Splitting the Difference Between Myth and Reality Is Not Good Economics

by John Atcheson

So now can we run our country on facts, not myths?

In the runup to the 2008 financial collapse, many progressives and even a few inside players warned against Wall Street’s house of cards (http://www.fintools.com/docs/Warren%20Buffet%20on%20Derivatives.pdf), accurately predicting that unregulated hedge funds and widespread use of derivatives would result in a catastrophic crash.

But the folks in charge of our economy were a bunch of Ayn Rand acolytes (http://motherjones.com/politics/2008/10/alan-shrugged) who believed the market was infallible and government intervention and regulation was always bad and would stifle economic growth.

Well, we saw how that turned out.

But we didn’t learn.

Thanks to Democratic perfidy, instead we got an instant replay.

And even after Obama’s stimulus program created or saved more than 3 million jobs we doubled down on the very anti-government philosophy that helped cause the recession in the first place.

Republican policies that should have been deader than a vampire in the middle of Death Valley at high noon with an oak stake through its heart, lurched to the fore again, and a robust economic recovery that could have been, never was.

Somehow, government – after creating jobs – was found incapable of creating jobs.

Somehow, big corporations – after exporting jobs and sitting on over $2 trillion in profits instead of investing in job creating expansions –became the “job creators.”

Somehow, lower taxes became the solution to the problem they caused -- debt.

Somehow, like Lucy duping Charlie Brown, we bought into the whole trickle down idea again. It was as if we hadn’t noticed that it simply doesn't work. Never has. (http://www.faireconomy.org/research/TrickleDown.html)

It was as if we hadn’t watched the wealth get concentrated into the upper 1%. It was as if we didn’t know that this concentration was one of the main causes of the Great Recession of 2008, just as it contributed to the Great Depression in the 1930’s and the Depression of the 1890’s.

Somehow, we fell for the Republican’s "starve the beast" (http://www.commondreams.org/view/views05/0926-30.htm) con again. Somehow, we bought into the whole “government is the problem” cant, even after it had been revealed to be a bogus pretext for turning power over to the plutocracy.

Somehow, after stripping worker’s rights, exporting jobs, and lowering wages in the private sector, the solution to the increasing inequality between the uber rich and the rest of us became gutting state and local governments, and taking away public employees’ right to bargain – the very things that allowed the private sector to exploit workers.

Somehow, firing people with jobs became the Republican strategy for job creation. People who taught our children; policed our streets; picked up our garbage; put out our fires; built and maintained our parks, libraries, and roads for a living wage became the scapegoat for the impoverishment the private sector imposed on workers. Instead of organizing to win back their own living wages and lost benefits, people were convinced that taking away those of government workers would somehow make them better off.

Divide and conquer politics. The politics of fear, hate, greed, envy and spite. The race to the bottom. Orchestrated by plutocrats, executed by conservatives, allowed by Democrats.

And so austerity and deficits were raised up like bogeymen and used to achieve -- through budget cuts, that which the American people would never agree to on principle – the gutting of all the government programs that had made the US a prosperous, just and civil society.

And here’s where the I-told-you-so’s come in.

Every economist and policy analyst worth his or her salt warned against adopting austerity measures in the midst of a jobs crisis. They also noted that deregulation had been a root cause of the 2008 collapse – in fact, many of them were the same ones who’d correctly predicted the 2008 collapse.

But in a political world dominated by myth, and with a press given to putting “balance” before accuracy, truth and reality, and with a Democratic Party whose main tactic seems to be preemptive capitulation, no one listens to facts, no one argues against myths and no one gets credit -- or credibility -- for being right.

But now we have Britain – a country which had no real debt crisis, and which had been experiencing a modest recovery until conservatives took over and imposed their magic elixir of extreme austerity to cut deficits – slipping into a double dip recession.

This of course follows the abysmal performance of Spain and Ireland both of which had budget surpluses before their economies collapsed under the weight of excessive speculation, and both of whom followed the austerity mantra of conservatives.

Of course we must eventually deal with the deficit. But the example of Britain and Europe show that austerity in the midst of a jobs crisis is a form of insanity. It ultimately makes deficits worse and leads to economic stagnation and double dip recessions.

We have an election coming up. It should be a clear choice between a Party that wants to run the country on myths and one that favors reality. Unfortunately, Obama and the Democrats have decided to split the difference between reality and myth.

So can we now, finally, drop the destructive right-wing myths and listen to the ladies and gentlemen who got it right before the recession, and who are calling it right now?

John Atcheson's writing (http://www.commondreams.org/john-atcheson) has appeared in the New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News, the Memphis Commercial Appeal, as well as in several wonk journals. He is the author of a fictional Trilogy that centers on climate change. The first book will be available on Amazon in the spring of 2012. Atcheson's book reviews are featured on Climateprogress.org.

Halfway Through a Lost Decade

by Robert Scheer

Does anyone care that the economy is floundering and that we are not getting out of this crisis anytime soon? Housing values are in the cellar, the Fed foresees unemployment remaining unacceptably high for the next three years, and national economic growth is predicted to be, at best, anemic.

Even the substantial rise of stock averages during recent years has been based in large part on the ability of companies such as Apple to outsource jobs and sales to booming markets led by China—while America’s graduating students face mountainous debt and what is shaping up as a decade without opportunity.

These are the inescapable conclusions to be drawn from a gloomy report released Wednesday by the Federal Reserve. In that document, the Fed revises downward its growth projection for the next two years and predicts, in the words of a New York Times article about the report, that “unemployment will remain a massive and persistent problem for years to come.” The housing failure that is the root cause of this economic emergency continues unabated because there is no political will in either party to aid beleaguered homeowners.

Beneath all the pundit blather about the election lies the fact that most deeply affects the voters’ well-being: Home prices are at a decade low, and in cities like Atlanta and Las Vegas they are as dismal as they have been since the Case-Shiller indices started tracking housing prices in the early 1990s.

Without a resurgence in housing value, consumer confidence will remain moribund and a woefully weak labor market will persist. Every time housing seems to be rebounding, the banks and the feds unload more of their toxic mortgages and prices edge lower.

The only thing preventing a complete collapse, one that would plunge us into deep recession or worse, is the Fed’s extremely low interest rate, which Wednesday’s report reiterated will remain at near zero until late 2014. If the Fed rate were to rise, driving up all of the adjustable rate mortgages out there, we would be in a full-blown depression.

All of this terrible news should spell disaster for Barack Obama’s re-election chances, since it is a direct consequence of his continuing the George W. Bush strategy of bailing out the bankers while ignoring the plight of the homeowners they swindled. But Obama will probably survive because his Republican presidential rival, Mitt Romney, is far worse on this subject.

At least Obama has made a stab at pushing the banks to provide mortgage relief, albeit a halfhearted one. When assessed in light of Romney’s splendid indifference to the suffering that he himself and other financial hustlers caused, Obama deserves support; at least the president seems alert to the pain the bankers have inflicted, while Romney blames their victims.

Romney’s is the sink-or-swim, tough-love approach that has come to mark the Republican Party. As he put it last fall in an interview with the Las Vegas Review-Journal: “... [D]on’t try and stop the foreclosure process. Let it run its course and hit bottom. Allow investors to buy up homes, put renters in them, fix the homes up and let it turn around and come back up.”

That of course does not address the painful losses of, for example, Nevada homeowners, who have witnessed a 62 percent drop in values since 2006. At fault is a free-market-rules philosophy that denies the essential reality of American housing: The market was not free, it was brutally rigged.

The securitization of mortgages into collateralized debt obligations turned homes—the castles of so many average Americans—into gambling chips, and the fallout mainly hurt those who were not even in on the game. As The Wall Street Journal reported in February when Romney was campaigning in Nevada, the primary victims of foreclosure are those who had paid down their home loans, or worse yet owned homes outright, only to find that repossessions on their block destroyed the value of their investment.

The appalling thing is that this enormous mess did not have to happen. It is a man-made disaster, the result of capricious Wall Street bankers who have no regard for the national interest. Perhaps that is to be expected, but what is shocking is the inability of leading politicians of either party to mount a challenge to the unfettered greed that has come to dominate our political process.

In the end, the perpetrators of this calamity have been rewarded, and their patsies, the ordinary folks who are supposed to matter in a democracy, have been cast overboard.

© 2012 TruthDig.com

Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.

Five Tax Fallacies Invented by the 1%

by Paul Buchheit

We hear these claims often, even though they're entirely false. An analysis of the facts should make that clear.

(1) The Rich Pay Almost All the Taxes

That's simply not true. The percentage of total taxes paid by the very rich (the top 1%) is approximately the same as the percentage paid by middle class Americans (the 4th quintile, average income $68,700). Here are the details:

Internal Revenue Service figures show that the very rich paid 23% of their incomes in federal income taxes in 2006. The middle class paid about 8% of their incomes in federal income taxes. Based on U.S. Congressional Budget Office figures, the very rich pay just under 2% of their incomes toward social security, while the middle class pays just under 10%. According to a study by The Institute on Taxation and Economic Policy, the very rich pay about 7% of their incomes in state and sales and property and excise taxes, while the middle class pays approximately 10%. Another year of Bush tax cuts will reduce the taxes of the very rich by at least 3% more than the middle class.

So total taxes for the very rich are 29% of their incomes (23% + 2% + 7% - 3%). Total taxes for the middle class are 28% of their incomes (8% + 10% + 10%). These figures agree with CTJ's 2011 estimate of total taxes paid.

(2) Tax Rates Are Too High

In 2009, the United States ranked 26th out of 28 OECD countries in total federal, state, and local taxes as a percent of GDP. Only Chile and Mexico had lower tax rates.

According to the Center on Budget and Policy Priorities, "federal taxes on middle-income Americans are near historic lows." For taxpayers in the top 1%, the tax burden has fallen dramatically in recent years.

At very high income levels, beginning at about the million dollar range, federal income tax actually becomes regressive. Effective tax rates level off at about 25%, and then go down from there. This is because all incomes over $388,000 are subject to the same 35% maximum. The $4 billion hedge fund manager pays no more, percentagewise, than the $400,000 doctor. In fact, even less. At the highest levels most of the income comes from capital gains, which are taxed at 15%.

How about corporations? Even worse. They paid only 12.1% in 2011, dramatically lower than the 25% average since 1987. According to U.S. Office of Management and Budget (OMB) figures, they're paying about a THIRD of the inflation-adjusted share of GDP paid by corporations in the 1960s.

Compared to foreign countries, U.S. corporations paid a smaller rate of income taxes than 24 of 25 OECD countries analyzed by the Office of Management and Budget and the Census Bureau.

Most stunning is the shift in taxpaying responsibility from corporations to workers over the years. For every dollar of workers' payroll tax paid in the 1950s, corporations paid three dollars. Now it's 22 cents.

(3) Tax Cuts Boost the Economy

In the 1970s, University of Chicago economist Arthur Laffer convinced Dick Cheney and other Republican officials that lowering taxes on the rich would generate more revenue. The delusion has persisted to this day.

Soon after the Reagan tax cuts, in 1984, the U.S. Treasury Department came to the logical conclusion that tax cuts cause a loss of revenue. A 2006 Treasury Department study found that extending the Bush tax cuts would have no beneficial effect on the U.S. economy.

Other sources confirm that economic growth was fastest in years with relatively high top marginal tax rates.

The reality is that supply-side, trickle-down economics simply hasn't worked. Various economic studies have concluded that the revenue-maximizing top income tax rate is anywhere from 50% to 75%.

(4) Eliminating Tax Breaks for the Rich Wouldn't Significantly Reduce the Deficit

First of all, just eliminating the Bush tax cuts on the highest-earning 5% of Americans could knock $150 billion off the deficit. Congressional Budget Office data shows that the tax cuts have been the single largest contributor to the return of substantial budget deficits in recent years.

But there's so much more. The IRS estimates that 17 percent of taxes owed were not paid, leaving an underpayment of $450 billion.

Most of the annual $1.3 trillion in "tax expenditures" (tax subsidies from special deductions, exemptions, exclusions, credits, and loopholes) goes to the top quintile of taxpayers. One estimate is $250 billion a year just to the richest 1%.

Another $100 billion could be retrieved by collecting taxes from Fortune 500 companies at the 26% rate paid from 1987 to 2008. CTJ puts the figure at over $200 billion.

Worse yet is the loss from tax havens, which the Tax Justice Network estimates as $337 billion.

Despite some overlap in these figures, it all adds up to a pretty good chunk of the deficit.

(5) A Financial Transaction Tax (FTT) Would Hurt the Economy

This fallacy would have us believe that a tiny tax on financial transactions is going to hurt the economy, even though the underlying reason for our economic collapse was the excessive, reckless, unrestrained, free-for-all trading of trillions of dollars of speculative derivatives.

The inventiveness of this fallacy is impressive, with claims of lost jobs, harm to ordinary investors, and the threat of exchanges moving overseas. The Wall Street Journal calls the FTT a "sin tax."

An FTT isn't likely to interrupt the global trading frenzy or cause any sudden defections from financial megacenters. The United Kingdom has had a tax on stock trades for decades, and the London Stock Exchange is humming along as the third largest exchange in the world. The CME Group, made up of the Chicago Mercantile Exchange and the Chicago Board of Trade, had a profit margin higher than any of the top 100 companies in the nation from 2008 to 2010.

On the contrary, the FTT has extraordinary revenue-generating potential, on a global scale. The Bank for International Settlements reported in 2008 that annual trading in derivatives had surpassed $1.14 quadrillion (a thousand trillion dollars!). For the U.S. alone, revenue estimates by the Center for Economic and Policy Research and the Chicago Political Economy Group approach a half-trillion dollars annually.

And at the more basic level of simple fairness, it should be noted that while an American mother pays nearly a 10% sales tax on shoes for her kids, millionaire investors pay .002 percent (2-thousandths of a percent) for a financial instrument. That kind of tax disparity is what really hurts.


Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

How the Ultra-Rich Betray America

by Paul Buchheit

The betrayals come in many forms. Here are a few of the more outrageous, and destructive, examples:

Evasion: Corporations suddenly stopped meeting their tax responsibilities

While corporate profits have doubled to $1.9 trillion in less than ten years, the corporate income tax rate, which for thirty years hovered around the 20-25% level, suddenly dropped to 10% after the recession. It has remained there for three years.

We are seeing a manifestation of the Shock Doctrine. Corporations are using the national emergency of the financial collapse to make a statement about taxes, and a traumatized nation is too preoccupied to do anything about it.

Delusion: Technology companies won't admit that much of their 'innovation' is due to public assistance

According to the report Funding a Revolution, government provided almost half of basic research funds into the 1980s. Federal funding still accounted for half of research in the communications industry as late as 1990. Even today, the federal government supports about 60 percent of the research performed at universities.

Apple's first computer was introduced in the late 1970s. Apple still does most of its product and research development in the United States, with US-educated engineers and computer scientists.

Google's business is based on the Internet, which started as ARPANET, the Defense Department's Advanced Research Projects Agency computer network from the 1960s. The National Science Foundation funded the Digital Library Initiative research at Stanford University that was adopted as the Google model.

Apple got its tax bill down to 9.8% last year. About 2/3 of its profits remain overseas for tax avoidance purposes. Google, like Apple, avoids taxes by moving most of its foreign profits through Ireland and the Netherlands to Bermuda. Both Apple and Google, along with Microsoft and Cisco, are lobbying for a repatriation tax holiday to allow billions of overseas dollars to come home at a greatly reduced tax rate.

An Apple executive said: "We don't have an obligation to solve America's problems." That may be true, but they do have an obligation to pay the taxes that help America solve its problems.

Desertion: The people who benefit most from government are renouncing their citizenships to avoid taxes

Perhaps the ultimate insult to America is to just quit on your country after making a fortune off of it. In 2011 almost 1,800 Americans gave up their citizenship to avoid taxes.

The wealthy benefit disproportionately from property and inheritance laws, contracts, stock exchanges, favorable SEC regulations, the Small Business Administration, patent and copyright and intellectual property laws, estate planning, trust funds, Internet marketing, communications infrastructure, highway maintenance, air traffic control, local and national security, and 60 years of research in technology and other industries.

A recent outrageous example is Facebook part-owner Eduardo Saverin, whose family came to America from Brazil partly for safety reasons, and who happened to land Mark Zuckerberg as a roommate at Harvard. Now after falling into billions, he's decided to renounce his U.S. citizenship to avoid taxes.

Denial: Traders feel it's inappropriate to pay even a tiny tax on a quadrillion dollars in sales

A quadrillion dollars sounds like a fake amount. But it's all too real. That's a thousand trillion dollars of derivatives transactions which, along with the high-frequency computer-generated transactions (5,000 per second) that make up over half of U.S. stock trades, contributed to a financial meltdown and a $3 trillion bailout for reckless trading.

But there's no tax on these transactions.

While average Americans pay a 10% sales tax on necessities, millionaire investors pay just a .00002% SEC fee (2 cents for every thousand dollars) for a financial instrument. And their supporters claim, inexplicably after the disastrous trading frenzy in 2008, that a tax would increase volatility.

Illusion: The media leads us to believe we should all be cheering when the stock market is booming

Conservatives insultingly assure us that the "democratization of stock ownership" is gradually making America more equal, as evidenced by the flattening of wealth ownership among the richest 1% in recent years. So we should all be excited about a rising stock market.

Here are the facts. Data from Edward Wolff confirms that from 1983 to 2007 the percentages of net worth and financial wealth for the top 1% remained steady. But the percentages for the rest of the richest 5% increased by almost 20%, while the percentages for the lowest 80% of the population DECREASED by almost 20%.

In other words, the share of wealth owned by the top 1% leveled off because the "democratization of stock ownership" spread the wealth among just 5% of the population, those earning an average of $500,000 per year. A few people -- 5 out of 100 -- got very rich, but everyone else lost ground.


The issues are difficult to address with Congress largely on the side of the wealthy. At the very least:

(1) Eliminate the tax break on unearned income (capital gains). The richest Americans, who own most of the stocks, should not pay a smaller tax than everyone else.

(2) Implement a small financial transactions tax. It would be easy to administer on computer trades, it would generate hundreds of billions of dollars in revenue, and it would help guard against the reckless speculation that devastated the financial markets and our country.


Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Small Business Baloney: GOP Tax Claims Should Be Factchecked

by Fairness & Accuracy in Reporting

Barack Obama's July 9 announcement that he would extend the Bush tax cuts for income below $250,000 prompted the expected response from Republican politicians and presidential candidate Mitt Romney: This is a tax increase on "small businesses."

That is false. But most news reports won't say so.

The New York Times (7/10/12) told readers that Obama
said that 98 percent of households and 97 percent of small businesses would receive a tax cut under his plan. But Republicans said the president’s proposal would amount to a broad tax on small businesses because many business owners report their profits as personal income.

In the Washington Post (7/10/12), readers learned that Republicans "charged that the president's plan would raise taxes on small-business owners." That point was illustrated by quotes from House Speaker John Boehner and and a representative for the Romney campaign, which were balanced with the statement that "Obama said his plan would cover 98 percent of the working public and 97 percent of small-business owners."

The headline of a USA Today story (7/10/12) captured the same spirit: "Obama Seeks to Extend Tax Cuts for Middle Class; GOP Critics Say Plan Will Hurt Small Business."

On ABC's Good Morning America, Jonathan Karl (7/10/12) reported, "Romney says raising taxes on those with higher incomes means raising taxes on small businesses."

Newspaper stories the following day followed a similar pattern: Republicans say this is a tax on small businesses, while Obama says it is not. In the Washington Post (7/11/12), Romney "said the president's plan would keep taxes at the same level for many Americans while raising taxes on what he called 'job creators and small businesses.'"

The Los Angeles Times (7/11/12) added another layer of inaccuracy by reporting that Obama's plan "would extend George W. Bush-era tax cuts for those making up to $250,000 a year but not for upper-income Americans." That is incorrect; wealthy Americans will also receive a tax cut on the income they earn up to the $250,000 level (Citizens for Tax Justice, 6/20/12; NYMag.com, 7/9/12).

This Republican small business argument is a familiar one; in 2010 Republicans sought to portray any increase in taxes on income above $250,000 as a tax on small-business owners (FAIR Action Alert, 9/13/10).

Then, as now, the argument is almost entirely bogus. The share of filers who could qualify as small business owners is tiny--about 2 percent of small business owners, according to the U.S. Treasury Department. The increase would affect, according to the Joint Committee on Taxation, about 3 percent of filers who claim any business income (Think Progress, 7/9/12).

So why don't reporters just say that? Some who try to put the numbers in context seem afraid to call out one side for being deceptive. On CBS Evening News (7/9/12), Norah O'Donnell reported the story this way:
Mitt Romney said today that the president's proposal would mean a massive tax increase on job-creators and small businesses. Many of those small businesses pay at an individual tax rate. But the president said it would affect just 3 percent of small businesses. Still, Scott, that would affect about 250,000 small businesses.

Turning the tiny percentage into a number that sounds impressive seems a pretty clear attempt to make viewers think the Romney campaign had a point.

One part of the newspaper did explain the dispute clearly: The New York Times editorial page (7/10/12), which called the Republican argument about small business "nonsense."

But the corporate media's bias toward giving credence to official claims from both political parties means you have to treat that question of fact as a matter of opinion--which, of course, is a problem, if you think that separating fact from misinformation is a key part of a journalist's job.

And the failure to challenge Republican distortions gives them no reason to stop making them. As the Los Angeles Times reported (7/10/12), "Polls also show that Republicans do better when they frame upper-income tax increases as a threat to small businesses, a group that voters tend to like."

That is especially true when media don't tell the public that the claim is almost entirely bogus.

© 2012 Fairness & Accuracy In Reporting

Why Are Americans So Confused?

by Ira Chernus

When I was back there in junior high school, there was a civics teacher who put forth the proposition that democracy depends on one simple principle: People are rational. Give them free access to information, and they’ll think things through logically to figure out what policies are best not just for themselves but for the whole nation.

The latest poll from the Washington Post - Kaiser Family Foundation gives some support to that proposition. 67% of this sampling of 3,130 Americans understand that “there are many goods and services which would not be available to ordinary people without government intervention.” Only 29% disagree.

As a group they are more worried about jobs and health costs than the federal deficit. 45% think Democratic economic policies help them; only 37% say that about the GOP.

To be fair, the group sampled was a bit more liberal than in most other polls. 34% identify as Democrats and only 25% as Republicans; 29% declared themselves liberal on most political matters, which is more than you see in most polls. They favor Obama over Romney by a solid margin, 50% to 43%.

On a number of questions, though, a majority of this seemingly left-tilting group sound like they are reading from Romney’s script. 55% want “smaller government with fewer services”; only 40% want more government services. 53% think budget cuts to reduce the federal deficit would help the economy. But not in the Pentagon. Only 45% would reduce military spending, while 51% oppose that.

Yet 63 % agree with the Democrats that additional spending on roads, bridges, and other public works projects would help the economy; only 13% think it would hurt. No support for smaller government or budget cuts there.

And 65% support Obama’s plan to raise taxes on households with incomes of 250 thousand dollars per year or higher. Only 33% oppose it. But 51% say cutting personal income taxes would help the economy, and 53% support cutting taxes on businesses.

These people seem rather confused. So maybe it’s not surprising that when asked whether the economy would benefit more from increased spending or avoiding federal deficit, they deadlock at 48% - 48%.

They’ve got the same kind of confusion when it comes to broader principles. More think government regulation is helpful than think it’s harmful, by 49% to 44%. 52% say “the federal government should do everything possible to improve the standard of living”; only 44% say that is “not the government’s responsibility, each person should take care of themselves.” What happened to the majority who want smaller government with fewer services?

They show up again in the 60% who agree with the Romney-Ryan view that “government controls too much of our daily lives” and in the 65% who say, “Most people who don’t get ahead should not blame the system, they have only themselves to blame”; only 33% disagree. A whopping 75% say, “People should take responsibility for their own lives and economic well-being and not expect other people to help”; only 23% disagree. (Remember the 67% who said many goods and services would not be available to ordinary people without government intervention?)

However another whopping 70% endorse the view that “If people were treated more equally in this country we would have many fewer problems”; only 28% disagree. If people are not treated equally, how can they be blamed for their own troubles? In the very same poll, though, only 52% will agree that “one of the big problems in this country is that we don’t give everyone an equal chance,” while fully 46% disagree.

With such confusion on basic principles, no wonder this group contradicts itself so much on economic policies. But if your head is spinning now, wait. There’s just a bit more.

Should we “be more tolerant of people who choose to live according to their own moral standards even if we think they are wrong”? A huge majority say yes, we should be more tolerant, 75% to 23%. But are “Americans are too tolerant and accepting of behaviors that in the past were considered immoral or wrong”? You guessed it. A large majority (61%) say that we are too tolerant; only 36% disagree.

Well, that’s how democracy works. Not by rigorous logical thinking, as we were taught in civics class. But not by cynical manipulation of the masses, either. There’s enough support for Democratic and even liberal views here to show that these are not passive victims of FoxNews propaganda.

Should we conclude that people are hopelessly confused and leave it at that? No. I think there’s a way to make sense out of all this contradiction, if we look at one more question from this poll: “Do you think that people and groups that hold values similar to yours are gaining influence in American life in general these days, or do you think that they are losing influence”? 59% reply that they and their people are losing influence. Only 34% see themselves gaining.

To put it just a bit too bluntly, an awful lot of Americans feel like losers. They know that they are hard-working citizens who play by the rules. But they aren’t getting ahead and they don’t feel they’re getting a fair shake. It seems like the little guy just doesn’t stand a chance. That’s their story.

So they are ready to agree with the story Obama tells on the campaign trail: Inequality is a big problem. Ordinary folks deserve more help from the government to equalize things and help out the little guy. That means more government spending. The rich should pay a bigger share of the costs of to offset that. And a bit more tolerance all around will make us a better society.

But Obama can’t solve their biggest problem: How to explain why they are losing out. Someone must be to blame. Enter Romney and Ryan. They, like Ronald Reagan and lots of other Republicans, know who is to blame: the government. It’s a simplistic, wrong-headed answer. But if this poll is anywhere near accurate (and plenty of others polls get similar results), a majority of Americans find the R-crowd’s story pretty appealing.

They know that they are capable, responsible people who can make it on their own if given half a chance. So they figure everyone else can take care of themselves too. The problem must be the huge, impersonal government controlling our lives. Get it off the backs of ordinary people -- let everyone stand on their own two feet -- and those of us who are decent folks, who still live by the tried-and-true moral values of the past, will do fine. That’s how the Romney-Ryan story goes.

All presidential candidates dish up mythic narratives, wrapping their selective version of the facts in stories that give them meaning and emotional punch. But this poll suggests that in 2012, unlike some election years, the myths the two sides are telling have roughly equal appeal. The public as a whole just can’t make up its mind which story to take as its guide. That’s why the candidates are virtually tied in the polls, which have barely moved in months.

There’s a lesson here for progressives who wonder why their movement has so much trouble gaining political traction with the masses. Yes, the masses are manipulated, but not as much as many progressives think. The problem progressives ignore is that they still believe what they learned in civics class: Give the people the true facts and their minds will lead them to logical conclusions. What the civics teacher left out is the powerful, perhaps ineradicable, human tendency to look for meaning by thinking in (or by means of) mythic narratives.

This poll suggests that a majority of Americans are listening with a somewhat open mind to the traditional populist narrative: It’s the rich bosses against the little guy, and it’s government’s job to balance the scales.

Obama and his campaign strategists are betting that a “soft” version of this story, hedged with concessions to the Romney-Ryan tale of rugged individualism, will win at least 271 electoral votes. So they are giving the basic progressive story line a public hearing and respectability that it hasn’t had since the days of Lyndon B. Johnson, the last of the New Dealers.

That gives progressives something to build on, if they will forget what they learned in civics class and accept the fact that in politics, it’s myth against myth. A successful myth has to have deep roots in the past. The old populist story meets that test. From the 1890s to the 1930s, and then again in the 1960s, it had huge support in the political mainstream. There’s no reason it can’t be revived.

But other deep roots have to be included too, if a progressive myth is going to have political success: the American tradition of individual responsibility and self-help, along with some kind of respect for familiar, reassuring moral values and a strong dash of patriotism.

It’s a tough task to put all that together in an appealing story. But with some imaginative effort it certainly can be done. If you doubt that go back and read the speeches of Dr. Martin Luther King, Jr. The populist myth was only part of King’s much broader message. But he can serve as an instructive and inspiring example because he was such a shrewd politician. He was able to win over much of the nation for radical change, despite massive opposition, in part because he had factual and moral truth on his side, but in part because he expressed that truth in such an emotionally powerful mythic narrative. We would do well to follow his example.


Ira Chernus is Professor of Religious Studies at the University of Colorado at Boulder and author of Mythic America: Essays and American Nonviolence: The History of an Idea. He blogs at MythicAmerica.us.

The Republican "Small Goverment" Fraud

by Lawrence Wittner

One of the most widely-advertised but falsest claims in American politics is that the modern Republican Party stands for “small government.”

In the distant past, leading Republicans were indeed sharp critics of statism. And even today a few marginal party activists, like U.S. Representative Ron Paul, have championed limited government -- even libertarian -- policies. But this is not at all the norm for the contemporary GOP.

For example, the Republican Party has stood up with remarkable consistency for the post-9/11 U.S. government policies of widespread surveillance, indefinite detention without trial, torture, and extraordinary rendition. It has also supported government subsidies for religious institutions, government restrictions on immigration and free passage across international boundaries, government denial of collective bargaining rights for public sector workers, government attacks on public use of public space (for example, the violent police assaults on the Occupy movement), and government interference with women’s right to abortion and doctors’ right to perform it.

And this barely scratches the surface of the Republican Party’s “big government” policies. The GOP has rallied fervently around government interference with the right of same-sex couples to marry, government provision of extraordinarily lengthy imprisonment for drug possession (for example, in the “war on drugs”) and numerous other nonviolent offenses, government interference with voting rights (for example, “voter suppression” laws), and government restrictions on freedom of information. Where, one wonders, is the Republican outrage at the U.S. government’s crackdown on people like Bradley Manning who expose government misconduct, or on whistle-blowing operations like WikiLeaks and its leading light, Julian Assange?

If the Republican Party were a zealous defender of civil liberties, as it claims to be, it would laud civil liberties organizations. But, in fact, the GOP has kept its distance from them. During the 1988 presidential campaign, George H. W. Bush, the Republican presidential candidate, publicly and repeatedly ridiculed his Democratic opponent as a “card-carrying member of the ACLU.”

Of course, the biggest arena of U.S. government action is the military. Here is where 57 percent of U.S. tax dollars currently go, thereby creating the largest national military machine in world history. A Republican Party that wanted to limit government would be eager to cut funding for this bloated giant. But the reality is that the modern GOP has consistently supported a vast U.S. military buildup. Today, its presidential candidate, Mitt Romney, assails his Democratic competitor for military weakness and champions a $2 trillion increase in U.S. military spending over the next decade.

Moreover, the Republican Party is an avid proponent of the most violent, abusive, and intrusive kind of government action -- war. In recent decades, as U.S. military intervention or outright war raged in Nicaragua, El Salvador, Grenada, Panama, Kuwait, the Balkans, Afghanistan, Iraq, Libya, and other nations, the GOP was a leading source of flag-waving jingoism, as it is today in the U.S. government’s confrontation with Iran. This is not a prescription for creating limited government. As the journalist Randolph Bourne remarked in the midst of U.S. government mobilization for World War I: “War is the health of the State.”

Yes, admittedly, there is plenty of GOP support for small government when it comes to cutting taxes on the wealthy, limiting regulation of big business, gutting environmental regulations, weakening legal protections for workers and racial minorities, and slashing government funding for public education, public health, and social welfare services. But there is a common denominator to this kind of small government action. It is all designed to serve the interests of the wealthy and powerful at the expense of everyone else. Thus, the Republican Party opposes government alleviation of hunger through the distribution of food stamps, but supports government subsidies to corporations.

Just take a look at the platform that will emerge from the GOP national convention. There will be plenty of rhetoric about freedom and limited government. But the party’s actual policies will reflect a very different agenda.

For those people who can see beyond the deluge of slick campaign advertisements, it should be clear enough that the Republican Party’s claim to support “small government” is a fraud. That claim is only an attractive mask, designed to disguise a party of privilege.


Lawrence S. Wittner is professor of history emeritus at SUNY/Albany. His latest book is "Working for Peace and Justice: Memoirs of an Activist Intellectual” (University of Tennessee Press).

Nonpartisan Tax Report Withdrawn After G.O.P. Protest

by Jonathan Weisman

WASHINGTON — The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economy theory, after Senate Republicans raised concerns about the paper’s findings and wording. The decision, made in late September against the advice of the agency’s economic team leadership, drew almost no notice at the time. Senator Charles E. Schumer, Democrat of New York, cited the study a week and a half after it was withdrawn in a speech on tax policy at the National Press Club.

But it could actually draw new attention to the report, which questions the premise that lowering the top marginal tax rate stimulates economic growth and job creation.

“This has hues of a banana republic,” Mr. Schumer said. “They didn’t like a report, and instead of rebutting it, they had them take it down.”

Republicans did not say whether they had asked the research service, a nonpartisan arm of the Library of Congress, to take the report out of circulation, but they were clear that they protested its tone and findings.

Don Stewart, a spokesman for the Senate Republican leader, Mitch McConnell of Kentucky, said Mr. McConnell and other senators “raised concerns about the methodology and other flaws.” Mr. Stewart added that people outside of Congress had also criticized the study and that officials at the research service “decided, on their own, to pull the study pending further review.”

Senate Republican aides said they protested both the tone of the report and its findings. Aides to Mr. McConnell presented a bill of particulars to the research service that included objections to the use of the term “Bush tax cuts” and the report’s reference to “tax cuts for the rich,” which Republicans contended was politically freighted.

They also protested on economic grounds, saying that the author, Thomas L. Hungerford, was looking for a macroeconomic response to tax cuts within the first year of the policy change without sufficiently taking into account the time lag of economic policies. Further, they complained that his analysis did not take into account other policies affecting growth, such as the Federal Reserve’s decisions on interest rates.

“There were a lot of problems with the report from a real, legitimate economic analysis perspective,” said Antonia Ferrier, a spokeswoman for the Senate Finance Committee’s Republicans. “We relayed them to C.R.S. It was a good discussion. We have a good, constructive relationship with them. Then it was pulled.”

The pressure applied to the research service comes amid a broader Republican effort to raise questions about research and statistics that were once trusted as nonpartisan and apolitical.

The Bureau of Labor Statistics on Friday will release unemployment figures for October, a month after some conservatives denounced its last report as politically tinged to abet President Obama’s re-election. When the bureau suggested its October report might be delayed by Hurricane Sandy, some conservatives immediately suggested politics were at play.

Republicans have also tried to discredit the private Tax Policy Center ever since the research organization declared that Mitt Romney’s proposal to cut tax rates by 20 percent while protecting the middle class and not increasing the deficit was mathematically impossible. For years, conservatives have pressed the nonpartisan Congressional Budget Office to factor in robust economic growth when it is asked to calculate that cost of tax cuts to the federal budget.

Congressional aides and outside economists said they were not aware of previous efforts to discredit a study from the research service.

“When their math doesn’t add up, Republicans claim that their vague version of economic growth will somehow magically make up the difference. And when that is refuted, they’re left with nothing more to lean on than charges of bias against nonpartisan experts,” said Representative Sander Levin of Michigan, the ranking Democrat on the House Ways and Means Committee.

Jared Bernstein, a former economist for Vice President Joseph R. Biden Jr., conceded that “tax cuts for the rich” was “not exactly academic prose,” but he said the analysis did examine policy time lags and controlled for several outside factors, including monetary policy.

“This sounds to me like a complete political hit job and another example of people who don’t like the results and try to use backdoor ways to suppress them,” he said. “I’ve never seen anything like this, and frankly, it makes me worried.”

Janine D’Addario, a spokeswoman for the Congressional Research Service, would not comment on internal deliberations over the decision. She confirmed that the report was no longer in official circulation.

A person with knowledge of the deliberations, who requested anonymity, said the Sept. 28 decision to withdraw the report was made against the advice of the research service’s economics division, and that Mr. Hungerford stood by its findings.

The report received wide notice from media outlets and liberals and conservative policy analysts when it was released on Sept. 14. It examined the historical fluctuations of the top income tax rates and the rates on capital gains since World War II, and concluded that those fluctuations did not appear to affect the nation’s economic growth.

“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie,” the report said. “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”

The Congressional Research Service does such reports at the request of lawmakers, and the research is considered private. Although the reports are posted on the service’s Web site, they are available only to members and staff. Their public release is subject to lawmakers’ discretion.

But the Hungerford study was bound to be widely circulated. It emerged in the final months of a presidential campaign in which tax policy has been a central focus. Mitt Romney, the Republican nominee, strongly maintains that any increase in the top tax rates on income and capital gains would slow economic growth and crush the job market’s tentative recovery.

President Obama has promised to allow cuts on the top two income tax rates to expire in January, lifting the rates from 33 and 35 percent, their level during most of George W. Bush’s presidency, to 36 percent and 39.6 percent, where they were during most of the Clinton administration. Mr. Obama maintains the increases would not hurt the economy and are the fairest way to reduce the deficit.

Mr. Hungerford, a specialist in public finance who earned his economic doctorate from the University of Michigan, has contributed at least $5,000 this election cycle to a combination of Mr. Obama’s campaign, the Democratic National Committee, the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee.

Copyright 2012 The New York Times

Note: Congress prohibits making these reports available to the citizens that pay for them. However, there are people who care enough about transparency to make them available despite the attempts of some to suppress uncomfortable facts.
The "Fiscal Cliff": Macroeconomic Consequences of Tax Increases and Spending Cuts, September 5, 2012

Reagan is Dead. The Future Looks Bright.

by Tony Norman

No one is happier about Tuesday's election outcome than the ghost of Ronald Reagan. Finally, the Gipper's spirit can pass over the River Styx to his great reward after being held hostage by a menagerie of right-wing freaks and loons since his death in 2004.

No name has been as consistently invoked during the primaries by candidates President Reagan wouldn't have bothered to spit on even had they set themselves on fire in front of him. Still, the Gipper was their spiritual prisoner despite the fact that he couldn't win a single GOP primary if he ran today because of the party's extremist drift.

Ironically, it took President Barack Obama's decisive re-election victory over the sad and delusional regional political party the GOP has become to finally liberate the Gipper's exhausted ghost from its ectoplasmic chains.

By giving the Republicans' chameleon-like presidential standard-bearer a proper and well-deserved drubbing in the electoral college, while also winning the popular vote, Mr. Obama has successfully defied the asinine meme that he was Jimmy Carter about to meet his fate at the hands of the new Reagan.

If anything, former Gov. Mitt Romney is President Gerald Ford minus the core of conviction that made the 39th president a far more credible and admired political figure.

"Obama wins because it's not a traditional America anymore," a visibly stunned Bill O'Reilly said on Fox News as the scope of America's rejection of the GOP's antediluvian political philosophy rolled in on election night. "The white establishment is in the minority. People want things."

For Mr. O'Reilly, the barbarians at the gates returning Mr. Obama to the White House on Tuesday night weren't fellow Americans asserting their constitutional right to elect their representatives. They were the deadbeats Mr. Romney referred to far less obliquely at an infamous fund-raising dinner as the "47 percent."

Mr. O'Reilly couldn't tell his viewers without bemoaning the death of "traditional America" and the white establishment why blacks, Hispanics, Asian-Americans, working-class whites in the Midwest and single women overwhelmingly rejected the "enlightened" majority rule he believes is America's birthright.

Mr. O'Reilly isn't alone. The entire ecology of right-wing punditry and so-called "news" is characterized by a stubborn resistance to facts that don't fit the script. There is no dialogue or discussion across the impermeable surface of the right-wing bubble. The voters who rejected Mr. Romney don't exist, which is why the right-wing media's internal polls insisted Mr. Obama would be swept away in a GOP landslide.

Between Karl Rove's stunning on-air attempts to get Fox News to reverse its call that Mr. Obama had won Ohio, and thus the presidency, and Donald Trump's bizarre Twitter meltdown in which he urged Republicans to "rise up against this travesty" and join him in instigating a revolution, there appeared to be way too much daylight between reality and those on the right wing.

Election night 2012 was both a hilarious and pathetic spectacle for those of us who couldn't wait to see the GOP get its much-deserved comeuppance. We knew disaster was coming because we get our facts from outside the conservative movement's impenetrable bubble of unreality.

Those of us in the real world have black, lesbian and Hispanic friends who haven't been shy about expressing their rage at the GOP's attempts to marginalize them. They couldn't wait for Election Day. Most people I associate with who aren't journalists sent money to the Obama campaign, so I couldn't understand why Fox News analyst Dick Morris insisted that minority turnout would be less than 2008 and that there was an "enthusiasm gap."

Then again, fantastic slanders about where Mr. Obama was born, his intellectual fitness to hold office and his political philosophy have preoccupied the right wing's dullest and most credulous minds since he took the oath of office in January 2009.

Since then, Fox News, Drudge, gullible newspaper columnists and right-wing talk radio shouters have become as unmoored from reality as Wile E. Coyote chasing the Road Runner off a cliff. They have convinced a lot of folks that a second term for Mr. Obama will usher in an era of Stalinesque terror and military occupation by the United Nations.

Fine with me. Every day away from reality by conservatives means more room for progressives in politics. Ronald Reagan is dead. The future looks bright.

© 2012 Pittsburgh Post-Gazette

Tony Norman is a Pittsburgh Post-Gazette columnist. He was once the Post-Gazette’s pop music/pop culture critic and appeared as an expert on cultural issues on local radio talk shows and television programs. In 1996, he began writing an award-winning general interest column, which, he says, rejuvenated his enthusiasm for the kind of journalism that makes a difference.

GOP's Small Business Tax Talking Point

by Peter Hart

Of all the arguments Republicans offer to maintain Bush tax cuts for the wealthy, one stands out: The tax increase would be a blow to small business owners. This is misleading–but you can't count on media to get this right.

The CBS Evening News had a segment last night (11/29/12) taking a look at the issue. On its face, there's not much support for the Republican position: About 2.5 percent of small business owners–a somewhat loosely defined group–would see a tax hike on income above $250,000 (Tax Policy Center, 8/5/10). This is straightforward; so how do you make it less so? CBS did it by leading off with a business owner who claims he's about to get socked. Wyatt Andrews reported:

Kevin Green owns two flower and gift shops in Alexandria, Virginia. He said raising taxes on the wealthy won't just hurt him–it will hurt his workers and the economy…. Small business owners typically report business income on their personal taxes. In a good year, Green's income will exceed $250,000, making him one of those taxpayers the president says should pay more–in his case, an estimated $8,000 more.

Remember, if this is all true, that means Green is in the tiny minority of business owners affected by the potential tax increase. Remember, these tax increases would apply to only the income above that $250,000 threshold. Green's claim of an $8,000 increase means that he likely makes substantially more than $250,000. (According to this chart, he would seem to be in the above $500,000 income range.)

So how do you make 2.5 percent sound like a lot? You ditch that number in favor of a total number of affected business (precisely what ABC's Jonathan Karl did back in 2010). So viewers saw this:

Andrews notes that the White House argues that this "small business" category includes people like hedge fund owners–a far cry from the mom-and-pop shopkeeper that Republicans like to talk about. But then he pivots to the Republican counter-argument:

But when Republicans argue higher taxes mean slow down growth, they are thinking about businesses like Kevin Green's.

Well, of course they are. Or at least they say that they are. But journalism should scrutinize these arguments, rather than just repeating them.

This is another attempt to muddy the water in a debate that should be fairly straightforward. This kind of story is a chance for media to do some factchecking. Or, alternatively, to help Republicans flesh out their talking points.

© 2012 Fairness & Accuracy In Reporting (FAIR)

Peter Hart is the activism director at FAIR (Fairness & Accuracy In Reporting). He writes for FAIR's magazine Extra, and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly" (Seven Stories Press, 2003).

When a Tax on the Rich Is Actually a Tax on the Rich

by Peter Hart

Meet the Press hosted what David Gregory dubbed a "special economic roundtable" on December 2 that included "CNBC's dynamic duo," Maria Bartiromo and Jim Cramer. But Bartiromo's comments about tax increases for the wealthy needed a factcheck.

She started by making a familiar conservative point about the so-called "fiscal cliff"– that the White House talks about ending tax cuts for the wealthy, but will not talk about spending cuts:

And the fact is that I find it extraordinary that we are zeroing in on this discussion only about taxes, and we do not have this kind of elaborate discussion when it comes to spending cuts. Two points here. Number one, Americans realized that the three biggest drivers of our debt are Medicare, Medicaid and Social Security. We need structural change. We haven’t heard that.

Let's step in here for a second: When did Americans "realize" any of this? When they're asked, thev tend to oppose cuts to these programs by substantial margins. There was an election last month; surely voters could have sent a message about their desire to cut these programs.

She went on:

Number two, on taxes, you really can't put all of the taxes into one category. Dividend taxes, for one, is probably the biggest threat to the markets and the economy right now, when you're just looking at taxes. And dividend taxes are not a rich tax, nor are capital gains. You’re talking about pension funds, 401(k) plans, investments in companies that pay dividends. If you’re expecting a dividend tax to go from 15 percent to 44 percent, that completely removes the opportunity or the incentive to buy dividend-paying companies. And that’s going to hurt not just the rich. That’s going to hurt everybody if, in fact, we were to see that. That’s very dangerous, and it is going to create a massive selloff.

For starters, income from 401(k) retirement accounts is taxed as normal income when funds are withdrawn from those accounts, so it is hard to see how that would be relevant. It has been, however, a popular media talking point in discussions like this–like when then-CNBC host Erin Burnett declared that a capital gains rate cut meant that "the half of Americans that own stocks get a benefit there as well.")

The truth is that tax breaks on dividends and capital gains are most certainly a "rich tax." This chart from the Citizens for Tax Justice shows that the overwhelming share of these tax breaks goes to the top 1 percent:

Or consider this chart from the Center on Budget & Policy Priorities:

The attempt to portray tax hikes on the wealthy as something else is mostly a misdirection; as the New York Times reported today (12/3/12):

Many economists agree than an increasing proportion of the entire equities market is now held by retirement investors whose holdings are not subject to current tax law; by foreign investors who don't pay American taxes, or by institutional investors like insurance companies and pension funds that are exempt from taxes.

Or, to put it another way: According to the Congressional Research Service, the most significant contributor to the growth in inequality from 1996 to 2006 was dividends and capital gains. That income has enjoyed a massive break over the past dozen years.

If it's important to have an "economic roundtable," then Meet the Press should book a guest who might challenge these very familiar, very misleading talking points–or find a host who can do the same.

© 2012 Fairness & Accuracy In Reporting (FAIR)

Peter Hart is the activism director at FAIR (Fairness & Accuracy In Reporting). He writes for FAIR's magazine Extra, and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly" (Seven Stories Press, 2003).

Some Better Targets for the People Who Hate Government

by Paul Buchheit

One of the pleasures of a weekend away from the city is visiting with people who express points of view that are different from my own. A lot of them hate government. Their comments are sprinkled with colorful references to taxes, waste, and socialism.

Countering with facts and statistics doesn't seem to work. Instead, listening to their rants can be educational for a progressive, because the anti-government sentiment highlights the masterful job done by conservatives and the wealthy over the years, as they have basically convinced much of America to argue against themselves on matters of politics and the economy.

It would make more sense to take on the real villains.

1. Medical Providers

They're taking a lot more of our money than Medicare does. According to the Council for Affordable Health Insurance, medical administrative costs as a percentage of claims are about three times higher for private insurance than for Medicare. The U.S. Institute of Medicine reports that the for-profit system wastes $750 billion a year on waste, fraud, and inefficiency. As a percent of GDP, we spend $1.2 trillion more than the OECD average.

That's an amount equal to the entire deficit wasted on private medical care companies. One out of every six dollars we earn goes to doctors, hospitals, drug companies, and insurance companies. All good reasons to redirect our hatred.

2. Retirement Brokers

Various reports have concluded that administrative costs for 401(k) plans are much higher than those for Social Security -- up to twenty times more.

It would be difficult to find, or even imagine, any short-term-profit-based private insurer that is fully funded for the next 25 years. Social Security is. It works for all retirees while private plans work for a limited number of investors.

3. Banks

Government is often blamed for local budget shortfalls, but cities and towns around the country have been repeatedly victimized by a "bid-rigging" process that diverts billions of dollars -- a few thousand at a time -- from numerous unsuspecting communities to the accounts of a few big banks.

Individual homeowners, especially minorities, have also been victimized by the banks. Because of the housing crash and the corresponding decrease in home values, black households lost over half of their median wealth, and Hispanic households almost two-thirds.

There are scandals and scams galore: the privately run Mortgage Electronic Registration System (MERS) headed up the illegal foreclosure business; the banking association LIBOR was guilty of interest rate manipulation; and plenty of financial institutions have engaged in the subtle art of imposing hidden fees. Credit cards are loaded with "gray charges" like surprise subscriptions and auto-renewals that cost the average consumer $356 a year.

Yet we're forced to keep paying. Shockingly, it has been estimated that 40% of every dollar we spend on goods and services goes to banks as interest.

Public banks, on the other hand, focus on the needs of communities and small businesses rather than on investors. The most well-known example is the Bank of North Dakota (BND), which has successfully worked with local banks throughout the state, promoting business growth through loans that a larger bank might be reluctant to make, while managing to turn a profit every year for the past 40 years.

4. Higher Education Operators

Outside of the banking industry, there may not be a more egregious example of public abuse than the expropriation of higher education by profit-seekers who have subjected underemployed young people to years of student loan obligations. The collection of outstanding student debt is managed in good part by big banks like JP Morgan and Citigroup.

In most countries tuition remains free or nominal, but in America, as noted by Noam Chomsky, the belief that education strengthens a country is giving way to a philosophy of paying for your own educational benefits. Meanwhile, the "corporatization of universities" has led to a dramatic increase in administrators while relatively expensive programs like nursing, engineering and computer science are being cut.

But the easy loans keep accruing interest long after college ends. With a hint of foreboding, the Consumer Financial Protection Bureau and Department of Education reported that the student loan debacle has been fueled by the same forces that led to the subprime mortgage collapse.

5. Big Box and Fast Food Companies

Smaller government is promoted by the very companies that make record profits while forcing their employees to accept public assistance.

While McDonald's enjoyed profits of 130 percent over the past four years, and Yum! Brands (Pizza Hut, Taco Bell and KFC) made 45 percent, and while the Walton family made $20 billion in one year, the median hourly wage for food service workers and Walmart employees is about $9 an hour. Many workers are stuck at the $7.25 minimum wage, which according to the National Employment Law Project is worth 30 percent less than in 1968.

Food service and big box store employees, among the fastest-growing job segments in the nation, are making barely enough to stay out of poverty. And it's not just the employees who are subsidizing their bosses. We all are. Low-wage employees are more dependent on the food stamps and Medicaid that are paid for by our tax dollars.

Some Alternative Targets: Panic, Poison, Plowing, Postage, Prison

What is the incentive for private companies to deal with tragedies like Hurricane Sandy? The Pacific Standard aptly stated that "the free market doesn't want to be in the flood business."

What is the incentive for private companies to keep the poisons out of our drinking water? Without sufficient government regulations the Clean Water Act was violated a half-million times in one year.

What is the incentive for private companies to plow the county roads? Or to reduce the number of prisoners in profit-seeking prisons? Or to allow you to send a birthday card for just 45 cents? Or to simply treat its customers with respect rather than as a source of profit?

The "invisible hand" of the free market is unable, or unwilling, to satisfy the needs of society in all these areas. For that it is worthy of our contempt.

Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Conservative Myths and the Death of Marlboro Man

It’s Time to Leave Marlboro Country
by John Atcheson

Those of a certain age remember TV ads featuring the Marlboro Man – a rugged individual who rode a horse through an America that even then had long since disappeared. He was self-reliant. No moocher. Didn’t need government handouts. Didn’t need government. What he needed was cigarettes.He inhabited Marlboro Country. An imaginary nation populated by people who didn’t need each other.

The Marlboro Man is dead. Died of cancer. Really. Induced no doubt by those Marlboros he sucked down. Two other Marlboro Men also died of lung cancer (http://en.wikipedia.org/wiki/Marlboro_Man).

Of course, the whole thing was an extraordinarily destructive myth – just like the myths the Republican’s have been selling for 30 years, now. Rugged individuals who don’t need no gubmint’. A private sector much like Marlboro Country – where all good things happen by pure serendipity, and where we don’t need no stinkin’ regulations or taxes. Where small businesses are invoked as the modern-day equivalent of the Marlboro Cowboy.

This is the bull being marketed by Republicans to the American people. In reality, conservatives have been working with giant corporations and the uber-rich to systematically siphon money and power into the hands of giant corporations and the obscenely wealthy (http://www.salon.com/2012/04/15/economy_killers_inequality_and_gop_ignor...).

This is why they’re threatening to take us over the fiscal cliff. This is why they still characterize the uber-rich as “job creators,” even after it has been clearly shown that a healthy middle class is the real source of job creation (http://www.forbes.com/sites/johntharvey/2012/06/17/job-creators/). And they continue to hawk tax cuts for the rich as their magic elixir for the economy long after it has been clearly demonstrated they reduce the middle class’s share of the economic pie, to the detriment of the economy (http://thinkprogress.org/economy/2012/09/17/857861/study-tax-cuts-rich-n...).

Let’s say that again, in words that even Fox News and the Wall Street Journal can understand. The whole trickle-down, job-creator approach to economic growth doesn’t work. You get nada, zip, zero, zilch, n-o-t-h-i-n-g from it in terms of economic return.

How about austerity? It has become glaringly obvious that austerity budgets in a time of economic slow-downs are a recipe for economic disaster. It’s never worked in the past. And now austerity budgets have brought on severe recessions in Spain, England, Ireland, and Portugal, and they are threatening to do so in France and Italy.

Austerity budgets are – and always have been – about disabling government. And so conservatives invoke hoary myths like the Marlboro Man and Marlboro Country – so they can justify cutting taxes to the bone. And then, when government can’t function because it’s been starved … well, that proves them right.

This economic philosophy will bring about the same end as that faced by the Marlboro Men. A country dying from within. Cancer in the case of the Marlboro Men, plutocratic power grabs in the case of our country. Like cancer cells, the power of the plutocrats will grow exponentially, at the expense of the host, if left unchecked.

But it’s not just the fiscal cliff and faux austerity. On issue after issue, Republicans are trying to take us back to that mythical Marlboro Country.

Climate Change? No such thing, they tell us. Incredibly, one of their lead spokesmen on climate policy – Senator James Inhofe -- is an ignorant know-nothing with no scientific training in hock to fossil fuel companies (http://www.desmogblog.com/james-inhofe). Only in Marlboro Country would such a thing make sense.

Here again, as long as we inhabit Marlboro Country, Earth’s fate is likely to be the same as the one that befell the Marlboro Men – consumed by a sickness borne of an unholy brew of ignorance and greed.

What we need is a little political chemotherapy to excise these cancerous myths from our national dialogue once and for all.

You’d think this wouldn’t be too much to ask. We just had a national referendum on what kind of country we want, and progressives won.

But you would be wrong.

Obama may have the upper hand on the fiscal cliff, but he still talks of a grand bargain on taxes, benefits and debt; and he trembles at the thought of tackling climate change.

As nations met in Doha last week in an effort to tackle the greatest threat ever to face the world, the press was mute, and Democrats and the President refused to lead, while they continued to encourage drilling (http://www.usnews.com/news/articles/2012/01/26/obama-administration-anno...) and appease Wall Street.

We are at a crossroads. We face unprecedented challenges; we can see unprecedented opportunities. We have a crumbling infrastructure; an educational system in decline; an economy that is robbing the majority to enrich a small minority (http://www.theatlantic.com/business/archive/2012/09/us-income-inequality...); a climate that is rapidly changing in ways that will – literally – kill, maim, impoverish, starve and sicken man and beast.

Unfortunately, exit polls show that while a sizeable majority of Americans hold liberal views on an issue-by-issue basis (http://www.ourfuture.org/report/2011051806/american-majority-project-pol...), many people still buy the conservative meta-myths (http://www.breitbart.com/Big-Government/2012/11/06/Exit-Polls-Majority-o...) – a nation defined by dead and dying Marlboro Men living in a mythical and cancerous Marlboro Country.

Now is not the time for pragmatism, nor the time for negotiation. It is a time that demands leadership.

There are far more dangerous cliffs in our immediate future than the fiscal cliff. We can only avoid them if we reject the disastrous conservative myths that have infected our public discourse; replace them with values and principles that respect science, are based on reason and empiricism; and confront the axis of money and power that has absconded with our Democracy.

The Marlboro Man is dead. He died of cancer. We must root out the cancer within if we are not to share his fate as a nation.

John Atcheson is author of the novel, A Being Darkly Wise, an eco-thriller and Book One of a Trilogy centered on global warming. His writing has appeared in The New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News and other major newspapers. Atcheson’s book reviews are featured on Climateprogess.org.

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