite company.

Think about how you feel anytime somebody breaks your personally adopted code for sharing; it’s a serious matter. The person who empties half of the appetizer plate before others get a bite, or the guy who doesn’t seem to understand that traffic merges best when people take turns, or even the family member who just helps himself to your last soda, beer, whatever the item . . . without asking — all are viewed with a mixture of shock, dismay and sometimes contempt. The fact is, in a very personal way, breaking the code of sharing is tantamount to betrayal.

Indeed, our personal understanding of how we share is fundamental to all interaction. As we mature, what is originally understood as the simple fact that we have to share, expands and becomes a widespread set of rules of engagement. These rules provide a basic expectation of mutual respect, not only for the rules but for each other. They are at the deepest level an expression of our personal values, of how we wish to be treated.

So, if sharing is such a primary lesson, and we’re all instinctively aware of the importance of reaching an understanding regarding the acceptable rules, why is it that, as a people, we never address the issue directly? Why is it that our political debates always focus on doctrinal assertions but never on defining one of the most basic rules of engagement — how we want to divvy things up?

I submit that the reason is the stranglehold upon both government and media held by those people who very much don’t want an honest conversation about how we should share, those who never really learned the lesson in kindergarten. It’s far too profitable to stigmatize the opposition as envious, as lazy, as wanting to punish success, so they spew empty rhetoric  and turn the discourse toward entrenched positions of policy, where there’s no danger of the people actually threatening a real conversation, much less interrupting the status quo.

But the glaring truth is that unless We the People are content with the current state of rules governing how we share, the dialogue to directly address that issue is precisely what we need to have. The situation will only get worse if we do not.

So, are we collectively content with the status quo? I suspect not.

In fact, I have it on good authority that We the People have serious issues with the state of sharing in America. There are no better metrics with which to understand how we share than those measuring wealth distribution, and few Americans believe our current profile to be desirable. In a 2010 study conducted by researchers at Harvard and Duke, it was found that 92% — 90 freaking two percent — of Americans would prefer a more equitable distribution of wealth than what exists in our country today. And the results were consistent across demographics, across economic divisions, and across the political aisle.

The study shows clearly that once policies and politics are stripped away, Americans not only prefer a more equitable wealth distribution model, but are very surprised to find out how concentrated wealth actually is in the U.S.. When asked to estimate the share of wealth held here by the top 20%, the more than 5,500 study participants set the presumed share at 59%. The actual number is 84%, far above the average estimate, and nearly 50 percentage points above the 36% share found in the preferred Swedish model.

Even more alarming than the share of wealth held by our most well-off 20% is the share held by the truly rich. The lopsided nature of a system that rewards capital accumulation while suppressing labor compensation has increasingly handed the lion’s share of all income gains to the richest 1% of Americans. Such gains were once shared between business owners and the workers that made their wealth possible, but this is now the exception, rather than the rule . . . and the trend is accelerating.

The fact of the matter is that as recently as 1976, the top 1% took in about 9% of total income. But through the use of deregulation, privatization, offshoring and tax policy that favors the rich, each of our most recent economic expansions has handed increasingly lopsided shares to the most wealthy. During the Clinton expansion, the top 1% took 45% of all income gains; that share swelled to 65% during the Bush years and has now peaked at 93% as we climb out of the Great Recession. The U.S. now ranks 98th among the 136 nations measured for income inequality by the Gini index — worse than Iran or China — and the richest 1%, who now claim 24% of income, have managed to amass more financial wealth than the least wealthy 95% of Americans.

If this current trajectory is allowed to continue, it won’t be long before the Top 1% claim for themselves more income than the Duke/Harvard study shows the average American believes should go to the top 20%. This is clearly not an outcome congruent with ideals that promote fairness as a virtue, but the truth of the matter is that such concentration is far more than merely inequitable and much more serious than a purely moral analysis might suggest.

What should be of concern to all Americans, even those who presently benefit from the rigging of our economic system, is that this dynamic is parasitoid in nature, and if allowed to continue will kill its host. People need to understand that there are two very distinct and alarmingly separate American economies in operation today, and only one of those systems serves to strengthen our nation — the other presents a threat more grievously dangerous than all the wannabe terrorists and nuclear armed foes combined.

You see, when it comes down to it, there are really only two sources of real wealth — natural resources and labor. These are primary, and when combined, they’re capable of producing the valuable secondary wealth (those things we make) that we all strive to obtain and put to use. Taken together, this process forms the system that is the productive economy of any nation, the part of the economy that fuels the engines of growth. Our economy works just like any other engine: when properly fueled and maintained, it cranks along doing its job, but when starved of fuel or neglected for maintenance, it clanks and sputters, and if not given proper attention — eventually grinds to a halt.

Henry Ford is probably the industrialist most credited for understanding this dynamic. It was 1914 when he doubled the wages of his workers, fully appreciating the symbiotic relationship between workers and business owners, between labor and capital — understanding that only workers could provide the demand needed to spur increasing supply. In his 1922 book, “My Life and Work,” Ford stated “We wanted to pay these wages so that the business would be on a lasting foundation,” and continued, “A low wage business is always insecure.”

Somehow, nearly a century later, this fundamental wisdom is seemingly lost in American society. Somehow, Americans now believe the basic absurdity that our economic engines can keep running without fuel and require no maintenance whatsoever. Somehow, a large sector of the American populace stepped through the looking glass to support the idiotic notion that extractive polices that suck wealth away from the productive economy and feed it into a tertiary system of paper assets and financial casino operations will, by some magical means, restart the very engines they starved of fuel in the first place.

Well, it ain’t gonna happen people!

The harsh truth is that the tertiary financial economy that once served to provide capital for productive investment has been almost entirely replaced by a system of vulture capitalism that is quite literally sucking the lifeblood out of the American economy. Adjusted for inflation, the wages for American workers have been flat for nearly 40 years, while CEOs who made 24 times the average salary in the 1960s now make hundreds of times what their workers are paid. Median household income recently declined for the first time since 1967, while corporate profits hit all-time highs. Even upward mobility, the measure of how well a system facilitates people moving up the economic ladder, is all but gone in the U.S.. That old “pull yourself up by your bootstraps” thing . . . it’s no longer so much about getting ahead as just getting a job — likely one that doesn’t pay enough for food and shelter much less a yearly vacation and a comfortable retirement.

These are far from being indicators of a healthy economy. When the economic engines are humming, as they did for the better part of the time from World War II up until the energy issues of the 1970s, everyone moves ahead. Successful businesses reward the employees who toil to bring them success, thereby funding the demand that spurs increased production. Those same businesses then invest in increased capacity, creating more jobs, spurring more demand, and a virtuous cycle is formed — one where all stakeholders prosper.

But when the benefits of increased productivity, the type achieved by American workers who now produce 50% more per hour than they did in 1973, go entirely to only the most wealthy among us, it’s a vicious cycle that’s formed instead. When jobs are sent overseas where workers labor under abysmal conditions for wages of a $1/hour, that vicious cycle is reinforced. And when the profits of productive enterprise are siphoned off instead of reinvested in labor and additional capacity, the vicious cycle becomes a death spiral, one that if not addressed, can have only one end — the eventual total collapse of our economy.

The good news is that the degree of wealth concentration present in the U.S.today is not the result of market economics but rather the product of policies designed to rig the system. Contrary to conservative myth, it wasn’t shady home buyers who caused the housing market to crash but rather unregulated banks that bled the economy dry in order to increase their profits. And although the privatization wave that’s swept across government services for the past many years has swelled the bank accounts of countless contractors, it’s largely been at increased cost to American taxpayers — on average 1.83 times the cost, according to a recent study. But as intuitive as it should be, even to the most casual observer, it is tax policy that’s contributed more than any other factor to the gutting of the American economy.

Trickle down economics has never worked, not in the 1890s when it was graphically referred to as “horse and sparrow,” where the more oats fed to the horse, the more edible matter available in their droppings, and it surely doesn’t work today. Wealthy individuals don’t invest more in additional capacity because they have more money leftover after taxes — they do so when increases in demand require increases in supply. It’s really that simple: in order to rev up the economic engines, you need to increase demand, and it doesn’t take a quantum physicist to understand how that’s best accomplished —through policies that benefit the middle class.

Of course, the plutocrats, those wealthy few who run our nation by exercising the influence that only money can buy, will do everything in their power to further rig the game. With today’s global economy, they have decent odds that they can actually survive and prosper by betting against the good old U.S.of A.. They’re already hard at work counseling workers to accept the new normal of low wages and scarce benefits. But it doesn’t have to be that way, not if workers band together once again, not if the American people drop their differences and once again stand united against a common foe, against those who would take everything for themselves, regardless of the consequences to people and country.

Make no mistake about it — concentration of wealth is the problem, and only a united populace can fix it. The only path back to true economic prosperity is through regulation, investment, and increased effectiveness of government. We need regulations that ensure businesses pay all their costs and stop dumping, back onto taxpayers, those they can legally avoid — like damage to the environment and the health of our citizens. We need the investments in infrastructure, education, and energy that will help lubricate and maintain our economic engines, while strengthening the middle class and providing the fuel our economy needs. And we need changes in tax policy that will put some of the massive wealth accumulated by the richest Americans back into productive use by funding these needed investments. There is no other way, and anyone who professes otherwise is quite simply lying.

Greed is indeed a motivational factor present in humanity, but contrary to the doctrine of Ayn Rand acolytes, like vice-presidential candidate Paul Ryan, selfishness is not a virtue — it is in truth the destructive force at the core of all wrongdoing. From a societal perspective, there is nothing positive that can be said about an economy where the richest 400 people have more wealth than the poorest half of the population — 150 million citizens. Our nation was founded on opposition to exactly the type of system that fosters this form of wealth concentration, a system that was ruled by a wealthy aristocracy that had no real idea of the lives and hardships of everyday people.

Effective distribution of wealth is a concern for all Americans. The rules needed to achieve it are the responsibility of government, and those who oppose the establishment of said rules are the people who failed to learn that kindergarten lesson about sharing. They’ll frame “redistribution of wealth” as a pejorative, ignoring completely the fact that wealth was already “redistributed” when workers were underpaid for their labor or shared resources, both natural and man-made, were utilized in generating their profits. These kindergarten dropouts will just keep taking unless their insatiable addiction for “more” is curbed by the rules of a society that’s taken the time to define how they choose to share.

Thomas Jefferson, the author of the Declaration of Independence and vociferous defender of personal property rights, obviously passed kindergarten with flying colors. He was fully aware of the dangers of concentrated wealth, once arguing that “Whenever there is in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right.” One of his counterparts, the Father of the Constitution, James Madison, was in full agreement, arguing for “the silent operation of laws which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort.” And Adam Smith, the father of modern economics, helped to define the foundation of the system for which Madison argued, “It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion” — progressive taxation.

The bottom line is that those of us who learned to share need to stand up and demand that those who didn’t repeat kindergarten until they do. The wealth distribution model identified as optimum by those Americans participating in the Duke/Harvard study is not merely the moral best case — it’s also the superior economic model by far. Fortunately, the only reason it’s not a fact of life inAmericais because We the People haven’t demanded it. All we have do to make it once again a reality is to accept the gift given to us by the Founding Fathers — a government of, for and by the People. Such a government was then and will always be the solution.

Enhanced by Zemanta
Apr 072012

The Sorcerer

Once upon a time in a land not far away there lived a mighty people. Together they worked, and everyone shared in the fruits of their labor. Life in their nation wasn’t perfect; there was inequality, but no matter a person’s station in life, as the nation prospered, so did they all. A sense of shared purpose united the people, and it seemed that nothing could stop their collective pursuit of a better life for one and all.

Sadly, one day trouble came to this prosperous land. The people still worked as hard as ever, but regardless of their toil and labor, the irresistible force of their combined will had come to meet an immovable object. The engines that drove their economy, the mightiest in the history of their world, had come to be chained to the whim of foreign kings.

It was the good fortune of the people that a man of unwavering faith and strength of character had been elected to lead them. Without regard for his own lot, the leader spoke to the people candidly. He shared the truth of their situation. Open and honest were his words; he warned them that they were at a crossroads, that there was only one path forward to true freedom. He sounded the alarm over their growing dependency on other nations, but he also shared his vision for the future. He called on all of the people to join together, to face their problems and embrace their common destiny.

The people understood that the road would be hard, that sacrifice was needed and more effort would be required of everyone. Only with a united public could the challenges be met. The nation was ready to rally behind their leader, but another man, a man of celebrity, would offer an alternative.

His voice was calming, and his words were clear; there was no need for sacrifice, he proclaimed. Dependency on foreign kings wasn’t the problem — the trusted leader and his oppressive institutions were at fault.

Beleaguered and struggling from before the trusted leader came to power, the people were eager for better days. Their very identity as a nation had become threatened, their confidence shaken. The words of the challenger fell like sweet music upon their ears.

The challenger stood tall. Strong and sure of himself, his scripted appeals hypnotized all who listened. He summoned the people to look back and recall the pride of their mighty nation. He assured them that the path directed by the trusted leader was the path to ruin, that the leader was soft and would surely bring them no good. He offered to relieve them of the hard choices expressed by the wise leader, to release them from the bonds of his “oppressive regime.” Prosperity was their birthright, he said, for they were truly exceptional and deserving. They could be certain that his was the superior path, for it promised resurgent glory, and did so without sacrifice.

Like those of days gone by who crowded around medicine shows, seeking miracle tonics and magic elixirs, the people were swept up by the promise of an easier, yet more rewarding path. The people believed the challenger would deliver the bright future he promised. They could see it already glimmering in the distance. With smooth talk and a calming voice, he had mesmerized the masses and cast his glimmer spell upon them. The people were unable to resist, and with arms wide open, they welcomed the Glimmer Man, overwhelmingly rejecting the trusted leader and refusing his sage advice.

Three decades and nearly two years have passed since that fateful day in November of 1980. The mighty nation was, of course, the USA. The trusted leader was Jimmy Carter, and the Glimmer Man was none other than Ronald Wilson Reagan.

It was July 15,1979 when President Carter gave his now famous “Malaise” speech. The nation had been struggling with increasing dependence on foreign oil for two decades, hitting a tipping point when domestic oil production peaked in 1970. Our energy independence gone, our nation was held hostage, first by the Arab nations that cut off our oil supply in 1973, and then again during the Iranian Revolution in 1979 — this time not only closing the oil spigot but literally holding 52 Americans hostage. By the time of Carter’s speech, nearly half the oil consumed in the US had to be imported.

Our long post-war economic expansion had faltered; the unity that had so tightly bonded Americans had been lost in the bloody rice patties ofVietnam, and our rose-colored glasses, spotted by the assassinations of the 1960s, were shattered by Watergate in 1972. We saw our first trade deficit in 1971 and began an unending series of such deficits in 1976. Inflation soared to double-digits, as did the prime interest rate. Wages were stagnating, and for the first time in our history, people believed the future would be worse than the past. Americans were desperate for a victory, for some light at the end of the tunnel, for anything resembling good news.

But Carter didn’t have good news to share; he offered instead a choice between two paths: one focused on self-interest, and the other on common purpose. He presented the unadulterated facts of our situation, labeling energy dependency a “clear and present danger,” and warned that to ignore this truth was “a certain route to failure,” one that promised a “mistaken idea of freedom.”

President Carter shared an alternative that he claimed would lead to “real freedom.” He called Americans to “seize control again of our common destiny” and advocated doing so by first solving our energy problems. Carter set forth bold steps in his energy policy. He called for a windfall profits tax on oil companies, for investment in public transportation, to build energy conservation into our homes, and to reach a goal of 20% solar power by the year 2000. Most importantly, the President’s speech was a call to arms on the “battlefield of energy,” where every act of conservation would be “an act of patriotism.”

Ronald Reagan, former actor, both theatrical and political, appeared on the scene with a quite different, and highly attractive, alternative for the American people: he would cut taxes while also balancing the budget and simultaneously address energy dependence without conservation. According to Reagan, oil production was the answer to our energy woes, and high taxes the cause of our economic problems. Reagan raised high the specter of the dark Soviet empire, painted Carter to be a weak leader, and sold the American people on the notion that “government is not the solution to our problems; government is the problem.”

Telling the public exactly what they wanted to hear, Reagan easily won a popular majority, of which this author, a Democrat, was a member.

As president, he wasted no time attacking “the problem.” He moved to quickly implement the economic policies that his primary opponent and general election running mate, George H.W. Bush, had referred to as “voodoo economics.” Claiming that tax cuts for top income earners would “trickle down” for everyone else, Reagan’s Economic Recovery Tax Act of 1981 would cut the top marginal tax rate by 20% and drop the capital gains tax to 20% — the lowest level since the Hoover administration.

The net effect on federal revenues was a reduction of $268 billion over the next three years — as a share of GDP, the single largest cut in American history. In Reagan’s own words, he was treating the federal government like an “extravagant kid” who needed his parents to “cut his allowance.” By  Reagan’s second term, the “extravagant kid” prescription had become the signature political strategy of movement conservatism. Known as “starve the beast,” the plan would deprive government of revenue, which would then force spending cuts and the defunding of social programs.

Following a series of limited tax increases from 1982 through 1985, Reagan wielded his tax axe again during his second term. His Tax Reform Act of 1986 also earned it’s place in history as the only legislation, before or since, to simultaneously drop the top tax rate (from 50% to 28%) and raise the rate for the lowest income earners (from 11% to 15%). Not only was the beast to be starved, but so were millions of working Americans.

Unwavering in his faith in “trickle down economics,” Reagan was relentless in his support of the wealthy. Tax advantage was only one side of the ledger. Once the president of the Screen Actors Guild, where he was eventually pressured out of office in response to his pro-management positions, Reagan would wage a full scale war on labor during his presidency. Not only did he freeze the minimum wage and deal the most destructive blow ever delivered to American unions, when he fired 13,000 air traffic controllers in 1981, but he effectively changed the NLRB into an “Employer Relations Board” when he stacked the 5-member panel with a majority of management representation.

Of course, had the Reagan tax cuts been accompanied by corresponding cuts in spending, the American public might have been more aware of the toll taken by Reagan’s anti-labor polices.  But contrary to conservative myth, Reagan was as much spendthrift as tax slasher. He did cut funding for many social programs, including food stamps, education and the EPA. He hacked Medicaid and slashed federal assistance to local governments by 60%. But overall, Reagan was anything but fiscally conservative. During his two terms, federal spending would average 22.4% of GDP, well above the 40-year average of 20.7%, and the federal debt would swell to nearly $3 trillion, effectively tripling under Reagan’s fiscal leadership.

In retrospect, it’s rather obvious why so many people revere Ronald Reagan as such a great leader. With the entire nation suffering from some sort of collective amnesia regarding his record on the debt, what else could be expected when a president slashes taxes and simultaneously pumps trillions of dollars of federal stimulus into the economy? This is not to diminish his foreign policy record, where among other achievements, he must be given credit for his part in ending the Cold War.  But the real magic of the Reagan presidency came from his innate ability to capture the imagination of the American people, to lull them into believing what he wanted them to believe, regardless of the reality — with masterful stagecraft, to cast a spell and breathe life into an alternate reality that never really existed.

The harsh truth of Reagan’s legacy is that while the American people were under his spell, his actual handiwork was the crafting of a new form of politics that used the public’s natural patriotism and belief in the work ethic to gain the blind support of working people while giving all benefit to only the wealthiest among us.

Reagan appealed to our national vanity with his incantation of American exceptionalism, but did nothing to help the average citizen share in the prosperity. He nearly silenced the voice of organized labor, the movement that brought us the 40-hour workweek, the minimum wage and workplace safety. He abandoned Carter’s energy policy, the last to be adopted by any administration, and as a result relinquished control of our energy future to OPEC and other foreign nations. He put the pedal to the metal on military spending, skewed tax policy to advantage the rich, and tilted the economic playing field to such an extent that, as a nation, we may never recover.

All of what’s happened in the three decades since Reagan was elected cannot be blamed solely on his policies, but it goes without question that he is the creator-in-chief of the paradigm that made it all possible. He won election by contradicting the sage advice of Jimmy Carter and convincing the American people that no sacrifice would be needed, so long as we dealt with our “problems.” And then he did everything in his power to divert attention from both his budget deficits and the real “problem” — parasites of American wealth who use their influence to rig banking, trade and tax policy.

By conjuring up fictitious culprits, like his famous Cadillac-driving welfare queens, Reagan was able to sell a large segment of the populace on the notion that our economic woes were the result of lazy, untrustworthy miscreants, living large on the public dole. Sadly, the predisposition of many conservatives was justified by Reagan’s own messaging, and this particular blame-game became a form of muffled racism. Expressed mostly through dog whistle politics, the finger was pointed at all “others” — minorities of any stripe. It was this form of deceit that planted the fertile ground of economic hardship with the seeds of radical division that continue to grow today. Job losses, stagnant wages and a diminishing standard of living weren’t the fault of  profit seeking elites exploiting people and planet; it was all the fault of  “big government” supporting lazy loafers who milked the system.

In the time since Reagan was first elected, America has grown increasingly divided. With half of the population still under the Glimmer Man’s spell, believing that it isn’t poverty that’s “the problem” — it’s the poor, the scales continue to tip further and further in favor of the rich, and the toll is paid increasingly by working Americans, mostly by the vanishing middle class. Since 1979, two-thirds of all income gains have gone to the Top 1%. That exclusive group, which accounted for only 9% of all income in 1976, now rakes in a full 24% and claims more financial wealth than the bottom 95%. Meanwhile median household has remained essentially flat, and the United States has taken its place amongst the most economically unequal nations on the planet — worse than even Iran and China.

Is this unhealthy for an economy? Absolutely. When wealth becomes so overly concentrated, the middle class has insufficient funds to provide the demand for the goods and services that are essential for a consumer economy. Without sufficient demand, companies cut back, jobs are lost, demand weakens further, and the cycle repeats itself — a self-reinforcing death spiral without a bottom. If not for our serial economic bubbles, where lack of income was relieved with ever-increasing borrowing and debt, conservative voters might have been awakened from that glimmer spell cast all those long years ago. But such has not been the case. The bubbles have served to conceal the dire straits our nation must now navigate.

Following 30 years of shared prosperity, the Reagan era ushered in the age of extraction, where the rich get filthy rich and everyone else struggles to make ends meet. Ronald Reagan made the national debt a major campaign issue when he ran against Jimmy Carter —America needed a conservative to address this pressing issue. Yet, once elected, Reagan tripled the debt, and today it sits at over $15 trillion.

Carter warned us that we had to deal with dependency on foreign oil and set goals for energy efficiency and the implementation of wind and solar power. Reagan scuttled all plans for alternatives, and today we still import half of the oil we consume, while the planet sits at the precipice of global peak oil (the point at which total world oil resources go into terminal decline). The US has been without an energy policy since Carter, and today we waste nearly 60% of all energy produced through inefficiency, and we generate a whopping 4% of what we consume from wind, solar, hydro and geothermal combined.

Ronald Reagan may have ridden into Washington on a white horse, but what he was peddling was nothing more than snake oil. He sent us down the path Carter called “a certain route to failure,” and more than 30 years later, we’re still steaming full speed ahead into the abyss.

Three decades of blind support of business and dismantling of government has severely tilted the playing field and rigged the game against the average American. It was rigged banking that allowed Wall St. to bleed the American people for trillions of dollars of wealth. Rigged trade permitted the multinational corporations to send millions of jobs overseas. Rigged tax policy continually subsidizes the largest industries, requiring many to pay no income tax at all, and further enables massive concentration of wealth and power. Rigged elections ensure that the interests of the rich and powerful are always put in front of the wellbeing of our nation as a whole, and an increasingly rigged judiciary makes damn sure that the voice of average Americans is silenced.

As a result, our infrastructure is in disrepair and our education system is unable to meet our needs. Healthcare spending amounts to 17% of GDP,  with costs at more than double the OECD average and continuing to soar. Unemployment is still at rates almost unseen since the Great Depression. The debt is over $15 trillion. Upward mobility has been all but comepletely lost. Our unfunded liabilities are in the tens of trillions of dollars. We seem to be permanently at war. Gas prices are at $4 per gallon, and we have no solution for our energy problems.

Could this be the “mistaken idea of freedom” that Jimmy Carter warned us about?

One thing is certain: it’s hard to see how we could be worse off today had we listened to Carter’s sage advice. The issues that now plague our nation are reaching epidemic proportions, yet we’ve  become so polarized as a people that we’re entirely unable to work together in seeking real solutions. Discussion and analysis of our problems with the intent of identifying solutions isn’t even part of the conversation. We have become trapped in a partisan world controlled by the extremes, where positions are argued, but principles and values are trampled into the muddied ground of an ideological battlefield.

This division is the true legacy of the Reagan presidency. Where we were previously united in our efforts and earnestly sought after the common good, the Reagan doctrine taught that fragmentation and self-interest were appropriate responses to the issues we face. Win/win, shared properity, and an end to poverty were replaced with winners and losers, extraction and exploitation, Social Darwinism, and the survival of the most ruthless. Reagan gave those who needed someone to blame a target for their ire — anyone who’s different — and in so doing, drove an iron wedge into the American body politic.

Like a family that can’t deal with it’s problems, we’ve become a dysfunctional society. And as is typically the case, our dysfunction is rooted in our inability to effectively communicate. If we are to avoid further disaster, we must once again come together as a people, and the only way that happens is when we commit to an equal balance of inquiry and advocacy. We have to listen as well as speak, because it’s the only way to understand, and the only route to respecting our neighbors position is through understanding their perspective.

It’s time to be honest about the problems we face, time to stop arguing and start working together. It’s time to break the Glimmer Man’s spell, and in the words of Jimmy Carter, “seize control of our common destiny.” Most importantly, it’s time we recognize the greatest lie Reagan ever told: that “government is the problem.” The truth is that government is what we make it.

Government is the framework of rules we agree to live by and the vehicle with which we can achieve the otherwise impossible. Government is not “the problem” — the problem is broken government, and We the People are the solution.

The United States of America was founded on the principle of unity and of embracing the common good. “E pluribus unum” — out of many, one. This is the true source of our greatness. To the extent that we deviate from this principle, we work toward our own demise. We are the greatest nation in the history of our planet, but in order to remain great, we must sacrifice self-interest and embrace our common purpose, for this is the nature of true patriotism.

Enhanced by Zemanta