Class Warfare Blog

February 23, 2011

Tax and Spend, My Ass!

Latter day conservatives have excoriated Democrats as being “tax and spend liberals.” They, on the other hand, believe in “getting government off the backs of ‘the people’” by cutting taxes, removing business regulations, and minimizing the size of government. Unfortunately for us, all of these Republican ideas have been tested in the last 30 years and none of them has worked. (I won’t go into the research because facts apparently have no weight in a political discussion.) Undeterred, the current Republican push is for more of the same.

On the contrary, one can make an argument that the one and only purpose of government is to redistribute wealth. Imagine trying to run the military funded by bake sales and selling candy bars at the local WalMart. While only a few like to be taxed, it is unthinkable to do away with taxes. We, through our government, confiscate part of everyone’s produce to pay for what we collectively need to do: things like pay for the military, build roads and airports, provide a postal service, provide for the elderly, and schools for our children. Imagine what the world would be like if each of these efforts were done like a charity. Public television fund drives are annoying enough, imagine collecting enough money to run schools, police departments, sanitation, water districts, food inspections, road repairs, etc.

So, clearly governments must tax and spend. When Democrats do it, the data show that everyone, even the wealthiest Americans, do better than when Republicans do it. (Which raises the question of why are wealthy people all Republicans? They do better under Democratic Presidents.) The poorest of Americans do marginally better than the richest under Democrats but a 1% increase in income for a wealthy person is a whole lot more money than a 1% increase for a poor person. Democrats have a focus on fairness for all. Republicans less so.

Republicans have lost their way. Conservatives of just a couple of generations ago placed a great deal of focus on maintaining the stability for American families. They supported things like increases in unemployment insurance, almost automatically. They spoke at length about the importance of maintaining the stability of the American family, etc. Currently school teachers are being described as a drag on progress, people on unemployment insurance are lazy and shiftless, and public employee pensions, originally offered as a substitute for better pay, are being blamed for the financial ills of local governments, when the current governmental financial difficulties clearly stem from a significant decline in government income caused by ill-advised tax cuts and a few wars and things, one of the “things” being millions of people having lost their jobs and are no longer paying taxes.

All that “family friendly” rhetoric and action is long gone and here is why. Prior to Ronald Reagan, the top marginal income tax rate was 70% (it had been higher). It is important to realize that very, very few people made enough money to have any income taxed at that level. Everybody’s first, say $8,000 was taxed at one rate, and then as the amount of income increased, the additional amount was taxed at a higher level, and a higher level, etc. People talked incessantly about “which bracket” they were in, as the number of tax rates was quite large. When President Reagan brokered a new tax structure, there were just three levels (roughly 15%, 28%, and 39%). Currently you have to make over $250,000 before the top rate kicks in and the Republicans in Congress used every trick in the book to make sure that the current top rate of 35% didn’t spring back to the previous 39% when the Bush tax cuts expired. (They argued that rich people created jobs with that money, a claim for which there is no evidence.)

But the bigger story is the effect the transition from a top rate of 70% down to 39% has caused. In the days of the 70% and higher marginal tax rates, corporations found other ways to compensate executives (executive bathrooms, corporate jets at their disposal, etc.) because the executive only got $30 out of every $100 of compensation at those high levels, therefore the corporations had poor leverage, so they held on to their money. Back then, top executives might make 15-20 times as much as the average worker did in their company. With the tax rule change, executive’s pay began to skyrocket. After all, for every extra $100 of extra pay, they were getting over $60 now. So, CEOs changed from boasting about the Picasso hanging in their office (owned by the corporation) to boasting about how much money they made. They finagled Boards of Trustees to maximize their pay and now it is not unusual for CEOs to be making 250-300 times what an average company worker makes.

In one case, a hedge fund manager made over a billion dollars in a single year. To put this in perspective, consider that there are about 264 work days a year, with say 11 holidays and two weeks vacation, that comes to about 1944 hours of work (at eight hours per day). If one were compensated with a billion dollars, that works out to a tad over $514,000 per hour. (Do you honestly think anyone’s services are worth that much . . . in a fair game?) CEOs generally aren’t anywhere near that level of compensation, but they are way up there, compared to you and me. (Multiply your salary by 200-300 for an estimate if you are in a big company.) The consequence has been that whereas with the higher marginal rates, the power resided in the corporations, now the power resides in some very wealthy people. Corporations don’t have personalities, people do. And some of the very wealthiest have decided a long time ago that the “land of the free” referred to “economic freedom” meaning one is allowed to buy what one wants: politicians, political parties (the so-called “Tea Party was bankrolled by billionaires), and even whole elections.

These richest of the rich have now decided to take over control of public policy. First step: get the Supreme Court to overturn decades of settled law to declare corporations “persons” for political purposes, just as they are considered “persons” for business purposes (a bizarre but acknowledged fiction). In this manner, these wealthy persons can use their corporations many in stead of their own. The next step: kill the unions. They do wish to create jobs, really! They just don’t want those jobs to pay very well, because it hurts their bottom lines. Instead of making only $200,000 per hour, they may only make $190,000 per hour. And while good paying union jobs make for stable families and stable communities, well, families will just have to fend for themselves as the billionaires do. After all, they are free to buy what they can, so every one lives in the land of the free. The shackles aren’t made of steel any more, they are economic.

Our only hope is to tax the rich to restore the balance. The gravy train is a runaway and we aren’t on it.

February 22, 2011

Republicans Claim: Government Knows Best!

Filed under: Politics — Steve Ruis @ 1:47 pm
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In an amazing about face Republicans across the country are now claiming that the government knows best! Even Reaganites who have gloried in the Great Communicator’s tag: “Government is not a solution to our problem, government is the problem!” have changed their tune. Now government isn’t the problem, in fact the government knows best.” The new strategy was unveiled by the newly elected Republican Governor of Wisconsin who has drafted legislation removing the collective bargain rights of the people in the public sector because, well, in their situation there is no wise private sector CEO to govern them, so government knows best and can make the decisions needed without the interference of the people or workers.

While not referring directly to the People’s Republic of China, a country notorious for their “the government knows best” stance, Governor Walker of Wisconsin clearly is envious of the control exercised by Chinese bureaucrats. “Local school boards and other government entities need more control and the unions are just in the way,” inferred Walker in numerous statements to the press while public opinion polls sided with the unions. “I will not cave in to the voice of the people,” stated Walker, clearly in the thrall of Chinese political thought.

Republicans in state office around the country have rallied to the call for “Chinese style government” by proposing legislation to do away with unions and, if that is not possible, make the conditions for their existence so onerous that they will give up the ghost through sheer exhaustion.

A new era of Republican ideology has begun!

Okay, maybe I paraphrased a quote or two, but in essence, Republicans will do anything to help their friends and hurt their enemies, principles be dammed. How long can we in the middle class continue to take these people seriously. Having no shame, they continue to persist in their synthetic histories and ideology while keeping straight faces. In fact, being able to deliver such patent nonsense with a straight face is a requirement for leadership in the Republican party.

Death to all Charlatans!

February 7, 2011

To Recuse or Not Recuse, That Is the Question

Filed under: Politics — Steve Ruis @ 2:01 pm
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It is common practice for judges to recuse themselves from cases in which they have substantial interests. For example, a judge who is scheduled to hear a case in which one of the parties was someone he or she represented back when they were an attorney is expected to step away from that case and have another judge hear it. (The word recuse comes from Latin roots meaning to refuse.) This is currently in the news as Supreme Court Justice Clarence Thomas is expected to soon hear the case regarding the constitutionality of the America’s Healthy Future Act (actual name of the final health care bill, no, really!) while his wife has been selling her ability to affect the outcome of such cases and has actively worked to defeat the health care bill while it was being crafted. (She has already stated in print that the bill is unconstitutional!) Since there is no superior court to overrule a case in which a Supreme Court Justice does not recuse him- or herself in error, this judgment is left entirely to the justices themselves, hence the problem if Justice Thomas doesn’t recuse himself. (Not even the Chief Justice has a say as he is in a “first among equals” situation.)

That issue aside, I find it funny that judges espouse the practice of recusing cases to uphold the integrity of the judiciary but apparently we all are very comfortable having our elected officials voting on measures for which principal parties have “donated” huge sums of money to those officials in spite of the fact that we have laws against “influence peddling” (essentially buying/selling the votes or decisions of our officials). So, why aren’t we screaming bloody murder when Congressmen who have accepted hefty “donations” (the new civility prevents me from calling them bribes) from the health care industry, for example, actual vote on health care measures, measures that directly affect the well-being of the businesses making the donations? Is it just because we are used to this?

The only solution to this problem I can see is the one I have proposed already. Elected officials must be allowed to only collect political contributions from people and businesses in their districts. People and businesses in Arizona have no business chiming in on who gets elected Senator in Maine. That is the business of the people in Maine. If your permanent address or the address of your business’s headquarters is in Arizona, you can directly influence the senatorial elections in Arizona, but not all over the country. You still have free speech rights, but you or your business should not be allowed to donate directly to a campaign in another district nor should you be allowed to coordinate your efforts with that campaign. If you want to buy print and TV ads to support a candidate out of your district, you may exercise your free speech rights of course, but these ads must be clearly labeled at the top and bottom with the words “Paid For by Outsiders” so voters can tell where that speech is coming from. We have tried to regulate such free speech by requiring that all of such ads be identified as to who paid the bills, but all we got was “Paid for by Citizens for Creative Action, . . . Moms for Motherhood, . . . the Family Values Council,” etc. Political action committees were set up to front for the actual donors and we were still in the dark. “Paid for by Outsiders” is all of the information voters need to distinguish information from someone who will be impacted by decisions of the official being elected from someone trying to buy influence with that official.

I would go further and include all ballot measures in this scheme. Why groups in Utah were spending millions of dollars to help defeat Prop. 8 in California is beyond me, but that proposition was the business of the people in California to decide and not the people from other states.

And I know there are politicians who claim that they don’t vote for health care business interests (for example) because they got donations from health care insurance companies, but they got the money because of their votes. If any of you out there believe this, you really must ask the question why it was that newbie senatorial candidates in the recent mid-term elections were rushing to Washington to do fundraisers the day after they got their party’s nominations. It is the money that gets them elected in the first place and it is the money that makes them beholden to those who gave it to them. If you do not understand this, I have some great “wetlands” property I want to sell you in Florida.

As more and more of this county’s wealth gets concentrated in fewer and fewer hands, the opportunity for this nascent oligarchy to just control things monetarily is immense. While many of the health care reform act opponents railed against the 2200 page length of the beastie, I don’t hear them complaining likewise about the length of the current tax code which dwarfs the puny health care bill. And 80% of our tax code describes specific perks for specific (mostly business) interests. With the wealthy owning Congress, expect those pages to expand. It is not by accident than two thirds of U.S. corporations paid no taxes last year.

If common decency and tradition don’t do the job, then we must reset the rules of the game. Would that we could institute voting recusals as a hallowed tradition of Congress.

February 2, 2011

Obama—The True Conservative?

Filed under: Politics — Steve Ruis @ 11:14 am
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In my last post I asked the question: “Who are these people?,” meaning the new Republicans. They describe themselves as conservatives, but one must ask: what kind? These are most definitely not the conservatives of my younger days. The first conservative voice I became aware of was William F. Buckley, who founded National Review magazine, still a standard bearer for the U.S. conservative movement, and had a television program called Firing Line. Bill Buckley was a Yale University educated intellectual. Following on the heels of Buckley was George Will, who had M.A. and Ph.D. degrees in politics from Princeton University. George is still plugging away, but no longer is at the point of the conservative spear. Today’s learned conservative voices are more like David Brooks, who holds a degree in history from the University of Chicago, and is a thoughtful and intelligent man who writes a regular column for the New York Times newspaper (part of the liberal mainstream press!) and appears weekly on National Public Radio’s program The News Hour (NPR is a conservative whipping boy). Mr. Brooks,as wise and articulate as he is, is not the point of the conservative spear either.

At the point of the spear are the likes of Rush Limbaugh and Glenn Beck. Limbaugh attended Southeast Missouri State University for a year but, “He flunked everything,” according to his mother. Beck, a Fox “News” star, had the singular accomplishment of “getting high” on marijuana every day from the age of 15 to 30. He managed to graduate high school in there. Neither has run for or held political office or even helped run a campaign as best as I can find out. Yet they make millions of dollars a year “commenting” on politics. And these two vigorously describe themselves as being “entertainers” to hide from the impact their hate-filled rhetoric has on our political and social processes.

Where or where have the thinking Republicans gone? Like teenagers, they have gone “out” swelling the ranks of “independents” who now outnumber the Republicans and Democrats as the largest segment of the U.S. electorate.

The remaining Republicans like to claim that the U.S. public is “conservative” and that they represent the core of the country. This untruth (the new civility forbids me the word lie) is hammered away at as it is a featured talking point for Republicans. Say something over and over and it sounds true after a while. Actually this is not true, the U.S. public is schizophrenic. When we feel uncertain, we tend to be conservative, trying to hang on to what we’ve got. When times are good we tend liberal, being generous with part of the spoils. And we are not consistently so. What we exhibit as an attitude does depend on the issues.

What has happened to the Republican Party is what movement conservatives have wanted all along, all but the most extreme conservatives have been purged from the party, like a river sweeping away the lighter stones, exposing bedrock. The “Tea Party” (which is not a party) is part of the exposed bedrock. It was always there as part of the Republican Party because, well, what other choice did those folks have? But this is a small part of the U.S. electorate, just as liberals are a small part. Let’s be generous and place both blocks at about 20% of voters which leaves 60% in the center. Those in the center are neither conservative nor liberal, they are basically pragmatists, asking for our politicians to do what seems to be needed at the time.

The conservatives of my youth were asking questions like “What would a conservative welfare state look like?” because they admitted that a welfare state was in no way in conflict with conservative principles. True conservatives value social stability through guiding institutions. But true conservatives have been drummed out of business by movement conservatives who think that the institution of government should play as small a part in our lives as is possible. This ignores that fact that true conservatives have always granted that government is the only political actor that can protect the poor from the imbalances of free market capitalism, for example.

So, we have the strange situation that President Obama, labeled a socialist and a liberal by the movement conservatives, and who actually represents the center (mostly) is behaving like a true conservative as the times and the Great Recession dictate. (President Nixon believed in spending to stimulate the economy and President Reagan, in eight years, killed exactly one federal program.)

And now the movement conservatives, who are far to the right of where the Republican Party has ever been and well to the right of the voting population, are in a position to exercise their will through their control of the House of Representatives. If you want to know how things will work out I ask this question: Which U.S. President best exemplifies holding true to the principles of the movement conservatives?

The answer: George W. Bush. His faith based initiatives, his wars of aggression, his tax cuts for the rich, his disdain for the “liberal media” etc. all hewed to the line of the movement conservatives. So we have a preview of how their ideas will work.

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