The Delusional Assumptions of Capitalism

by Robert Freeman

It’s easy to get fixated with small-bore issues on the economy, even if they don’t seem so small-bore at the time. Stimulus packages. Bailouts. Debt ceilings. Deficit commissions. Payroll tax-cut extensions. They seem like life and death issues while they’re being fought out.

But, in fact, they are distractions from the one real question that dominates all others, which is this: for whom should the economy be run? Should it be operated “to promote the general welfare” of 297 million people, the 99 percent? Or should it be run to benefit 3 million, the one percent?

Right now, the answer is that the economy is a machine, with the government as its operator, for transferring two hundred years of accumulated national wealth to those who are already the most wealthy, the one percent. And we should be clear about two things: this is a choice; and it’s working. The rich are getting much richer while everyone else is being stripped of their incomes, their assets, their retirement security, and all the elements of the social safety net enacted since the Great Depression.

Until we confront the fact that the collective impoverishment of the many for the selective enrichment of the few is a choice — the consequence of an explicit policy regime going back 30 years — nothing will change. But if we can muster the maturity to confront this fact, that we are here by choice, and find the courage to act on it, we might yet be able to save the country. If we do not, then we are surely lost.

To understand how we got here, we need to quickly review the economic history of the last sixty years. Then we can discuss what to do going forward.

At the end of World War II, the U.S. bestrode the world like a colossus. Its only industrial rival, Europe, had blown its brains out 30 years before, in World War I. And it did it again, in World War II, with Japan joining in. In the history of the world, there has never been such asymmetry in power between one country and all the rest.

It was U.S. capital that rebuilt its allies’ economies, through the Marshall Plan in Europe, and through military spending in Asia. U.S. factories boomed, to service not only its own vast and ravenous market, but those of all the rest of the world. All the equipment (and much of the food) to rebuild the industrial world came from America.

It was truly the Golden Age. There was enough wealth so that capital, labor, and government could all drink deeply from the seemingly inexhaustible spring of capitalism.

But by the 1960s something began to go wrong. Our allies’ economies had by then been rebuilt, and with the newest equipment and technologies. Theirs were more efficient than ours. The Volkswagens and Toyotas that would later become a tsunami began to trickle in. Same with the Sonys and Panasonics in consumer electronics. Shipbuilding, steel, machine tools, industrial electronics and other major industries began to migrate out of the U.S. and into the hands of foreign companies.

At the same time, the then-99% began to place serious claims on national resources, and to insist on being a player in major national decisions.

Johnson launched the Great Society program withthe goal of eradicating poverty. The women’s rights movement, the civil rights movement, the anti-Vietnam War movement, and the environmental movement all proved dramatically effective in redirecting national priorities and resources away from those favored by the wealthy elites and toward those of the rest of the people.

In other words, at exactly the time the profits of corporations were under assault by growing international competition, the people began to claim a greater share of society’s fruits. It couldn’t square. There was not enough output from the faltering economy to both satisfy people’s expectations of middle class affluence and economic security and capital’s demands for higher and higher returns. Something had to give.

Equally, the elites who had run the country for decades were indignant at the presumption of a mangy mob of un-bathed, pot-smoking, long-haired, bra-less, draft card-burning, tree-hugging hooligans who didn’t even have a job but wanted a seat at the table of national decision-making (sound familiar?). They were certainly never again going to allow such a scabrous cabal to decide that the country should not fight a major war (Vietnam) that was so enriching to the elites who had lied the country into it.

So the elites decided to take “their” country back.

The election of 1980 was the real watershed in modern American history. Ronald Reagan ran for president promising to cut taxes, increase military spending, and balance the budget — all at the same time. He called it “supply side economics.” His rival for the Republican nomination, George H.W. Bush, called it “voodoo economics” which, of course, it was. But people bought it and Reagan proceeded to rearrange economic power more substantially than at any time since Roosevelt enacted the New Deal.

Reagan cut marginal tax rates on the wealthy from 75% to 35%. At the same time, he dramatically increased military spending. The result was entirely predictable: with less money coming in but more going out, the government began to run massive deficits. Where Jimmy Carter’s worst deficit was $79 billion, Reagan was soon running deficits of $150 billion a year, year after year and increasing.

By 1992, the end of George H.W. Bush’s presidency, the annual deficit had reached $292 billion. In only 12 years, the supply side “revolution” had quadrupled the nation’s debt, from $1 trillion to $4 trillion. And this, in a time of peace and prosperity.

But that was always the hidden intention of supply side economics, to bind the nation to massive debts, debts from which it would never be released. Despite their sanctimonious pretenses, Republicans love debt because they are lenders. When there is more demand for debt, as when the government borrows hundred of billions of dollar a year, it commands a higher price, which is interest. This is simply supply and demand. And if you’re a lender, higher interest rates are better. This is why, even though Republicans controlled the White House for 26 of the past 40 years, they never once in any of those years produced a single balanced budget.

Clinton came to power in 1993 but proved an ambiguous leader, at least from standpoint of economics. He once described himself as “an Eisenhower Republican” which seems fair. He did raise marginal tax rates on the rich, but only from 36% to 39%. (They were at 75% under the real Eisenhower.) For this, he was pilloried as a socialist. Worse, after the fall of the Soviet Union he cut military spending as a percent of GDP to the lowest level since before Vietnam.

With lower military spending, slightly higher taxes on the rich, and a technology-driven economic boom, Clinton was able to pay down the deficits left to him by Bush I. By 1997, the government actually produced budgetary surpluses, the first since the 1960s. The consequence was a 40% fall in long term interest rates. Again, it was simply supply and demand. With less demand for borrowed money, rates fell.

This is the real reason Clinton was so relentlessly hounded by the right. It wasn’t because he was being serviced by a stalking intern, though he played into that one with astonishing recklessness. It was because he interfered with the three primary mechanisms for transferring wealth to the already-wealthy: tax cuts, massive military spending, and skyrocketing national debt.

The rest of Clinton’s economic legacy is far less positive. He pushed through NAFTA, pitting blue collar workers from the industrial Midwest against workers in Mexico making $1 an hour. He “ended welfare as we know it,” destroying an essential element of the social safety net. He enacted telecommunications “reform” that ended up as grotesque consolidation in the nation’s media, to where five companies now control more than 80% of the nation’s media.

But by far the most damaging of Clinton’s economic accomplishments was the deregulation of the finance industry. He overturned Glass-Steagall, the Depression-era law that separated commercial and investment banking. Together with his deregulation of derivatives, what Warren Buffet called “financial weapons of mass destruction,” this opened the economy to what would be the financial mad house of the first decade of the twenty-first century.

George W. Bush took office in 2001 and would serve the very wealthy in six important ways. First, he cut their taxes substantially, first in 2001 and again in 2003. Over their life, the Bush Tax Cuts for the top 1% will cost more than it would take to restore Social Security to solvency forever.

Second, he massively increased military spending with his fraudulently-justified and incompetently-prosecuted War in Iraq, and his equally-over-hyped and phony Global War on Terror.

As with Reagan, these two actions produced his third gift to his “base,” as he called the rich: massive deficits. He turned Clinton’s budget surpluses into deficits within one year. He would eventually double the national debt in only eight years, from $5.6 trillion to $12 trillion.

Fourth, he helped major industrial corporations move some seven million high paying manufacturing jobs out of the country, to low-wage countries where they could pay less for labor while putting downward pressure on American wages.

Fifth, he turned a blind eye as the financial industry carried out one of the greatest economic frauds in American history: the housing bubble.

Bush’s ideological soul-mate, Alan Greenspan, Chairman of the Federal Reserve, held interest rates at historically low levels to induce a boom in housing. This created illusory “wealth” that served to distract and pacify the working class as their jobs were being shipped overseas. He turned a blind eye to massive fraud in mortgage lending so that busboys, bartenders, gardeners, and day workers could buy homes they could never hope to afford. And he encouraged the securitzation of mortgages so that banks could offload the toxic sludge to unsuspecting buyers around the world. It was all so carefully engineered.

However, as had happened in the 1960s, something started to go wrong. Incomes began to fall as jobs were shipped overseas. The Iraq war caused oil prices to jump from $26 a barrel the day Bush took office to over $100 a barrel. It was a massive gain for the oil companies, his family’s business, but the inflationary effect coursed through everything in the economy. The busboys couldn’t make the notes on their houses, so started unloading them. But there were no “greater fools” left to buy them so prices started a downward avalanche which is still under way.

Since the height of the bubble in 2006, more than $8 trillion of housing wealth has been wiped out. Eleven million homes have been lost to foreclosure. More than one in four mortgages are underwater, with more owed on them than the home is worth. The share of home equity owned by homeowners themselves is now at the lowest level it has been since World War II. The balance has been transferred from the owners to the mortgage holders, the banks.

But the banks, in an almost psychotic orgy of greed, had leveraged their equity 30-to-1. They borrowed 30 dollars for every one dollar they held in capital. It makes for prodigious profits when prices are rising. If they go up only 3% (1/30) you double your investment! But if prices fall by 3%, your capital is wiped out. That is what actually happened. Housing prices, inflated far beyond what a rational market could bear, fell for the first time in American history. The banks went bankrupt. That was the financial collapse of late 2008.

Fortunately for the banks, Bush and his Treasury Secretary, Henry Paulson, formerly head of Goldman Sachs, were there to bestow the sixth and greatest gift on the wealthy: they bailed out the banks and their owners.

They arranged for the Treasury and the Federal Reserve to buy the banks’ toxic sludge so they wouldn’t have to take any losses on it. They paid 100 cents on the dollar for crap securities that that couldn’t fetch 20 cents on the dollar in open markets. They gave the banks trillions of dollars of loans at effectively no interest. And they allowed the banks to print trillions of dollars which they then used to inflate commodity and stock markets around the world, greatly enriching their wealthy owners.

What Bush and company didn’t do was require any givebacks from the banks. No equity. No firings. No changes in bonuses. No regulation of explosive derivatives. No restructuring of “too big to fail.” No settlements with consumers for intentionally defective mortgages. No re-investment in the economy they had plundered. And certainly, no prosecutions for any of the willful perpetrators of the Greatest Economic Collapse Since the Great Depression.

By 2009, Obama inherited an economy in free fall, for which he is perhaps owed some sympathy. But his policy responses have been inept at best, complicit at worst. He carried through with Bush’s bailout of the banks, passed phony “financial reform” which changed nothing, and studiously refused to prosecute any wrong-doing. He pushed through a tepid stimulus package where fully one third went to tax cuts for the wealthy. And he groveled to get a payroll tax cut that, in fact, does more to damage Social Security than anything any Republican president has ever managed.

In many other ways, however, he has proven to be Clinton II, or Bush III. He staffed his economic team with the very intellectual lights — Robert Rubin, Larry Summers, Tim Geithner, Ben Bernanke — who had engineered the Collapse, ensuring that capital’s right to pillage would not be qustioned. He went back on his word to fight for a public option that would have lowered the cost of health care insurance. He waved through the Bush tax cuts, not once but twice.

He never attempted anything so ambitious as a Rooseveltian jobs program. He made sure the Copenhagen climate talks failed so as to not burden American industrialists. He more than tripled Bush II’s deficits. And in his most damning assault on the economic security of more than 80 million Americans, he “put Social Security on the table” as part of his budget negotiations. With “friends” like this we should pray for enemies. At least we would know them for what they are.

Which brings us to today.

Over 56 million people are in poverty. The Census Bureau reports that half of all Americans (!) are in or near poverty. Almost 30% of those in the middle class have fallen out of it, and the rate of collapse is accelerating. A smaller share of men have jobs today than at any time since World War II. The past ten year’s wage gains have been the worst for any ten year period in the nation’s history, even worse than during the Great Depression.

The national debt that stood at $1 trillion when Reagan took office now exceeds $15 trillion. Debt as a percent of GDP is higher than it was in 1929, the year before the Great Depression. Meanwhile, corporate profits are at record highs, with corporations sitting on $2 trillion in cash, not investing it in the economy. They have $1.3 trillion parked in offshore tax havens like the Cayman Islands, out of reach of U.S. tax collectors.

Who could have imagined we could have fallen so far, and so quickly? Actually, in retrospect, it all makes sense. As wealth was steadily transferred upward and incomes were undermined, the damaging effects were masked by increased recourse to debt, both public and private. And the debt itself served to both accelerate and consolidate the transfer. But eventually the burden of payments became too much for an enfeebled workforce to carry and the whole thing came crashing down.

Any meaningful recovery will require a major investment by the federal government. The combination of lost incomes and lost consumer wealth have undercut the ability of consumers to generate demand, leaving the government as the only agent in the economy with the capacity to do the job. Clearly, private markets are not going to do it. Indeed, corporations have learned how to prosper mightily by crushing their American workers, a truly dysfunctional state of affairs that cannot stand.

The government should invest in the nation’s infrastructure which the American Society of Civil Engineers rates a “D”, down from “D+” only three years ago. This would employ potentially millions of now-unemployed workers, turning unemployment checks into tax payments to the Treasury. It would also bring the platform on which all the rest of the economy operates up to twenty-first century standards. Fortunately, the government can borrow long term at 2%, a fraction of the payback from such investments.

I’ve written elsewhere about a Manhattan Project-like investment in a green economy. Such an investment would revive employment, restore American competitiveness, help pay down the national debt, reduce our crippling dependency on middle east oil, and reduce carbon emissions into the environment. In all of these ways, it would be a win for virtually everybody in the economy, everybody in the nation, and for much of the planet.

I say “virtually” because it would not benefit those who have wrecked the economy and profited so mightily in the process: the money lenders, who would see less demand for borrowed money; the weapons makers, who would face a less hostile world; and the oil companies, whose crippling grip on the economy would be reduced. And we shouldn’t have any illusions about how hard these forces will fight to ensure that nothing changes. They will, and unless we fight back, well, nothing will change.

It is important to state once again that virtually all of the predation, all of the plunder of the last thirty years has been a policy choice, primarily enacted by Republicans, but more and more abetted by Democrats who have thrown in for a piece of the action. It’s also important to understand that nothing has changed in carrying out the agenda. Obama is as much about true “Hope” and “Change” as Bush was about “Compassionate Conservatism.” In fact, he and his wealthy masters are accelerating the looting.

Military spending is still growing at almost double digit rates after a decade of such increases. He is clearly going to put the knife into Social Security and Medicare when re-elected. He clearly has no plan, no “grand narrative” to restore the nation to prosperity. He clearly will not, can not, go after the banking industry, his biggest underwriter. And he gives all the signals of starting a war with Iran, which will make Iraq look like a silly child’s board-game gone awry.

The wealthy elites, fronted by Obama, have effectively abandoned the U.S. economy and the American people who are trapped inside. What this means is that the elections of 2012 are the last chance for the American people to reclaim their economic security, to fight off the neo-feudal servitude that is being foisted on them, and reclaim their political self-determination. As you can see from the above, most of the damage to the economy is the result of political decisions made to carry out nefarious economic ends. And they’ve worked.

We desperately need to elect a reliably progressive Congress to serve as an effective counterweight to the hopelessly corrupt, craven, and cowardly Obama and company. We need to demonstrate that it is people, not money, and not rigged voting machines, that still matter most in American elections. We need every man, woman, and child on deck with a sense of existential urgency that if we do not reclaim our country now, it will be lost forever. For it will.

In the American Revolution, Thomas Paine declared, “We have the chance to make the world anew.” He was thinking of the escape from the European world of economic feudalism, social privilege, and political autocracy. Today, we have one last chance to save that “new world” from the retrograde civilization it pulled itself out of, but whose claim on it has never been renounced.

If we can muster a Paine-like courage to fight and win this new Revolution, the Revolution to Save the Country, we shall be worthy of respect equal to that which we reserve for Paine and his fellow Founders. If we do not, we will get what we deserve. As with so much of the past thirty years, it’s our choice.

Robert Freeman teaches history and economics at a public high school in northern California. He is the founder of One Dollar For Life, a national non-profit that helps American schools build schools in the developing world with donations of one dollar. He can be reached at robertfreeman10@yahoo.com.

by Bill Quigley

“Our nation, so richly endowed with natural resources and with a capable and industrious population, should be able to devise ways and means of insuring to all our able-bodied men and women, a fair day’s pay for a fair day’s work.” Franklin Delano Roosevelt, 1937

Millions of people in the US work and are still poor. Here are eight points that show why the US needs to dedicate itself to making work pay.

One. How many people work and are still poor?

In 2011, the US Department of Labor reported at least 10 million people worked and were still below the unrealistic official US poverty line, an increase of 1.5 million more than the last time they checked. The US poverty line is $18,530 for a mom and two kids. Since 2007 the numbers of working poor have been increasing. About 7 percent of all workers and 4 percent of all full-time workers earn wages that leave them below the poverty line.

Two. What kinds of jobs do the working poor have?

One third of the working poor, over 3 million people, work in the service industry. Workers in other occupations are also poor: 16 percent of those in farming; 11 percent in construction; and 11 percent in sales.

Three. Which workers are most likely to be working and still poor?

Women workers are more likely to be poor than men. African American and Hispanic workers are about twice as likely to be poor as whites. College graduates have a 2 percent poverty rate while workers without a high school diploma have a poverty rate 10 times higher at 20 percent.

Four. What about benefits for low wage workers?

Ten percent of US workers earn $8.50 an hour or less according to the US Department of Labor. About 12 percent have health care and about 12 percent have retirement benefits. Nearly one in four get paid sick leave and less than half get paid vacation leave.

Five. What rights do the working poor have?

Most workers have a right to earn at least the federal minimum wage of $7.50 an hour. Tipped employees are supposed to get at least $2.13 each hour from their employer and if the worker does not earn enough in tips to make the $7.50 minimum wage, the employer must make up the difference. People who work more than 40 hours in a workweek are entitled to one and one-half of their regular pay for each hour of overtime.

Six. What about wage theft from the working poor?

Many low wage workers have part of their earnings stolen by their employers. Examples include not paying people the full minimum wage, not paying required overtime, stealing from tipped employees, or fraudulently classifying workers as independent contractors. A survey of over 4000 low wage workers in Chicago, Los Angeles and New York conducted by university and non-profit researchers found: 26 percent of the workers were paid less than the minimum wage in the previous week, a majority were underpaid by more than $1 an hour; a significant number worked overtime the previous week and were not paid the legally required overtime; many were required to come early or stay late and work “off the clock” and were not paid for it; almost a third of the tipped workers were not paid the minimum wage and more than 1 in 10 tipped workers had some of their money stolen by their employer or supervisor.

Seven. What is a living wage in the US?

Dr. Amy Glasmeier of Penn State University has created a Living Wage Calculator that estimates the hourly wage needed to pay the cost of living for low wage families in the US. It breaks down the cost of living by state and locality across the nation. In New Orleans, a mom with one child needs to earn $17.52 to make ends meet. In New York, the mom with one child should earn $19.66 to make it. If we now realistically calculate the number of people who work and do not earn a living wage, the numbers of working poor in the US skyrocket to several tens of millions.

Eight. What about jobs for the unemployed and underemployed?

The US Labor Department estimated recently that 13 million people were unemployed. Another 8 million people were working part-time but wanted full-time work. Even more millions who are not working are not counted in those numbers because they have been unemployed so long.

A study by Northeastern University found that in the poorest families, unemployment is nearly 31 percent. Underemployment is also much more of a problem in poor homes, with over 20 percent of those workers reporting they are working part-time but seeking full-time work.

Our nation can do so much more. We say our country values work. It is time to do something about it.

If the US truly values work, we need to support the millions of our sisters and brothers who are low wage workers. Steps needed include: raising the minimum wage to a living wage; protecting workers from getting ripped off; making it easier for workers to organize together if they choose to; and creating jobs, public jobs if necessary, so that everyone who wants to work can do so. Many are already working on these justice issues.

For those interested in learning more about this, see the websites of Interfaith Worker Justice, the National Employment Law Project, and the National Jobs for All Coalition.

Bill teaches law at Loyola University New Orleans and is Associate Legal Director of the Center for Constitutional Rights. Thanks to Rob Dordan and Kim Bobo for help with this. A version with sources is available. You can reach Bill at quigley77@gmail.com

Bill Quigley is Associate Director of the Center for Constitutional Rights and a law professor at Loyola University New Orleans. He is a Katrina survivor and has been active in human rights in Haiti for years. He volunteers with the Institute for Justice and Democracy in Haiti (IJDH) and the Bureau de Avocats Internationaux (BAI) in Port au Prince. Contact Bill at quigley77@gmail.com

by Russell Mokhiber

Politico is out this morning with a glossy State of the Union edition with this cover story headline – “The Worst Ever? Extreme Fighting. Public Scorn. Can Congress Sink Any Lower?”

That of course raises the question – Can Politico Sink Any Lower?

The Politico cover story, written by Jonathan Allen, not once mentions the corrupting influence of big corporate money as a reason for Congress’ poor approval rating.

But then again, guess who is paying for Politico?

Splashed across pages 24 and 25 is an ad from military contractor Lockheed Martin with a picture of The Armed Aerial Scout 72X helicopter – “carrying a 2,300 pound mission payload.”

On page 9 is a full page ad from Boeing and Bell Helicopter promoting the troubled tiltrotor V-22 Osprey.

The back cover is brought to you by none other than the vampire squid Goldman Sachs.

Inside the front cover is paid for by your friends at the American Hospital Association.

And page 10 by Toyota.

And then on page 15 is a picture of a dog with the headline – “Some say that if you need a friend in Washington, you should get one of these.”

“We beg to differ.”

“We help our clients succeed in Washington through advocacy advertising. Issues and reputation management. And digital engagement.”

The ad’s sponsor?

The public relations firm Ogilvy.

The key words?

“Reputation management.”

Politico is held in high esteem in Washington.

It’s considered the go to publication for the power elite.

But in fact, it’s just as corrupt as the Congress it covers.

Money in, product out.

That’s why you won’t see columnists advocating for deep cuts in military spending.

Lockheed, Boeing and Bell Helicopter wouldn’t approve.

Or for the corporate death penalty for those who rip off the government.

The American Hospital Association wouldn’t approve.

Or for an all out assault on corporate crime.

Ogilvy’s clients wouldn’t approve.

After all, what bigger hit to corporate reputation is there than a corporate criminal conviction?

Manage that.

© 2012 Corporate Crime Reporter
http://www.corporatecrimereporter.com/

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. He is also founder of http://singlepayeraction.org, and editor of the website Morgan County USA.

Mitt Romney, who wants talk of income inequality confined to “quiet rooms,” admits he’s spent the last decade living mostly on investments and paying less than half the taxes that would apply to a salary, just one more example of why the rich keep getting richer, as Bill Moyers and Michael Winship observe.

By Bill Moyers and Michael Winship

If you’re part of the one percent, even getting fired comes with a cushion made of eiderdown. GMI, a research company that gets paid to keep an eye on such things, just issued a study headlined, “Twenty-One U.S. CEOs with Golden Parachutes of More than $100 Million.” That’s each.

The report’s authors, Paul Hodgson and Greg Ruel, write, “These 21 CEOs walked away with almost $4 billion in combined compensation. In total, $1.7 billion in equity profits was realized by these CEOs, primarily on the exercise of time-vesting stock options and restricted stock.”

This news came the same day as another report, this one from Indiana University, titled, “At Risk: America’s Poor during and after the Great Recession.” Its researchers conclude:

“The number of people living in poverty is increasing and is expected to increase further, despite the recovery. The proportion of people living in poverty has increased by 27% between the year before the onset of the Great Recession (2006) and 2010… Poverty is expected to increase again in 2011 due to the slow pace of the economic recovery, the persistently high rate of unemployment, and the long duration of spells of unemployment.”

In fact, the white paper finds that we now have the largest number of long-term unemployed people in the United States since records were first kept in 1948 – four million report they’ve been unemployed for more than a year. Not necessarily counting the former CEO’s gently floating to earth from those golden parachutes.

So no, Mitt Romney, when we say that Americans are waking up to the reality that inequality matters, we’re not guilty of “envy” or “class warfare,” as you claimed to Matt Lauer on NBC’s Today. Nor are we talking about everybody earning the same amount of money – that’s the straw man apologists for inequality raise whenever anyone tries to get serious.

We’re talking what it takes to live a decent life. If you get sick without health coverage, inequality matters. If you’re the only breadwinner and out of work, inequality matters. If your local public library closes down and you can’t afford books on your own, inequality matters. If budget cuts mean your child has to pay to play on the school basketball team, sing in the chorus or march in the band, inequality matters. If you lose your job as you’re about to retire, inequality matters. If the financial system collapses and knocks the props from beneath your pension, inequality matters.

Neither one of us grew up wealthy, but we went to good public schools, played sandlot ball at a good public park, lived near a good public library, and drove down good public highways – all made possible by people we never met and would never know. There was an unwritten bargain among generations: we didn’t all get the same deal, but we did get civilization.

Now the bargain’s being shredded. The people we met from Occupy Wall Street get it — you could tell from their slogans. One of the younger protesters wore a t-shirt emblazoned with the words: “The system’s not broken. It’s fixed.” That’s right – rigged.

And that’s why so many are so angry. Not at wealth itself. But at the powerful players who win by fixing the game instead of by honest competition; at the crony capitalists who resort to tricks, loopholes, and cold cash to make sure insiders prosper – and then pull up the ladder behind them.

Americans are waking up to how they’re being made to pay for Wall Street’s malfeasance and Washington’s complicity – paying with stagnant wages and lost jobs, with slashing cuts to their benefits and social services. To how our financial system profits by moving money around in exotic ways instead of supporting real economic growth.

Waking up to the ludicrous Supreme Court decision defining a corporation as a person, although it doesn’t eat, breath, make love or sing – or take care of children and aging parents. Waking up to how unlimited and often anonymous campaign contributions corrupt our elections; to the fact that if money is speech, no money means no speech. As one demonstrator’s sign read: “I couldn’t afford a politician, so I bought this sign.”

So while police have cleared many Occupy encampments, a collective cry, loud and clear, has gone up from countless voices across the country: Enough’s enough.

We won’t know for a while if what we’re hearing is a momentary cry of pain, or whether it’s a movement – like the abolitionists and suffragettes, the populists and workers of another era, or the civil rights movement – that gathers forces until the powers-that-be can no longer sustain the inequality, injustice, and yes, immorality of winner-take-all politics and a winner-take-all economy.

Bill Moyers is managing editor and Michael Winship is senior writer of the new weekly public affairs program, “Moyers & Company,” airing on public television. Check local airtimes or comment at http://www.BillMoyers.com.

http://consortiumnews.com/

The Republican position on inequality rests on five statements, all false.
by David Morris

Recent comments by Mitt Romney, the probable Republican nominee for President all but guarantee the inequality issue will remain front and center this election year.

When asked whether people who question the current distribution of wealth and power are motivated by “jealousy or fairness” Romney insisted, “I think it’s about envy. I think it’s about class warfare.” And in this election year he advised that if we do discuss inequality we do so “in quiet rooms” not in public debates.

A public debate, of course, is inevitable. And welcome. To help that debate along I’ll address the five major statements that comprise the Republican argument on inequality.

1. Income is Not All That Unequal

Actually it is. Since 1980 the top 1 percent has increased its share of the national income by an astounding $1.1 trillion. Today 300,000 very rich Americans enjoy almost as much income as 150 million.

Since 1980, the income of the bottom 90 percent of Americans has increased a meager $303 or 1 percent. The top 1 percent’s income has more than doubled, increasing by about $500,000. And the really, really rich, the top 10th of 1 percent, made out, dare I say, like bandits, quadrupling their income to $22 million.

Meanwhile a full-time worker’s wage was 11 percent lower in 2004 than in 1973, adjusting for inflation even though their productivity increased by 78 percent. Productivity gains swelled corporate profits, which reached an all time high in 2010. And that in turn fueled an unprecedented inequality within the workplace itself. In 2010, according to the Institute for Policy Studies, the average CEO in large companies earned 325 times more than the average worker.

2. Inequality doesn’t matter because in America ambition and hard work can make a pauper a millionaire.

This is folklore. A worker’s initial position in the income distribution is highly predictive of how much he or she earns later in the career. And as the Brookings Institution reports “there is growing evidence of less intergenerational economic mobility in the United States than in many other rich industrialized countries.”

The bitter fact is that it is harder for a poor person in America to become rich than in virtually any other industrialized country.

3. Income inequality is not a result of tax policy.

Nonsense. A painstaking analysis by economists Thomas Piketty, Emmanuel Saez and Stefanie Stantcheva found “a strong correlation between the reductions in top tax rates and the increases in top 1% pre-tax income shares from 1975–79 to 2004–08”. For example, the U.S. slashed the top income tax rate by 35 percent and witnessed a large ten percent increase in its top 1% pre-tax income share. “By contrast, France or Germany saw very little change in their top tax rates and their top 1% income shares during the same period.”

4. Taxing the rich will slow economic growth

An examination of 18 OECD countries found “little empirical support for the claim that reducing the progressivity of the tax code has spurred economic growth, business formation or job growth”.

Indeed, Piketty, Saez and Stantcheva’s rigorous analysis came to the opposite conclusion. Our economy may be growing more slowly because we are taxing the rich too little, not too much. Economists Peter Diamond and Saez estimated the optimal top tax rate, that is the tax rate that would maximize revenue without slowing economic growth, could be as high as 83 percent.

Redistributing income stimulates economies in part because when 1% make more they save whereas when the 99% make more they spend. As a result, according to Mark Zandi, chief economist for Moody’s, a dollar in tax cuts on capital gains adds .38 cents of economic growth while a dollar in unemployment benefits gives the economy a boost of $1.63 and a dollar of food stamps adds $1.73.

5. Taxing the rich would not raise much money

Of course it would. If only the richest 400 families, whose average income in 2008 was an astounding $270 million actually paid the statutory rate of 39 percent (revived as of next January 1st) an additional $500 billion would be raised over 10 years, putting a substantial dent in the projected deficit.

In 2010 hedge fund manager John Paulson made $5 billion. That year, according to Pulitzer Prize winner David Cay Johnston, Paulson paid no income taxes. Am I envious Mr. Romney? You bet I am. But I’m also angry at the stark injustice of it all. And terrified of the power such wealth can wield in a country that allows billionaires to spend unlimited sums influencing legislation and elections.

A recent survey by the Pew Research Center found that two-thirds of Americans now believe the conflict between rich and poor is our greatest source of tension. I agree. It is a conflict that deserves to be aired fully and in public.

http://www.youtube.com/watch?v=Fdj_7P2Do5M&feature=player_embedded

This work is licensed under a Creative Commons License
http://www.ilsr.org/

David Morris is Vice President and director of the New Rules Project at the Institute for Local Self-Reliance, which is based in Minneapolis and Washington, D.C. focusing on local economic and social development.

by Thomas S. Harrington

Have you ever spoken to someone who lived through a fascist regime? If and when you do, you might be surprised at what you hear. When they get talking, most people who lived through Mussolini’s Italy, Franco’s Spain, Salazar’s Portugal. Videla’s Argentina, Vargas’s Brazil or Bordaberry’s Uruguay paint surprisingly benign pictures of daily life in those places. [Benito Mussolini (center), addresses the Council of the Fascists at the Adrian Theatre in Rome in 1941. (File Photo)]

Most Americans who’ve lived abroad have, at one time or another, had the experience of talking with a foreign friend who, though never having lived in the US, is pretty well convinced that they understand the cardinal elements of our culture. Why?

Because for years, that person has consumed a non-stop diet of Hollywood movies and TV programs.

When, after fully acknowledging cinema’s great value as a tool of cultural knowledge, you try and let them know there are many important social realities this medium cannot convey, they often become annoyed or indifferent.

They have their story and they are going to stick with it.

It seems to me that our culture’s relationship to fascism is not all that different than this.

Over the last sixty or so years, Hollywood has given us constant stream of images about life under authoritarian regimes. As a result, most Americans are generally pretty confident of their ability to not only recognize its basic contours, but also that they would “do the right thing” should the authorities begin pursuing their neighbors for no good reason.

Of course, this presumes that fascism almost always looks the way Hollywood, with its intense Germanic fixations and penchant for clean morally unambiguous story lines, tells us it does, you know, with armed checkpoints, draconian curfews, dimly-lit streets, grey skies and a complete absence of joy.

But of course, fascism has never consistently or even predominantly manifested itself in daily life the way Hollywood has told us it does, even in the occupied territories of the Third Reich.

If you have any doubts about this, read the account of life in Nazi-occupied Paris written by Carles Fontseré. In it, we see an exiled Catalan Republican Anarchist (could there be any human profile any more apt for harassment and extermination by convinced Nazis?) earning a living in the French magazine and publishing industry, regularly interacting—often quite cordially--with German officers while partying and having regular sexual trysts in his off-hours.

Am I saying occupied Paris (or any other fascist space) was a carnival or that the Nazi regime was not brutal or violent? Absolutely not.

Rather, I am suggesting that contrary to what Hollywood has taught us, those who run authoritarian regimes often go to great lengths to preserve most elements of complexly embroidered fabric of “dailyness” in the societies they control. The reason is obvious: to do otherwise is run the risk of provoking overt anger and rebellion from those being manipulated and oppressed.

Do you think most people were reduced to constantly skulking from back street to back alley or that they stopped going on summer vacation, drinking wine and making love during the Argentine Dirty War?

On the contrary, at the very time its agents were pulling out fingernails and waterboarding people at the ESMA detention center in Buenos Aires and chucking cement-weighted bodies into the Atlantic from helicopters, the Argentine regime hosted the World Cup of Soccer, one of the world’s great tourist celebrations!

“A good time was had by all!” That is, all except the tortured and the disappeared.

Well, if Fascism seldom announces itself the way Hollywood taught us it would, if the dimension of its terror and destruction is, almost by design, beyond the ken of the vast majority of the population caught up in their daily concerns, what can we do to combat it?

Most of all we must shift our thinking from the realm of the anecdote and the visually powerful vignette to that of analytical rigor.

Human beings possess an incredibly strong tendency to deny malfeasance among what they consider to be their “own” social group, be it familial or communal or national. And in their drive to deny the sins of their clan, they will avail themselves of whatever materials they can to preserve their sense of moral intactness and/or superiority.

In this context, having an institutionalized vision of authoritarian evil that located far away from one’s own place—both geographically and temporally—is extremely “useful” in psychological terms.

The existence of this widely internalized “distant” vision of evil, which is seen—quite incorrectly—as representing fascism in more or less comprehensive terms, has the effect of placing an absurdly heavy burden of proof upon those wishing to open a discussion about the existence of this social tendency here and now.

When critics allege or even suggest the existence of a type of fascism in today’s America their interlocutors often “refute” the charge by insisting that the accuser demonstrate the existence here and now of ALL known tropes of the “distant” version of the social plague.

When he cannot, they summarily declare our society free of the disease and go back to whatever it was they were doing.

“Yes, I know that habeas corpus is gone, that the officer class in the military is more loyal to the own caste and the Republican party than the Constitution, that there is an incestuous alliance between big business and government, that systemic critiques of the nation’s core foreign policy goals are not tolerated within mainstream political discourse, that spying and informing on innocent citizens is rampant, that there is a small army of intelligence operatives carrying out “patriotic” missions that will never be subject to any public scrutiny never mind public sanction, that clearly illegal acts or torture and domestic espionage have been retroactively immunized by congress with the full complicity of both parties, that the president is now openly murdering US citizens, but there are still no jackboots in the streets!

Imagine if your physician worked this way? “Yes, though you have 8 of the 10 attributes associated with this dangerous disease, we’re only going to concentrate on the 2 symptoms you don’t have and give you full medical clearance!"

For those truly interested in pursuing an analytical approach to the question, there are tools available. The historian Robert Paxton has given us a splendid start with his Anatomy of Fascism. In it, he describes fascism as “A form of political behavior marked by obsessive preoccupation with community decline, humiliation or victimhood and by compensatory cults of unity, energy and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion.'' Lawrence Britt has also provided a useful framing device with his succinct “Fourteen Defining Characteristics Of Fascism” (http://www.rense.com/general37/fascism.htm).

So the next time you want to bring up the subject of fascism, cut to the quick. Instead of letting your friend lead you on an intellectual scavenger hunt whose only real purpose is to rule out the possibility that the disease might be present among us, put the onus him or her.

Ask instead how, in the light of Paxton’s and Britt’s definitions, the US isn’t a fascist society? If nothing else, the results of the conversation are likely to be far more instructive than the usual self-congratulatory avoidance we usually get on the question in these latitudes.
Thomas S. Harrington

Thomas Harrington is a professor of Iberian Studies at Trinity College in Hartford, Connecticut.

by Doug Harvey

I once asked a Native American if he thought whether North America was in any way in a post-colonial period. His response was, “Have they left yet?” Of the New World republics that came about as a result of colonization, the United States is going to have the hardest time dealing with its past. Recently, we’ve see a lot of people willing to strut about with their guns and imagine themselves in some pre-pubescent fantasy of John Wayne’s “unbridled individualism.” Some become so deluded as to be willing to use these guns on perceived “enemies.” But this is symptomatic only; it is useful to remember how the actual land of North America came to be claimed by European and Euro-American colonists. More importantly, the causes of these neuroses can be better understood when one realizes what separating people from their resource base means.

For over ninety-nine percent of human history, the earth and its human offspring were united. Humans were unique in the degree to which we could fashion natural products into useful items. With our minds, hands, and intuition we made the stuff of the earth more useful to us. Nothing stood between us and our resources – we were immersed in our environment and what we did to improve our surroundings and make our lives better we ourselves enjoyed. As the Thoreau disciple and wilderness advocate Bradford Angier once pointed out, “The hardest part about roughing it is smoothing it.” We were pretty good at “smoothing it.” Even cave paintings, figurines, Petroglyphs and the like helped people to understand their relationship with the world into which they had emerged. Contrary to the assumptions of the old “Whig” histories, people were generally time-rich – indeed, they could easily make more than they needed. These surplus goods could be traded for others’ surplus goods and the fruits of individuals’ skills could be shared. At some point someone began to think about accumulating these surplus goods. How, the calculating mind asked, might I enjoy these manufactures and the potential wealth they represent without having to engage in this difficult work myself? Many methods were tried with varying degrees of success. But one that did work and continues to work was coercion – physical, political, legal, economic – forcing a wedge between people and their resource base (the land) and make their reunion with it conditional. The condition for this reunion with the “means of production” is a controlling cut of the wealth produced by the interaction of human and other-than-human nature.

This division between people and nature put us on a path many are beginning to question. Besides the sense of alienation being cut off from our natural relationships with the other-than-human world produces, we are separated from our own means of production. Now, instead of using our wits and our hands to mold the stuff of the earth into usefulness, we have to go to the bourgeois “owner” and ask him to buy our labor, since it is often all we have since being deprived of our access to resources. The bourgeoisie figured out that if you usurp the land and resources, you have control of interaction between human and other-than-human – also known as labor power, which is the only real power humans have.

This defense of the relationship between humans and their resources should in no way be construed as a defense of, say, corporate access to the minerals of the Grand Canyon or oil in the Arctic. That is a looting of both nature and labor that I have discussed elsewhere. No, we have come so far down the path of exploitation of both human and other-than-human nature that assumptions and myths regarding the righteousness of this path remain unquestioned from the halls of power to the public discourse.

The surplus of useful goods that was often so abundant in pre-modern communities – under the influence of market-obsession, has acquired an exchange-value separate from its use. The result is “capital,” or surplus-value flowing to the bourgeoisie but which they themselves did not produce. Capital bought and still buys power and influence to entrench this economic system and heavily skew it toward the bourgeoisie – a sort of modern feudalism. A wedge was driven between people and their resources. Having been deracinated – alienated from their resources, homes, families, and livelihood – people had nothing to sell but their labor, and oftentimes the going rate was at starvation levels. In some regions where this deracination is at full throttle, many have chosen suicide over this type of slavery.

In North America, this separation of the land from the indigenous peoples took on an unprecedented scope. While there was certainly plenty of room in North America in 1492, there were still no fewer than five to ten million people who, in most respects, lived off the fat of an abundant land. Then, Europeans and unwilling and unwitting Africans came to the New World. With varying degrees, separating indigenous people from the land became an institution and was developed to the point of becoming a national myth: of course the Indians must be removed in the face of “progress” – removed or exterminated. Cold hard fact that it is we have yet to internalize this as a society; denial or ignorance of this history remains rampant in the U.S.

The denial becomes increasingly difficult as the separation of people from property takes on new dimensions, (if nothing else, the bourgeois class is very creative about accumulating wealth and power). Now, newcomers as well as descendents of the original colonizers – who themselves usurped the land – have found themselves being separated from their resources by a rigged system in which they have no say. Some might call this karma and that may be true, but it is certainly a continuation.

Working people took a stand in the U.S. from the Industrial Revolution to the post-World War II era and created the wealthiest working class in history. It was so successful that this working class took to calling itself the “middle class,” a democratization of the original turf held by the bourgeoisie and characterized by untitled wealth. Many people once again had a say in their relationship between themselves and their tools and resources. They did not go to the so-called “owner” with hat in hand begging to sell their labor, they collectively bargained with him to get a reasonable share of the surplus value they were producing. Some would say these negotiations were a gift to the bourgeoisie from producers who cut them more slack than they deserved. The abandonment of the American working class by the bourgeoisie, by their politicians, and even by their unions, has been nothing short of a betrayal and indeed a form of robbery.

The wealth accumulated by hook or by crook and used to manipulate the economy and political power structure is turned against the people who produced it. The old tried and true strategy of divide and conquer – white and blue collar, black and white skin, English- and Spanish-speaking, male and female, etc., etc., ad nauseum – so far still works. The financialization of the economy has turned Wall Street into a giant Las Vegas, operating – at least in part – independently of actual wealth production – subsidized and insured by taxing those who actually do produce wealth. It must keep moving fast, though, because something is gaining on it. The separation of workers from the wealth they produce; of workers from their resources; of humans from nature, is a contrivance that cannot last.

People are looking for that part of themselves that is connected to everything else. There is a deep cognitive dissonance in the U.S. resulting from a simple historical truth: wealth enjoyed by many American citizens came from resources acquired through systematic conquest and pillage. It makes it particularly hard to defend your resources on moral grounds when they were stolen to begin with. Much easier to deny or invent an alternative narrative.

Parasites often kill their hosts. To the extent that humans have become parasites, of labor and/or the resource base, we act for our own destruction. The short-term thinking institutionalized in this system is an indulgence we can no longer afford. One alternative to the path of exploitation remains vaguely familiar to us: the path of husbandry and cooperation. But alternative paths require introspection, a difficult facing of fears and facts and, finally, understanding what the relationship between humans and the earth means. As people have known for over ninety-nine percent of our history, the earth is literally our mother – our source of life. It is human nature to interact with our environment and treat it with the respect it deserves – as a part of ourselves. We act self-destructively when we assume the exploitative attitude of parasites. As with most problems, the answers are in the mirror, which is why they don’t get solved.

© 2012 Douglas S. Harvey
http://tenstring.blogspot.com/2012/01/nature-regards-itself.html

Doug Harvey is a historian and musician teaching, writing, and performing in the Kansas City area. He can be contacted at dharvey@ku.edu

For most people facing poverty today in the United States, the concept of America as the land of opportunity is just a fable.
by Salvatore Babones

America is becoming "a country where a shrinking number of people do really well, while a growing number of Americans barely get by," President Barack Obama declared during his State of the Union address.

The numbers back him up. Executive compensation and the poverty rate are both at or near all-time highs.

Surprisingly, it was Republican presidential candidate Rick Santorum who first made economic mobility an issue in the 2012 elections. Three months ago, he pointed out that children born to poor families rarely grow up to become rich, or even middle class.

"Believe it or not, studies have been done that show that in Western Europe, people at the lower parts of the income scale actually have a better mobility going up the ladder now than in America," he said during the October 19 Republican presidential debate in Las Vegas.

In early January, when The New York Times picked up on Santorum's comments and explored the fact that American incomes are increasingly immobile across generations, it made a big splash in the media. Now, Obama's aspiration to "restore an economy where everyone gets a fair shot" is going viral.

Santorum is right about mobility. Academic studies typically show that around 40-45 percent of income differences are transmitted from one U.S. generation to the next. This is about twice as high as the equivalent figures in Western Europe and Australia.

Unfortunately, American immobility is an even bigger problem than that.

In a highly technical report from the Federal Reserve Bank of Chicago, economist Bhashkar Mazumder shows that prior researchers have seriously underestimated the degree to which children inherit their parents' positions in society.

The new best estimate is that the intergenerational stickiness in income is around 60 percent. In other words, over half of a person's economic status in life is predetermined at birth.

Mazumder, the director of the Chicago Census Research Data Center, concludes that it would take an average of five generations for a family's offspring to rise from low income to middle income.

This doesn't mean that all of a poor family's descendants will be poor for six generations, but it does illustrate just how slowly family incomes change in America.

It wasn't always this way. Time was when opportunities for advancement in America were expanding, not contracting.

Another study from the Federal Reserve Bank of Chicago shows that intergenerational mobility increased continuously from 1940 to 1980. Only then did it start to fall.

By 2000 (the final year of the study covered), mobility in America was lower than where it had started in 1940.

Obama and Santorum are right to argue that the government has a responsibility to foster an economic environment that encourages intergenerational mobility. And the American people agree with them.

A 2011 poll from the Pew Charitable Trusts' Economic Mobility Project found that 83 percent of Americans "support a government role in promoting upward economic mobility."

The top three things Americans told Pew that the government should do? Provide all children with a quality education, promote job creation, and ensure equal opportunity — all of which Obama called for in his address.

In the end, the best way to promote upward mobility is to give people a helping hand. It's not enough to get government out of the way. Government can and should be part of the solution.

http://www.otherwords.org/articles/immobility_nation

Salvatore Babones is a senior lecturer in sociology and social policy at the University of Sydney and an associate fellow at the Institute for Policy Studies (IPS).

by Ted Rall

Reacting to and attempting to co-opt the Occupy Wall Street movement, President Obama used his 2012 State of the Union address to discuss what he now calls "the defining issue of our time"--the growing gap between rich and poor.

"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by," Obama said. "Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules."

No doubt, the long-term trend toward income inequality is a major flaw of the capitalist system. From 1980 to 2005 more than 80 percent in the gain in Americans' incomes went to the top one percent. This staggering disparity between the haves and have-nots has created a permanent underclass of underemployed, undereducated and alienated people who often turn to crime for survival and social status. Aggregation of wealth into fewer hands has shrunk the size of the U.S. market for consumer goods, prolonging and deepening the depression.

How can we make the system fairer?

Liberals are calling for a more progressive income tax: i.e., raise taxes on the rich. Obama says he'd like to slap a minimum federal income tax of 30 percent on individuals earning more than $1 million a year.

Soaking the rich would obviously be fair. GOP frontrunner/corporate layoff sleazebag Mitt Romney earned $59,500 a day in 2010--and paid half the effective tax rate (13.9 percent) than of a family of four earning $59,500 a year.

Fair, sure. But would it work? Would increasing taxes on the wealthy do much to close the gap between rich and poor--to level the economic playing field?

Probably not.

From FDR through Jimmy Carter it was an article of faith among liberals that higher taxes on the rich would result in lower taxes on the poor and working class. This was because the Republican Party consistently pushed for a balanced budget. Tax income was tied to expenditures, which were more or less fixed--and thus a zero-sum game.

That period from 1933 to 1980 was also the era of the New Deal, Fair Deal and Great Society social and anti-poverty programs, such as Social Security, the G.I. Bill, college grants and welfare. These government handouts helped mitigate hard times, gave life-changing educational opportunities that allowed class mobility, closing the gap between despair and hope for tens of millions of Americans. As the list of social programs grew, so did the tax rate--mostly on the rich. The practical effect was to redistribute income from top to bottom.

Democrats think it still works that way. It doesn't.

The political landscape has shifted dramatically under Reagan, Clinton and the two Bushes. Budget cuts slashed spending on student financial aid, food stamps, Medicaid, school lunch programs, veterans hospitals, and aid to single mothers. The social safety net is shredded. Most federal tax dollars flow directly into the Pentagon and defense contractors such as Halliburton.

As the economy continues to tank, there's only category to cut: social programs. "Eugene Steuerle worked on tax and budget issues in the Reagan Treasury Department and is now with the Urban Institute," NPR reported a year ago. "He says one reason no one talks about preserving the social safety net today is that lawmakers have given themselves little choice but to cut it. They've taken taxes and entitlements, such as Social Security and Medicare, off the budget-cutting table, so there's not much left."

Meanwhile, effective tax rates on the wealthy have been greatly reduced. Which isn't fair--but not in the way you might think.

Taxes on middle-class families are at their lowest level in 50 years, according to the Center on Budget and Policy Priorities, a liberal thinktank.

What's going on?

On the revenue side of the budget equation, the poor and middle-class have received tiny tax cuts. The rich and super rich have gotten huge tax cuts. Everyone is paying less.

On the expense side, social programs have been pretty much destroyed. If you grow up poor there's no way to attend college without going into debt. If you lose your job you'll get 99 weeks of tiny, taxable (thanks to Reagan) unemployment checks before burning through your savings and winding up on the street.

Military spending, on the other hand, has soared, accounting for 54 percent of federal spending.

In short, we're running up massive deficits in order to finance wars in Afghanistan, Iraq, and so on, and so rich job-killers can pay the lowest tax rates in the developed world.

I'm all for higher taxes on the rich. I'm for abolishing the right to be wealthy. But liberals who think progressive taxation will mitigate or reverse income inequality are trapped in the 1960s, fighting the last (budget) war in a reality that no longer exists. The U.S. government's top priority is invading Muslim countries and bombing their citizens. Without big social programs, invading Muslim countries and bombing their citizens is exactly where every extra taxdollar collected from the likes of Mitt Romney would go.

The only way progressive taxation can address income inequality is if higher taxes on the rich are coupled with an array of new anti-poverty and other social programs designed to put money and new job skills directly into the pockets of the 99 percent of Americans who have seen no improvement in their lives since 1980.

You have to rebuild the safety net. Otherwise higher taxes will swirl down the Pentagon's $800 toilets.

If you're serious about inequality, income redistribution through the tax system is only a start. Whether through stronger unions or worker advocacy through federal agencies, government must require higher minimum wages. Maximum wages, too. A nation that allows its richest citizen to earn ten times more than its poorest would still be horribly unfair--yet it would be a big improvement over today. Shipping jobs overseas must be banned. Most free trade agreements should be torn up. Companies must no longer be allowed to layoff employees before eliminating salaries and benefits for their top-paid managers--CEOs, etc.

And a layoff should mean just that--a layoff. First fired should be first rehired--at equal or greater pay--if and when business improves.

Once a battery of spending programs targeted to the 99 percent is in place--permanent unemployment benefits, subsidized public housing, full college grants, etc.--the tax code ought to be radically revamped. For example, nothing gives the lie to the myth of America as a land of equal opportunity than inheritance. Aristocratic societies pass wealth and status from generation to generation. In a democracy, no one has the right to be born into wealth.

Because everyone deserves an equal chance, the national inheritance tax should be 100 percent. While we're at it, why should people who inherited wealth but have low incomes get off scot-free? Slap the bastards with a European-style tax on wealth as well as the appearance of wealth.

Now you're probably laughing. Even Obama's lame call for taxing the rich--so the U.S. can buy more drone planes--stands no chance of passing the Republican Congress. They're empty words meant for election-year consumption. Taking income inequality seriously? That's so off the table it isn't even funny.

Which is why we shouldn't be looking to corporate machine politicians like Obama for answers.

Ted Rall is the author of the new books "Silk Road to Ruin: Is Central Asia the New Middle East?," and "The Anti-American Manifesto" . His website is http://tedrall.com.

by Amy Goodman

Although Mitt Romney has yet to win a majority in a Republican primary, he won big in Florida. After he and the pro-Romney super PACs flooded the airwaves with millions of dollars’ worth of ads in a state where nearly half the homeowners are underwater, he talked about whom he wants to represent. “We will hear from the Democrat Party the plight of the poor, and there’s no question, it’s not good being poor,” he told CNN’s Soledad O’Brien. “You could choose where to focus, you could focus on the rich, that’s not my focus. You could focus on the very poor, that’s not my focus. My focus is on middle-income Americans.” Of the very rich, Romney assures us, “They’re doing just fine.” With an estimated personal wealth of $250 million, Romney should know.

Romney’s campaign itself is well-financed, but his success to date, especially against his current main rival, Newt Gingrich, is driven by massive cash infusions to a so-called super PAC, the new breed of political action committee that can take unlimited funds from individuals and corporations. Super PACs are legally prohibited from coordinating their activities with a candidate’s campaign. Federal Election Commission filings made public Jan. 31 reveal that the principal super PAC supporting Romney, Restore Our Future, raised close to $18 million in the second half of 2011, from just 199 donors. Among his supporters are Alice Walton, who, although listed in the report as a “rancher,” is better known as an heir to the Wal-Mart fortune, and the famously caustic venture capitalist and billionaire Samuel Zell, the man credited with driving the Tribune media company into bankruptcy. William Koch, the third of the famous Koch brothers, also gave.

Juxtapose those 199 with the number of people living in poverty in the United States. According to the most recent figures available from the U.S. Census Bureau, 46.2 million people lived in poverty in 2010, 15.1 percent of the population, the largest number in the 52 years the poverty estimates have been published. 2010 marked the fourth consecutive annual increase in the number of people in poverty.

Romney, in his victory speech in New Hampshire, said: “This country already has a leader who divides us with the bitter politics of envy. We must offer an alternative vision. I stand ready to lead us down a different path, where we are lifted up by our desire to succeed, not dragged down by a resentment of success. ... We are one nation under God.”

The next morning, NBC’s Matt Lauer challenged him, asking: “Did you suggest that anyone who questions the policies and practices of Wall Street and financial institutions, anyone who has questions about the distribution of wealth and power in this country, is envious? Is it about jealousy, or fairness?” Romney doubled down, claiming: “I think it’s about envy. I think it’s about class warfare. When you have a president encouraging the idea of dividing America based on the 99 percent versus 1 percent—and those people who have been most successful will be in the 1 percent ... [it’s] entirely inconsistent with the concept of one nation under God.”

© 2012 Amy Goodman
http://www.democracynow.org/

Amy Goodman is the host of "Democracy Now!," a daily international TV/radio news hour airing on 900 stations in North America. She was awarded the 2008 Right Livelihood Award, dubbed the “Alternative Nobel” prize, and received the award in the Swedish Parliament in December.

America’s Road to Nowhere
February 21, 2012

The fact that the American Left lacks the media outreach to the public that the Right has is proving decisive as conservatives consolidate their influence in blue-collar communities that, ironically, are suffering from right-wing excesses of the past three decades, as Danny Schechter explains.

By Danny Schechter

Oil prices are rocketing. Iranian warships are moving into the Mediterranean to shadow the U.S. warships already there. Propaganda news is growing with rumors of Al Qaeda links with Iran, and, then, less speculative news about real links between the terror group and the armed opposition in Syria.

As Rolling Stone’s Matt Taibbi puts it, the smell of war is in the air and on the air, “You can just feel it: many of the same newspapers and TV stations we saw leading the charge in the Bush years have gone back to the attic and are dusting off their war pom-poms.”

CLG adds: “Officials in key parts of the Obama administration are increasingly convinced that sanctions will not deter Tehran from pursuing its [alleged] nuclear program, and believe that the US will be left with no option but to launch an attack on Iran or watch Israel do so.”

The timing now seems to be for war in October, just before the next presidential election. Does that mean that the White House believes that war fever will generate more support for an embattled Commander in Chief? Orwell was right in his classic 1984: “the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact.”

Here in the “homeland,” the FBI busts a “terrorist” on his way, we are told, to blow up Congress. Turns out he was supplied with phony weapons by the FBI itself, a specialist in entrapment. The G-Men supposedly became suspicious when they heard that this young Moroccan, living illegally in Virginia, told someone who told someone that the “war on terror” was a war on Muslims. That’s probably a majority view in the Middle East, but to the FBI it was menacing and proof of evil intent.

After their puppet “suspect” was in custody, they reassured one and all that Congress was never at risk. (Nor, now, is the FBI’s next appropriation!)

What a relief! Congress has survived to fight another day in its own war — a partisan war without end. For the most part, the political logjam and stalemate continues and not just because of warring ideologies.

Unseen and only rarely commented upon by pundits who know how to cover political horse races but not political skullduggery is the role that big money plays behind the scenes. That is mostly kept out of sight and out of mind.

Bill Moyers and Michael Winship write: “Watching what’s happening to our democracy is like watching the cruise ship Costa Concordia founder and sink slowly into the sea off the coast of Italy, as the passengers, shorn of life vests, scramble for safety as best they can, while the captain trips and falls conveniently into a waiting life boat.

“We are drowning here, with gaping holes torn into the hull of the ship of state from charges detonated by the owners and manipulators of capital. Their wealth has become a demonic force in politics.

“Nothing can stop them. Not the law, which has been written to accommodate them. Not scrutiny — they have no shame. Not a decent respect for the welfare of others — the people without means, their safety net shredded, left helpless before events beyond their control.”

Yes, “we are downing here.” But is not just money per-se that is the problem, but those one percenters who are manipulating it as a weapon to drive our democracy into the dumper.

Charles Pierce names and shames them in the pages of Esquire, writing about the “the undeniable fact that, over the course of a decade, a bunch of cheats, thieves, and suited mountebanks stole most of the national economy and then wrecked whatever was left of it.

“But what’s most extraordinary about the whole thing is that, after they swindled their swindles and heisted their heists, and got paid off by the rest of us for having looted our national economy, they all kept doing the same things they were doing before. These included extravagant bonuses and, of course, continued crimes of capital that ought to be capital crimes.” Wow!

On the same day I read, Joe Nocera in the New York Times saying it’s not important to punish the banks. So, clearly the liberal media is in large part in cahoots with the right-wing message points, avoiding any structural analysis, while pushing for mild “reforms” unlikely to reform anything.

One consequence of our corporate news system, according to Richard Flanders in The Atlantic, is that Americans are being steered into becoming even more conservative.

“Even with the president’s approval rating showing signs of life and the Republicans busily bashing themselves over the head — ‘one is a practicing polygamist and he’s not even the Mormon,’ retired Supreme Court Justice Sandra Day O’Connor recently quipped about her party’s two frontrunners — America continues to track right, according to polling data released by the Gallup Organization this week,” he writes.

“Americans at this political moment are significantly more likely to identify as conservative than as liberal: conservatives outnumber liberals by nearly two to one. Forty percent identify as conservative, 36 percent as moderate, and 21 percent liberal.”

Most upsetting is that the people who suffering the most are stuck in the “Alice in Wonderland” world of conservative ideology. This study concludes: “The ongoing economic crisis only appears to have deepened America’s conservative drift – a trend which is most pronounced in its least well off, least educated, most blue collar, most economically hard-hit states.”

The public becomes dumber, in part, because our media is a dumbing-down machine. No wonder, alternative voices are brushed to the margins by our not so free press. This past week, I was interviewed by RT and AlJazeera, but none of the U.S. TV news networks that I used to work for will have me on. It’s not a personal thing: I am not alone.

Yes, MSNBC has added two progressive hosts, but in the morning, on weekends, when viewing is lowest. Fox, meanwhile, dumped Judge Napolitano and his sometime sensible and outspoken libertarian show. Can’t have that, can we?

It’s time for Occupy Wall Street to add media reform to its emerging agenda. The media war is as real as any other, and unless we fight that one, we will lose all the others. Politics is a war of ideas, of different narratives in collision. It’s not enough to chant, “We are the 99 percent.” We have to explain who rules America and how to change it.

One way to do it is educate the country about how many of the same interests that own the banks own the media. Perhaps that’s why most media outlets are not reporting that unemployment increased this month and that underemployment is up to 19 percent.

Writes Rex Nutting on Market Watch: “Everyone knows that the Great Recession has inflicted tremendous damage to the lives and fortunes of millions of Americans. But what you may not know is that most of the suffering is still to come. We’re not even halfway done with this mess.”

A mess it is, a “mistake” it isn’t. That’s why activists can’t give up

If there was ever a time for progressives to unite around some coherent ten-point plan that can be used to reach potential supporters and broaden the movement for change, this is it. The aspiration should be to build a coalition that can win, to “occupy the mainstream.”

Sadly, here as in Greece, where the economic crisis is at a boiling point, a headline in the Financial Times sums up a key obstacle to fighting back: “Greek Left Has Most Support But is Fragmented”

What say you, unions, churches, minorities, students, workers, activists, feminists and occupiers? Do we work together or lose apart? Assuming that the GOP self-destructs, do we really think that more ‘Bama can make the difference that needs making?

News Dissector Danny Schechter’s blog is now at NewsDissector.Net. Danny made the film Plunder (Plunderthecrimeofourtime) on the financial crisis as a crime story. Comments to dissector@mediachannel.org .

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