Class Warfare Blog

July 11, 2018

It Figures

When the Trump tax cuts were imposed (you remember don’t you: the small temporary tax cuts for us and the large permanent tax cuts for corporations and the wealthy) it was claimed by the Repubs that the money saved by the corporations would end up spurring growth, even result in raises for workers. (Right, those results were to be delivered via unicorn, I believe.)

It was pointed out that the last time such a tax cut was implemented, corporations spent the bulk of the savings in buying back shares of their own companies. Well, surprise, surprise, the same thing happened this time. (Who’d have known it could be this complicated?) In a post on the Naked Capitalism web site (Michael Olenick: Update Confirms That Share Buybacks Are Still Corporate Suicide) extensive studies on the effects of such buybacks show that “not only do buybacks not lead to growth in a company’s market value, they are strongly correlated to a declining market value.”

In other words, the effect of their behaviors is not to “grow” the companies but actually to “shrink” them! To quote from the piece:

Corporate executives and directors are apparently bereft of ideas and the confidence to make long-term investments. Rather than using record profits, and record amounts of borrowed money, to invest in new plants and equipment, develop new products, improve service, lower prices or raise the wages and skills of their employees, they are “returning” that money to shareholders. Corporate America, in effect, has transformed itself into one giant leveraged buyout….

And since “everyone” is doing it …

The most significant and troubling aspect of this buyback boom, however, is that despite record corporate profits and cash flow, at least a third of the shares are being repurchased with borrowed money, bringing the corporate debt to an all-time high, not only in an absolute sense but also in relation to profits, assets and the overall size of the economy.

This not only burdens those corporations, but also drags down the entire economy.

So, if these buybacks are not what anyone might call the best use of those tax savings, why are they being done?

Okay, boys and girls, whenever anything political happens what are we supposed to do? (Follow the money!) That’s right! So, who benefits from these buybacks the most? It turns out that … wait for it … it is the corporation executives who actually benefit the most. You see the buybacks inflate the prices for the corporation’s stock. CEO’s and their ilk are now being remunerated largely via stock options. And, corporation executives constitute the largest segment of the 0.1% of “earners.” And that class of “earners” is the one making the bulk of political contributions currently. Does the picture now come together for you?

Think of the corporation executives as sort of modern pirates. (Can you see the eye patches and hear the “aaaarghs”?) These executives started out as treasure ship captains but, well the temptation was too great, and they stole their own ships. Well what is the government’s politicians to do? When they sailed into action to recapture the ill gotten gains, they received handsome “gifts” from the pirates to the extent that they have become dependent upon those “gifts” and now seek to facilitate the pirate’s behaviors. The government stopped pursuing the pirates for taxes and actually invited them to submit their ideas on how the government could be run better.

And all of the rich assholes lived happily ever after.

When are we going to wake up? Stock buybacks should be illegal or strictly regulated (as they used to be). They are tools to manipulate the stock market by insiders, for Pete’s sake! But when we ask our politicians what the intend to do all we get is “Arrgh!” and a wink from under an uplifted eye patch.


July 10, 2018

How Stupid Are We?

Are teachers taking “penny wise, pound foolish” to a new extreme? Not long ago we were treated to a display of anti-worker politics in the state of Wisconsin by its newly elected Republican governor and its republican dominated state houses. According to, there were consequences for state workers “One Wisconsin labor organization representing teachers lost 60 percent of its members. Overall in Wisconsin, the percentage of union members in the workforce declined from 14.1 percent in 2011 to 9 percent in 2016. Simultaneously, pay and benefits declined. For teachers, salaries sank 2.6 percent and benefits dropped 18.6 percent.”

Now, consider that union dues are somewhere around $100 per month, working ten months per year so the total cost is about $1000. By “saving” that money by dropping their union membership or refusing to pay “fair share fees” (which BTW by law cannot include charges for political representation, which makes the SCOTUS ruling based upon free speech a farce), this is what the total cost was: apparently those unions lost $3000 per year in fringe benefits right away ( and then they lost even more in salary reductions and missed salary increases. Save $1000 to lose $6000-$10,000 or possibly your job! What a bargain! Sign me up … not!

Boy, all of you teachers fleeing your unions or refusing to pay fair share fees are really showing them!

Politically teachers need to wake up. The people behind these political moves are anti-union, pro-business plutocrats. They are not your friends. You do not have access to them. Your union, on the other hand, is made up of your colleagues, who you do have access to, and if you do not like the direction your union is going, you can run for office and change it from within!

I learned this lesson the hard way also … but I did learn it.

Support your local union or start counting your food stamps because that is where you are going.




July 4, 2018

Republicans (Gasp!) Tax Churches!

Well, the Tax and Spend Republicans are at it again, this time accompanied by the howling from their evangelical Christian supporters. In their latest omnibus tax bill, you know the one in which they gave temporary small tax breaks to you and me and permanent large tax breaks to the wealthy and corporations, they also included this tidbit: churches, hospitals, orchestras and other historically tax-exempt organizations are to begin paying a 21 percent tax on some types of fringe benefits they provide their employees!

I am sure the Republicans will blame this on the Democrats because those organizations don’t pay income taxes, consequently lawmakers couldn’t take away fringe-benefit deductions, so instead they created a 21 percent tax on the value of some of nonprofit employees’ benefits.

The main benefits affected are transportation-related, like free parking in a lot or a garage and subway and bus passes. It also targets meals provided to workers and, in some circumstances, may affect gym memberships.

Apparently this is just the camel’s nose under the tent. Next up the major fringe benefits of parsonages, vehicles, and other benefits provided to clergy. And then, churches will have to pay property taxes because, well, fires aren’t satanic, so there is no freedom of religion distinction applicable to fees needed to support fire departments as well as police departments (needed to protect Christians from atheists and lesbians trying to take away their religious freedoms).

Ah, sweet progress! Let the sacred cow harvest begin!

June 3, 2018

Another “Truth” of the Recent Tax Cuts Bites the Dust

Another “truth” (aka lie) that was used to sell the Republican tax cuts has been laid to rest. That “argument” was that corporations will take their tax savings (the really large ones as compared to the pittance you got) and use it in part to increase the wages of their workers. Wages have either been stagnant or gone down for working class people for decades. I quote one of the post’s quotes: “….The moderator asked the panel whether there would be broad-based wage gains again. ‘It’s just not going to happen,’ [Troy] Taylor, [CEO of the Coke franchise for Florida,] said. The gains would go mostly to technically-skilled employees, he said. As for a general raise? ‘Absolutely not in my business,’ he said.”

The gains from the tax cuts went to executives and to shareholders in stock buybacks (which raise the value of the shares still being held) and the bulk of all stocks are help by the wealthy.

Read all about it: More Evidence of Increasing Deflationary Pressure on Wages

May 31, 2018

The Insidiousness of Neoliberalism

aka The Empire Strikes Back

It may end up being a great irony but the grand American Experiment, the first major attempt at modern self-government (We don’t need no stinkin’ royalty.”), may end up having been created under a misapprehension.

When the U.S. Constitution was created the “founders/drafters” assumed (there’s that word again) that the “people” in power, running the government for “the People,” would be folks just like them: wealthy landowners who had the education and the time to apply their experience and powers of thought to the enterprise. I imagine that it was quite a shock to them when in short order, the propertied, wealthy (male) class was eschewed for politicians of the “middling” sort (merchants, craftsmen, you know “middling” types). I love the sheer disdain embedded in the term middling.

Well, never mind, the natural superiority of the wealthy class will win out, plus there was money to make in expanding the borders of the country and reaping the harvest provided by their god. Just clear off the Indians and bring in the salves and voila! When that was fairly well done, the wealthy got back to wealth accumulation in the forms of gold and property resulting ultimately in the Gilded Age of the late 1880’s–1890’s. Labor was oppressed, racism was rampant, women were subdued, and technology was creating opportunities to make money hand over fist. There were so many immigrants seeking work that wages were so low that the wealthy had servants galore. Gosh, can it get any better than this?

A small hiccough fell into the process of elevating the rich, and keeping them elevated, in the form of the Great Depression and World War II, the aftermath being a common understanding in ordinary Americans that “we were all in this together” and paying attention to the common good as opposed to solely individual rights was “a good thing.” That couldn’t be allowed to continue, of course, as that attitude was blocking the return of the rich to their rightful place of guiding society (for their own benefit, of course). The New Deal had to be remade into the “No Deal” of Donald Trump.

Then along came neoliberalism (beginning slowly in the early twentieth century, a horse the rich could ride where they wanted to go (back to the top). Neoliberalism exalted the individual, eschewed any kind of collective action by citizens save the military and police (to protect wealth from theft) and courts (to protect contracts). Free markets were the mechanism that would deliberate societal concerns, those and the innate actions of individuals as economic actors with free will (and greed). Think Ayn Rand here. Think the Koch brothers.

“Realize that the neoliberals are not working toward their ideal world, they are putting the finishing touches on it right now.”

Neoliberalism involves the elevation of individuals and the diminishment (or elimination) of collective action and any responsibility to the environment, the future (our children), the body politic, or people in general. Corporations that used to have major goals like “to be good citizens in their communities,” now are guided solely by the goal of increasing shareholder value, a concept that is bogus in the first place but serves the goals of neoliberalism, so it was elevated.

This is becoming hardwired into our culture. While I am very grateful for all that has been done to make my life what it is, via a quite inexpensive education down to a system of roads that encourages me to travel, the idea of gratitude is being reduced to “acknowledgement of a debt,” something only losers would acknowledge. The idea of debt forgiveness has been eliminated from many branches of our culture, especially Christianity (a long term effort). Consider the Lord’s Prayer. The specific variants I address are those which say “and forgive us our debts” versus those who say “and forgive us our trespasses.” In the ancient world debt jubilees were quite common, a period at the end of which all debts had to be settled or forgiven. It was hard-wired into Judaism but struggles to find any footing in Christianity or the modern world. Debt forgiveness was eliminated along the way in favor of debtor’s prisons and “pounds of flesh” and the IMF.

Neoliberals prefer the version of the Lord’s Prayer that uses the word “trespasses” (surprise, surprise), but I remember my mother saying the prayer in church, using the word “debts.” A 2000 year old argument that neoliberals have come down on one side of.

Since individuals are paramount, only the “deserving” warrant government help and there are very few of those in neoliberal minds. Blacks are shiftless and dangerous “takers.” Hispanics are lazy and untrustworthy, etc. Both breed too much.

In neoliberalism capitalism is exalted while removing all obligation of capitalists to the larger society (via the cult of shareholder value) as mentioned. “Free markets” and “competition” are promoted but the neoliberals really prefer market capture (think of Microsoft in its boom days, not quite a monopoly but close enough, and all of its anti-competitive actions) with government protection thrown in (think of the bank bailouts of 2008-9).

The foot shoulders of this movement have primarily been Republicans, you know, the “Family Values” proponents. To them, though, a family is lead by an individual, a man of course, making the family an extension of an individual. All of their “family values” stem from there … well as long as the individual men acknowledge the authority of a higher power, for whom the wealthy are a stand in and for whom all of the major religions work.

“The neolibs claim to want to shrink big government, yet they never actually do it. Governmental power is how they will enforce their will over the masses. They do not want less of it, no matter what they say.”

Privatization of public enterprises (schools, post offices, military, etc.) were initially lauded because “government = bad” but when that argument didn’t fly, they carried the water on this effort claiming the government was inefficient, that private ownership and competition would make for a more efficient effort. They ignored the fact that competition creates winners and losers and when it came to our children and delivering the mail, we didn’t want winners and losers. All of the data, so far, have shown the efforts to privatize schools have been less than successful, more costly, and worse, rife with corruption, so evidence is being ignored over ideology (and campaign contributions). The point of strategies like privatization, though, are not just about a preference for the private sector over the public sector, the goal of these strategies is to radically alter power relations, weakening pro-public forces and enhancing the lobbying power and commitment of the corporations that take over public services and resources, thus advancing the plans to dismantle democracy and make way for a return to oligarchy. The majority will be held captive so that the wealthy can finally be free to do as they please, no matter how destructive.

Neoliberalism is, at its core, anti-democratic.

And if you want to see the world as these oligarchs see it, all you need do is open your eyes. When Black citizens in Missouri protested police brutality, they were met with riot police and tear gas and arrests and dogs and prosecutions. But when white supremacists staged a protest rally, the police attacked those opposing the protest. Neoliberals definitely see things in black and white terms. Similarly there are myriad examples of polls of voters identifying things like laws requiring universal background checks to buy guns, but on which Congress still acts to benefit their donors, like the NRA lobbyists. The chances of getting legislation passed that was requested by poor people is zero and by rich people, near 100%. But realize that the neoliberals are not working toward their ideal world, they are putting the finishing touches on it right now.

As additional proof, look at state power being used to reduce state power. If the Republicans are in charge, they use the federal government’s power to restrict the state’s powers and the state’s powers to restrict local government’s power. In Oklahoma, fracking was causing hundreds if not thousands of earthquakes. Several local governments passed rules that limited the rights of frackers in their municipalities until the science of the earthquakes could be pinned down and fixed. The response? The Oklahoma legislature (and Texas, and …) passed a law forbidding the local governments from intervening and the frackers kept working. Localities pass a $15 minimum wage and some states respond by withdrawing the power of the munis to do that.

Neoliberalism is a-n-t-i-d-e-m-o-c-r-a-t-i-c, boys and girls.

The neolibs claim to want to shrink big government, yet they never actually do it. Reagan didn’t do it. G.W. didn’t do it and D.T. won’t do it. Governmental power is how they will enforce their will over the masses. They do not want less of it, no matter what they say.

If I may quote a recent book author:

The United States is now at one of those historic forks in the road whose outcome will prove as fateful as those of the 1860s, the 1930s, and the 1960s,” writes Duke Historian Nancy MacLean. “To value liberty for the wealthy minority above all else and enshrine it in the nation’s governing rules, as Calhoun and Buchanan both called for and the Koch network is achieving, play by play, is to consent to an oligarchy in all but the outer husk of representative form.

Neoliberalism is a cult of the individual in a collective enterprise (one man, one vote, no?). It is no surprise that those who advocate “we each go it alone” are those best equipped to do so (the wealthy). The bigger question is: will we let them get away with it? We have so far.

March 1, 2018

The Tax Cut Was for the Rich? Really?

If you are in the U.S. you should have gotten your tax cut by now. This is in the form of revised withholding tax based upon new tables. Since taxes will be lower, then less needs to be withheld from your paychecks each month and the withholding tables were adjusted beginning in the month of February.

I checked my withholding and voila … I had $164.88 less withheld last month. Multiply by twelve and that means I have $1978.56 more money available for the coming year. Now, I do not trust these calculations. That is just what is being withheld, it is not the actual tax which I will not learn about until a month or so into 2019, so I am squirreling away some of that windfall just in case.

So, my taxes, presumably, are being cut almost $2000. I wonder how well some of the rich folks did?

Warren Buffet, of Berkshire-Hathaway fame, reports that his company made $29 billion dollars the same way, wait … twenty-nine fucking billion dollars!

Okay, well that is a very wealthy company, how does that stack up against its earnings otherwise? The company’s annual statement declares:

“But 2017 was far from standard: A large portion of our gain did not come from anything we accomplished at Berkshire. The $65 billion gain is nonetheless real — rest assured of that. But only $36 billion came from Berkshire’s operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code.”

So, this very successful company made $36 billion dollars through its own efforts … and then $29 billion more in the form of a GOP handout. But, we can be sure that B-H will spend all of that money to boost the economy … or maybe issue bonuses to its few employees … or maybe raise the wages of those few employees. But wait, B-H owns a whole bunch of companies and, in toto, they have 367,700 employees. With that $29 billion they could give each of them $7887, but my guess is that that won’t happen. I won’t be holding my breath for any such miracle as large corporations are doing exactly what they did the last time they got a tax cut. They are buying back their own stock, which raises the price of said stock, which benefits shareholders (84% of all common stock is owned by members of the top 10%), especially a subgroup of shareholders called “corporation executives.” Yep, the people who directly benefit from this action are the people deciding on that action. Anyone surprised at this needs to get a reality check done.

Oh, and the GOP is expecting the “tax cut” to win them the next election. Ha ha ha ha ha … I guess that could happen if the opposition were total morons … oh, wait …




February 10, 2018

What Happened to “My Country, Right or Wrong!”

Filed under: Culture,Politics — Steve Ruis @ 10:08 am
Tags: ,

Conservatives in this country have historically been fond of the country’s institutions, especially the military, the police, the FBI, the CIA, the churches, etc. Conserving the social order was #1 on the list of important things for conservatives and the institutions designed to provide order and to defend the status quo were highly prized by the same. Cynically, I would point out that the class of conservatives also contained the wealthiest members of our society, so it was in their best interest to keep the mechanism that made them their wealth moving like a well-oiled machine.

The current Republican administration, however, while claiming to be nominally conservative, has been throwing conservative ideals to the wind. In attempts to obscure what is really happening, the President has thrown judges and courts under the bus, the Congress under the bus, and most recently, the CIA and the FBI and much else of the “intelligence infrastructure,” under the bus. All to achieve what end, I wonder?

Have all of the true conservatives been culled from the GOP? Have they all been replaced by libertarians and self-serving lackeys?

Seems so.

PS If you do not recognize the phrase in the title, it comes from Richard Nixon’s years in the White House. The Viet Nam war had been going on for a long time and protests regarding it were ramping up … anti-government protests, because the protesters were complaining about the actions of the government. The response came back as the slogan “(I Support) My Country, Right or Wrong!” which really was a response of the government’s current supporters, specifically conservative Republicans. Imagine that, Republicans defending the government! How far we have come!

January 7, 2018

If the Elites Might Benefit, Then Sure, They are For It

In today’s NY Times an article (Medical Research? Congress Cheers. Medical Care? Congress Brawls by Robert Pear) states that there is some bipartisan support for science in our Congress. Here’s the introduction:

“WASHINGTON — They cannot agree on subsidies for low-income people under the Affordable Care Act or even how to extend funding for the broadly popular Children’s Health Insurance Program — two issues requiring urgent attention as Congress returns to work.

“But a more exotic corner of the medical world has drawn rapturous agreement among Republicans and Democrats: the development of new treatments and cures through taxpayer-funded biomedical research.

“For the third straight year, lawmakers are planning to increase the budget of the National Institutes of Health by $2 billion. In the process, they have summarily rejected cuts proposed by President Trump.

“The push for additional funding reflects a fascination among legislators with advances in fields like molecular biology, genetics and regenerative medicine, even as they wage bitter battles over just how large a role the government should play in financing health care and providing coverage.”

When the shade the politicians have thrown is illuminated, it is clear why this support is bipartisan. New medical procedures, even those which prove to be very costly, will help keep the elites alive longer. The elites have told us over and over that “America affords us the finest medical care in the world.” What we didn’t focus on was the use of the word “us.” They were referring to the elites as only they can afford the finest. The fact that our medical care system only ranks somewhere near the middle of first world countries is irrelevant and they know it. Those results are based upon average health outcomes and the elites are paying for treatments and health outcomes that the top 1% get. They do not care much at all about the poor health outcomes that the poor and middle class can afford as those do not affect them directly. But there are many of us and few of them, which means they are more than willing to take our tax dollars to pay for their cures.

Everything you need to see is right in front of your eyes. We only need to believe what they are saying, what they actually are saying and not what we wish to hear.

December 22, 2017

I Wonder … Is This Another GOP “Oops Moment”?

In the recent discussions of business taxes people kept quoting the, now old, marginal business tax rate of 35% when they compared our business taxes with those of other countries. Our marginal rate, that is our highest rate, is indeed higher than most all other comparable countries when you do that comparison. But if you compare our effective tax rates with those countries, the amounts that actually get paid (after all of the loopholes and “special tax credits” and … are factored in) we tend to be lower than most. Under the old system, the rate started at 15% and climbed to 35% as the taxable income rose. (This was exactly parallel to the personal tax bracket structure that also started at 15%, then rose up to 39.5% on income over about a quarter of a million dollars.) But do note that a business was taxed at the 35% rate only on earnings in excess of $10,000,000, so you are not talking about Mom and Pop operations paying anything at that rate. (Constantly referring to small businesses as if they were Mom and Pop businesses (they are not) and only quoting that 35% marginal rate is a form of lying, in my opinion.)

Under the new law, just passed, the business tax rate has been made a flat rate at 21%, that is anything over $1 (one dollar!) will be taxed at the single rate of 21%. I thought they had just reduced the marginal rate to 21% (from 35%) and kept the lower brackets leading up to that, which would mean the 21% only applied to earnings over ten million dollars, but apparently they did not. I am shocked at this because the effective tax rate has been lower than 21% for quite some time. For example, 288 “big and profitable” Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012. This new rate of 21% represents a tax increase on those businesses (if there are no other compensating changes).

I wonder if the Repubs made a mistake in framing this that way. I wonder if they think they got a “two fer” in getting a big business tax rate deduction plus a flat tax, two Republican wet dreams of the recent past, and just fucked it up out of good, old fashioned American incompetence.

If this is true, life is good!


December 20, 2017

We Have Morons Running Our Governments

One of the responses from those in the federal government who were told they could no longer use certain wordsand terms, such as fetus, science-based, climate change, or evidenced-based, responded with “Can we still use moron?” One of the functions of a bureaucracy is to resist change. Ours seems to still be working.

The Republican Party, like the Democratic Party, has stripped away its bureaucracies in favor of … what? The GOP seems now to be run under the influence of deep thinkers, such as Murray Rothbard, an inspiration to many, including the Koch brothers. Rothbard has asked “What is the State anyway but organized banditry? What is taxation but theft on a gigantic, unchecked scale?” According to this intellectual giant, we need to finance all of our collective efforts with bake sales or maybe “I’ve got an idea, gang; let’s put on a show!”

In their world, a person works as an individual and pays all who help him/her, being indebted to no one and then accrues wealth in the form of a pile of gold in the corner of his living room. But they also believe that if they were to die unexpectedly, that their wives and children should then “own” that wealth. But the wives and children didn’t earn that wealth, why should they have any claim to it at all? These conservative savants believe in inheritance, you see, which is a legal thing and immediately their personal philosophy is in trouble. I remember a very wealthy man who left almost all of his wealth to charity when he died, because he didn’t want to deprive his children of the experience of having to work for a living.

Is there any evidence of a culture or society in which there was no form of tax or extracted labor? I do not know of one. If we have collective needs, they must be paid for collectively. Even the libertarian radicals recognize collective needs in the form of the militaries and courts, so how are we to pay for these?

The government is “us” acting collectively. In order for it to work we, collectively, have to have respect for individuals … and individuals, individually, have to have respect for “us.” One of our major political parties has bought into the first, but not the second part of that statement, which means our democracy is in peril. (Guess which one, go ahead, guess …)

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