Monday, November 29, 2010

Still the Best Congress Money Can Buy

By Frank Rich, New York Times

SO America’s latest crisis — until it wasn’t — was airport screeners touching our junk. As this long year lurches toward its end, we all agree that something has gone wrong in America, and we’re desperately casting about for a coherent explanation for our discontent, if not a scapegoat. Alas, the national consensus that the T.S.A. and full-body scans might be the source of all evil fizzled in less than a week. Most everyone got to Grandma’s house for Thanksgiving without genital distress.

The previous transient scapegoat was the Democrats. They were punished in yet another “wave” election — our third in a row — where voters threw Washington’s bums out. But most of the public remains bummed out nonetheless. In late October, the NBC News-Wall Street Journal poll found that only 31 percent of respondents believed that America was on the right track. When the survey asked the same question after the shellacking, the percent of optimists jumped to ... 32. Regardless of party or politics, there’s a sense a broken country can’t be fixed. Few have faith that even “wave” elections are game-changers anymore.

The larger explanations for this dysfunction are well-worn by now, from the impotence of the filibuster-bound United States Senate to the intractable polarization of an electorate divided more or less 50-50 since Bush v. Gore. Such is the bipartisanship of the funk that Jon Stewart and Glenn Beck each succeeded in bringing off well attended rallies in Washington to commiserate over the country’s political and governmental stagnation — with each rally offering its competing diagnosis.

For Stewart, the hyperpartisanship of the modern news media remains the nation’s curse. “The country’s 24-hour politico pundit panic conflict-onator did not cause our problems,” he told the throngs at his rally to “restore sanity,” but it “makes solving them that much harder.” At Beck’s rally to “restore honor,” the message seemed to be that America’s principal failing is a refusal to recognize that God “is our king.” If Stewart’s antidote was more civility, Beck’s was more prayer.

Stewart’s point is indisputable as far as it goes. Beck’s, not so much: If prayer hasn’t cured this highly prayerful nation by now, it may be because our body politic has long since developed an immunity to it. But both rallies, for all the commotion they generated, have already faded to the status of quirky historical footnotes. The reason is that neither addressed the elephant in the room — or the donkey. That would be big money — the big money that dominates our political system, regardless of who’s in power. Two years after the economic meltdown, most Americans now recognize that that money has inexorably institutionalized a caste system where everyone remains (at best) mired in economic stasis except the very wealthiest sliver.

The Great Depression ended the last comparable Gilded Age, of the 1920s, and brought about major reforms in American government and business. Not so the Great Recession. Last week, as the Fed’s new growth projections downsized hope for significant decline in the unemployment rate, the Commerce Department reported that corporate profits hit a record high. Those profits aren’t trickling down into new jobs or into higher salaries for those not in the executive suites. And the prospect of serious regulation of those at the top of the top — the financial sector — is even more of a fantasy in the new Congress than it was in its predecessor.

Wall Street is already celebrating the approach of bonus season by partying like it’s 2007. In The Times’s account of this return to conspicuous consumption, we learned of a Morgan Stanley trader, since fired for unspecified reasons, who went to costly ends to try to hire a dwarf for a Miami bachelor party prank that would require the dwarf to be handcuffed to the bachelor. If this were a metaphor — if only! — Wall Street would be the bachelor, and America the dwarf, involuntarily chained to its master’s hedonistic revels and fiscal recklessness with no prospect for escape.

As John Cassidy underscored in a definitive article titled “Who Needs Wall Street?” in The New Yorker last week, the financial sector has paid little for bringing the world to near-collapse or for receiving the taxpayers’ bailout that was denied to most small-enough-to-fail Americans. The sector still rakes in more than a fourth of American business profits, up from a seventh 25 years ago. And what is its contribution to America in exchange for this quarter-century of ever-more over-the-top rewards? “During a period in which American companies have created iPhones, Home Depot and Lipitor,” Cassidy writes, the industry reaping the highest profits and compensation is one that “doesn’t design, build or sell a tangible thing.”

It’s an industry that can buy politicians as easily as it does dwarfs, which is why government has tilted the playing field ever more in its direction for three decades. Now corporations of all kinds can buy more of Washington than before, thanks to the Supreme Court’s Citizens United decision and to the rise of outside “nonprofit groups” that can legally front for those who prefer to donate anonymously. The money laundering at the base of Tom DeLay’s conviction by a Texas jury last week — his circumventing of the state’s post-Gilded Age law forbidding corporate campaign contributions directly to candidates — is now easily and legally doable at the national level.

There are plenty of Americans who don’t endorse Stewart’s indictment of cable news; there’s even a reasonably large group that doesn’t buy Beck’s perceived shortfall in American religiosity. But seemingly everyone is aggrieved about the hijacking of the political system by anonymous special interests. The most recent Times-CBS News poll found that an extraordinary 92 percent of Americans want full disclosure of campaign contributors — far many more than, say, believe in evolution. But they will not get their wish anytime soon. “I don’t think we can put the genie back in the bottle,” said David Axelrod as the Democrats prepared to play catch-up to the G.O.P.’s 2010 mastery of outside groups and clandestine corporate corporations.

The story of recent corporate political donations — which we may never learn in its entirety — is just beginning to be told. Bloomberg News reported after Election Day that the United States Chamber of Commerce’s anti-Democratic war chest included a mind-boggling $86 million contribution from the insurance lobby to fight the health care bill. The Times has identified other big chamber donors as Prudential Financial, Goldman Sachs and Chevron. These are hardly the small businesses that the chamber’s G.O.P. allies claim to be championing.

Since the election, the Obama White House has sent signals that it will make nice to these interests. While the president returns to photo ops at factories, Timothy Geithner has already met with the chamber’s board out of camera range. In a reportorial coup before Election Day, the investigative news organization ProPublica wrote of the similarly behind-closed-doors activities of the New Democrat Coalition — “a group of 69 lawmakers whose close relationship with several hundred Washington lobbyists” makes them “one of the most successful political money machines” since DeLay’s K Street Project collapsed in 2007. During the Congressional battle over financial-services reform last May, coalition members repaired to a retreat on Maryland’s Eastern Shore to frolic with lobbyists dedicated to weakening the legislation.

Such is the ethos in his own party that Senator Jim Webb, Democrat of Virginia, complained this month that he “couldn’t even get a vote” for his proposal for a one-time windfall profits tax on Wall Street bonuses. Republicans “obviously weren’t going to vote for it,” he told Real Clear Politics, but Democrats also demurred, “saying that any vote like that was going to screw up fund-raising.”

Roughly two-thirds of the New Democrat Coalition’s House contingent won re-election on Nov. 2. Now they’ll have more Republican allies in both houses of Congress. Tea Party populists — already being betrayed by one Senate leader, Jon Kyl, on the supposed pledge against earmarks — may soon be as disillusioned as those Democrats who had hoped Barack Obama’s economic team wouldn’t look like Wall Street.

For all the McConnell-Boehner rhetorical pandering to Tea Partiers, the health care law will not be repealed by Congress — and certainly not any provisions that benefit the G.O.P. establishment’s friends in the health care industry. Over at FreedomWorks, Dick Armey’s Tea-Party-organizing group, there’s much belligerent talk of retribution against corporations seen as too friendly to Obama policies — most notably General Electric. It’s all hot air: G.E.’s political action committees gave a total of $1.6 million to politicians in both parties in 2010, and one of its former high-powered lobbyists, Dan Coats, is the newly elected Republican senator from Indiana and a probable member of the Senate Finance Committee.

America needs a rally — or, better still, a leader or two or three — to restore not just honor or sanity to its citizens but governance that’s not auctioned off to the highest bidder. When it was reported just days before our election that Iran was protecting its political interests in Afghanistan’s presidential palace by giving bags of money to Hamid Karzai’s closest aide, Americans could hardly bring themselves to be outraged. At least with Karzai’s government, unlike our own, we could know for certain whose cash was in the bag.

Saturday, November 27, 2010

Thank You Republicans…for nothing.

During this holiday season, Americans should be grateful for many things, but there is nothing to be thankful for from Conservatives, and especially Republicans. In their attempt to obstruct the Obama Administration and elevate corporations to the ruling class, Republicans are not helping to provide jobs, adequate wages, homes, medical care, or safety nets for older, unemployed or infirmed Americans.

Like the Obama Administration, Liberal groups, and Secular Humanists, Franklin Delano Roosevelt believed that Americans deserved security in their lives, and worked tirelessly to provide the very things that today’s Republicans obstruct and deny for citizens. Republicans fought tooth and nail to stop Social Security for older citizens and it is no different today. Republicans propose the hideous idea that health care, unemployment protection, a living wage, and economic protection are privileges and not an inherent right for being an American citizen.

Roosevelt believed otherwise so strongly, that he proposed a Second Bill of Rights in 1944, and as is happening today, Republicans obstructed and rejected his efforts for no other reason than to favor the corporate and industrial giants so they could continue reaping obscene profits at the expense of hard working Americans.

President Roosevelt’s 2nd Bill of Rights was a simple, five point proposition that every American should support and benefit from. However, like we see today, Republicans manipulated the narrative to block Roosevelt’s efforts at providing security for the working class, poor, and infirmed. As history often reminds us, some things never change, and Republicans never stopped punishing working Americans so the wealthy can prosper.

In the 2nd Bill of Rights, FDR proposed that every American has the right to:
  1. A job.
  2. An Adequate wage and decent living.
  3. A decent home.
  4. Medical care.
  5. Economic protection during sickness, accident, old age or unemployment.
These five items seem like a no-brainer, and as FDR proposed, seem perfectly acceptable in the richest nation in the world then, and now. Republicans in 1944 didn’t think Americans deserved these rights, and in 2010, Republicans still don’t believe every American deserves any of FDR’s proposed rights.

Republicans have blocked jobs bills because they were supported by President Obama, and in fact, also blocked legislation that would take tax incentives away from companies that outsourced Americans’ jobs. In both cases, Republicans sided with wealthy corporations and claim it is the right of business to deny jobs to Americans so business can reap higher profits and enjoy tax-free status.

In 2010, Republicans are considering abolishing the minimum wage, and are fighting to prohibit workers from joining unions that would enable American workers to earn a living wage. Again, their goal is protecting corporations so they can pay poverty level wages while they take in record profits.

Republicans also attempted to block financial reform that would hold banks accountable for the mortgage fraud and predatory lending practices that are causing millions of Americans to lose their homes. The Republicans and conservative groups like Koch Industries and the Heritage foundation poured millions of dollars into groups whose sole purpose was to block health care reform because they feel that medical care is a privilege and not a right. Now that health care reform is law, Republicans’ goal is to repeal the Affordable Health Care Act so every American cannot have adequate medical care.

Roosevelt did manage to enact Social Security so Americans will have economic protection during their old age, but Republicans want to abolish or privatize that system so Wall Street can have the funds to lose in the next market meltdown. Recently, Republicans blocked unemployment benefits for people who have lost their jobs to outsourcing, and claim unemployed workers are lazy, and by extension, asking for entitlements. Besides losing their jobs, they have lost their health care, homes, and a decent wage.

After World War II, Roosevelt’s 2nd Bill of Rights was included in the constitutions of Germany, Italy, and Japan after the Allies defeated them. Interestingly, those three countries are more financially stable, their citizens live longer, are better educated, more content, and more prosperous than Americans. The Allies knew that to create stable governments with productive citizens, they had to guarantee basic rights like those on Roosevelt’s list.

Americans should be thankful that they live in a semi-free country, but there is little else to be thankful for these days. Republicans have made a point of denying basic human rights to Americans in exchange for obscene corporate profits that translate into more obscene campaign contributions for Republicans. It is a vicious cycle that shows no sign of letting up, and now that the conservative Supreme Court has given more freedoms and rights to corporations, the cycle is a feedback loop that guarantees Americans are easier rape victims of big oil and corporate greed.

So Americans should say a collective Thank You to the Republican Party for rejecting Roosevelt’s 2nd Bill of Rights in 1944, and a bigger Thank You to the 2010 Republicans for continuing to deny basic rights like adequate health care, homes, wages, jobs, and economic security during old age. However, their Thank You should be sarcastic, and it should be expressed with contempt for Republicans’ gifts to the wealthy and corporations. One can be absolutely sure that German, Italian, and Japanese citizens are extremely grateful they have Roosevelt’s 2nd Bill of Rights; their happiness, well-being, and contentment prove they are indeed thankful. Americans should be so lucky; Thank You Republicans…for nothing.
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Written by Rmuse and published on PoliticusUsa on

Wednesday, November 24, 2010

Roll Back the Reagan Tax Cuts

You must pay the price if you wish to secure the blessings.
- Andrew Jackson

by: Thom Hartmann - Book Excerpt from "Rebooting the American Dream: 11 Ways to Rebuild Our Country."

When I was in Denmark in 2008 doing my radio show for a week from the Danish Radio studios and interviewing many of that nation’s leading politicians, economists, energy experts, and newspaper publishers, one of my guests made a comment that dropped the scales from my eyes.

We’d been discussing taxes on the air and the fact that Denmark has an average 52 percent income-tax rate. I asked him why people didn’t revolt at such high taxes, and he smiled and pointed out to me that the average Dane is very well paid, with a minimum wage that equals roughly $18 per hour. Moreover, what Danes get for their taxes (that we don’t) is a free college education and free health care, not to mention four weeks of paid vacation each year and notoriety as the happiest nation on earth, according to a major study done by the University of Leicester in the United Kingdom.

But it was once we were off the air that he made the comment that I found so enlightening.

“You Americans are such suckers,” he said. “You think that the rules for taxes that apply to rich people also apply to working people, but they don’t. When working peoples’ taxes go up, their pay goes up. When their taxes go down, their pay goes down. It may take a year or two or three to all even out, but it always works this way—look at any country in Europe. And that rule on taxes is the opposite of how it works for rich people!”

My Danish guest was right. So before we get into the larger consequences of tax increases or tax cuts for the nation’s economic health, let’s parse this business about what tax increases or cuts mean for the rich and for the not-so-rich.

Unequal Taxation and the Conservative Spin

If a wealthy person earns so much money that he doesn’t or can’t spend it all each year, when his taxes go down his income after taxes goes up. This is largely because there’s little or no relationship between what he “needs to live on” and what he’s “earning.” Somebody living on $1 million per year but earning $5 million after taxes can sock away $4 million in a Swiss bank. If his taxes go up enough to drop his after-tax income to only $3 million per year, he’s still living on $1 million per year and socks away only $2 million in the Swiss bank. Although his lifestyle doesn’t change, his discretionary income—some call it “disposable” income—goes down when his taxes go up and vice versa.

Most working Americans believe that their taxes and income work in the same way—something the right-wing think tanks and media want everyone to believe. So average Americans tend to support tax cuts because they think they’ll have more money in the bank as a result, but if their taxes go up, they’ll have less money in the bank. It’s pretty intuitive, and over the short term, it’s true.

But it never plays out that way. Our own experience—and the experience of the Danes and other Europeans—shows a completely different trend.

Unlike the rich, most working people spend pretty much all of what they earn—their discretionary income is extremely limited and in many cases zero. Savings rates in the United States among working people typically are small—1 to 5 percent. So the take-home pay that people have after taxes—regardless of what the tax rate may be—is pretty much what they live on.

As economist David Ricardo pointed out in 1817 in the “On Wages” chapter of his book On the Principles of Political Economy and Taxation, take-home pay is also generally what a person will work for. Employers know this: Ricardo’s “Iron Law of Wages” is rooted in the notion that there is a “market” for labor, driven in part by supply and demand.

So, if a worker is earning, for example, a gross salary of $75,000, his 2009 federal income tax would have been about $18,000, leaving him a take-home pay of $57,000. Both he and his employer know that he’ll do the job for that $57,000 take-home pay.

So let’s take a look at what happens if the government raises income taxes. For our average $75,000-per-year worker, his takehome pay might decrease from $57,000 to $52,000. So, in the short run, increased taxes have an immediate negative effect on him.

But here comes the part the conservatives don’t like to talk about. Our own history shows that within a short time—usually between one and three years—that same worker’s wages will increase enough to more than compensate for his lost income. Former Federal Reserve Chairman Alan Greenspan used to be hysterical about this effect—he called it “wage inflation”—and the Wall Street Journal and other publications would often reference it. It’s one reason why as income taxes increasingly hit more and more working people in the United States between the 1950s and 1981, income itself steadily went up, too.

Similarly, when the government enacts a tax cut, workingclass people’s taxes go down; but sure enough, over time, their wages also go down so their inflation-adjusted take-home pay remains the same.

Consider all the “tax cuts” working people have gotten over the past 30 years, from Reagan, Clinton, and Bush Jr. In each case, within a year or two working people’s wages were the same or lower. On the other hand, when working-class people’s taxes went up, during the Truman, Eisenhower, Johnson, and Nixon administrations, their wages went up in the following years, too.

We’ve seen both happen over the past 80 years, over and over again.

When it comes to the rich, though, it is the “top marginal tax rate” that matters most. That marginal tax rate applies to each bracket, and for 2009 taxes it was as follows:
Annual Income             Marginal Tax Rate

Less than $8,350                       10%
$8,350 to $33,950                     15%
$33,950 to $82,250                   25%
$82,250 to $171,550                 28%
$171,550 to $372,950               33%
$372,950 and higher                 35%
So what happens if that top marginal tax rate goes up from its current 35 percent to, for example, the 1980 rate of 70 percent?

For the more than 120 million American workers who don’t earn more than $372,950 annually, it won’t mean a thing. But for the tiny handful of millionaires and billionaires who have promoted the Great Tax Con, it will bite hard. And that’s why they spend millions to make average working people freak out about increases in the top tax rates.

Taxes as the Great Stabilizer

Beyond fairness, holding back the landed gentry that the Founders worried about—America had no billionaires in today’s money until after the Civil War, with John D. Rockefeller being our first—in and of itself is an important reason to increase the top marginal tax rate and to do so now.

Novelist Larry Beinhart was the first to bring this to my attention. He looked over the history of tax cuts and economic bubbles and found a clear relationship between the two. High top marginal tax rates—generally well above 60 percent—on rich people actually stabilize the economy, prevent economic bubbles from forming, prevent the subsequent economic crashes, and lead to steady and sustained economic growth as well as steady and sustained wage growth for working people.

On the other hand, when top marginal rates drop below 50 percent, the opposite happens.

As Beinhart noted, the massive Republican tax cuts of the 1920s (from 73 to 25 percent) led directly to the Roaring Twenties’ real estate and stock market bubbles, a temporary boom, and then the crash and Republican Great Depression that started in 1929.

Then, from the 1930s to the 1980s, rates on the very rich went back up into the 70 to 90 percent range. As a result, the economy grew steadily, and for the first time in the history of our nation we went 50 years without a crash or major bank failure. It was also during this period that the American worker’s wages increased enough to produce the strongest middle class this nation has ever seen.

Then came Reaganomics.

Taking his cues from the conservative billionaires who fund right-wing think tanks like the Heritage Foundation, Reagan cut top marginal tax rates on the rich from 74 percent to 38 percent. Predictably, there was an immediate surge in the markets—followed by the worst crash since the Great Depression and the failure of virtually the entire nation’s savings-and-loan banking system.

Then came Bush Sr., running on his “no new taxes” pledge, who cut taxes once in office; the nation fell into a severe recession while debt soared and wages for working people fell.

During the Bill Clinton era, things stabilized somewhat when he slightly raised taxes on the very rich, but he was followed by Bush Jr., who cut them again, including cutting taxes on unearned income—interest and dividends that people like W, who are born with a trust fund, “earn” as they sit around the pool waiting for the dividend check to arrive in the mail—down to a top rate of 15 percent. That’s right, trust fund babies like Bush (and hedge fund billionaires) pay a maximum 15 percent federal income tax on their dividend and capital gains income, thanks to the second Bush tax cut.

The result of this surge in easy money for the wealthy, combined with deregulation in the financial markets, was the “froth” Greenspan worried about that led us straight into the Second Republican Great Depression in 2008.

The math is pretty simple. When the über-rich are heavily taxed, economies prosper and wages for working people steadily rise. When taxes for the rich are cut, working people suffer and economies turn into casinos.

How They Did It

So why is it that Americans have come to believe that tax cuts are good for everyone? The answer is that for decades now the überrich have relentlessly spent money to make Americans believe that lower taxes are the answer to all of America’s problems. They’ve done this partly through the media they own and partly through funding “think tanks” that legitimize their Great Tax Con.

Richard Mellon Scaife, a Pittsburgh native and heir to the Mellon family businesses, is a conservative billionaire who carries the title of publisher of the Pittsburgh Tribune-Review, the second-fiddle newspaper to that city’s larger daily, the Pittsburgh Post-Gazette. Although daily newspapers generally have not been faring well lately, Scaife’s Tribune-Review is a ridiculously expensive enterprise, given its paltry circulation of 50,000.

According to a 2007 report in the Post-Gazette, based on Scaife’s divorce filings, his ex-wife contended that the Tribune-Review “should be considered a hobby or personal cause rather than a business investment because the paper has lost $20 million to $30 million annually since it began publishing in 1992.”

His ex-wife had it right—the newspaper is a “personal cause” for Scaife.

If you do the math, you come up with more than $300 million that Scaife has lost on the newspaper. The Internal Revenue Service (IRS) considers an activity a business (instead of a hobby) if there is “a reasonable expectation” of earning a profit and if it makes a profit in at least three of the past five years (although they’ve never gone after Scaife on this; as Leona Helmsley famously said, “Only the little people pay taxes”).

Scaife is not alone among billionaires flushing money down such news operations. As my friend and colleague Cenk Uygur of The Young Turks pointed out in a Daily Kos diary in July 2009, billionaire Rupert Murdoch loses $50 million per year on the New York Post, billionaire Philip Anschutz loses around $5 million per year on the Weekly Standard, and billionaire Sun Myung Moon has lost $2 to $3 billion on the Washington Times.

So why are these guys willing to lose so much money funding conservative media? Why do they bulk-buy every right-wing book that comes out to push it to the top of the bestseller list and then give away the copies to “subscribers” to their Web sites and publications? Why do they fund to the tune of hundreds of millions of dollars per year right-wing think tanks and training programs and lobbying organizations?

The answer is pretty straightforward: they do it because it buys them respectability and gets their con job out there. And one of their most important goals is lower taxes—for millionaires and billionaires like themselves.
Scaife, for instance, has used the various family foundations he oversees to fund conservative causes over the years to the tune of hundreds of millions of dollars, including more than $20 million to just the Heritage Foundation. All you have to do to see how influential Heritage has been is to read its own propaganda. When President Reagan took office in 1981, Heritage dropped a 1,100-page tome titled Mandate for Leadership on his desk, which he promptly handed out to his entire cabinet. Among its achievements over the years, Heritage lists this under 1981:
A tax cut revolution.
Heritage’s Mandate for Leadership called for “An across-theboard reduction in marginal personal income tax rates in each bracket of about 10 percent in 1981, with similar rate reductions in 1982 and 1983.” The Reagan administration not only followed Mandate’s lead, but it appointed Heritage’s Norman Ture, the Mandate author who penned the chapter on tax policy, as treasury secretary for tax and economic affairs—a new position suggested by Mandate. The tax cut that eventually passed—a marginal rate reduction of 25 percent over three years—wiped out America’s economic “malaise,” producing the biggest economic boom in U.S. history.
This conveniently ignores the fact that the tax cuts also resulted in the tripling of the federal deficit during the Reagan years, among other things. In January 2005, Heritage issued a much shorter, 156-page Mandate for Leadership and had this to say about it:
The original version, published in 1980, was written for a new administration just gaining widespread support for its ideas. Dubbed the “bible” of the Reagan White House by the Washington Post, it provided a step-by-step guide to how to transform conservative principles into government policy.
“Today, those principles are well established in Washington, well accepted by American voters and well understood everywhere in terms of how they translate into policy,” [President Edwin] Feulner said.
Heritage is but one example of the ways that the rich succeed in influencing public policy, especially tax policy. One hears a constant drumbeat emanating from Heritage and other conservative think tanks to keep taxes low. And the conservative media that these same funders—billionaires like Scaife, Murdoch, Anschutz—own and finance are echoing those messages.

Even though William Kristol’s publication, the Weekly Standard, is a money-losing joke (with only 85,000 subscribers), his association with the publication is enough to get him on TV talk shows whenever he wants and even a column with the New York Times for a year. Similarly, the money-losing Washington Times catapulted Tony Blankley to TV stardom. And of course, Murdoch’s Fox “News” blares the anti-income-tax message 24/7.

One way in which the think tanks and the conservative media con the American public is to conflate income taxes for the rich with income taxes for everyone else. And this is the crux of the con job. When Bill Clinton proposed tax increases in 1993, think tanks like Heritage and Cato immediately opposed them with their myths about the negative consequences of tax increases. Here’s what a Heritage “analyst” wrote then:
Proponents of raising taxes argue that the federal budget cannot be balanced without a tax hike. They argue, too, that tax increases will make the tax code fairer. Some even claim that tax increases will encourage economic growth by reducing the need for federal borrowing.
Raising taxes, however, would be a political and economic mistake, regardless of who pays and what taxes are increased. If history is any guide, higher taxes will fuel additional federal spending....
Higher taxes will shrink the tax base and reduce tax revenues.... In each case, proponents of the hike claimed that the deficit would decline. But in each case, the deficit rose the following year.
That “analysis” failed to point out that the federal budget has pretty much grown every year since the founding of the republic and that between the growth of both our population and our economy, and the effect of inflation, government expenditures go up every year regardless of tax policy.

Weeks later the Cato Institute, also funded heavily by wealthy right-wing supporters, echoed the opposition to the Clinton tax increases in a piece by Bruce Bartlett, titled “The Futility of Raising Tax Rates,” making a special effort to connect taxes for the rich with taxes for everyone else:
The Clinton plan, therefore, is based on false premises and is unlikely to achieve the goal of increasing the tax burden on the wealthy. It will probably lead, instead, to higher taxes on the poor and the middle class, as higher revenues from the rich fail to materialize. In the end, the burden of higher taxes must fall largely on the middle class because that is where the bulk of income is. Thus, maintaining a low top tax rate is the best way to ensure that tax rates remain reasonable for those with low and moderate incomes.
These anti-tax messages have been delivered by clever language crafted by right-wing message experts like Frank Luntz and others so that terms like tax relief and tax burden have become household words. In the end, low tax rates, as we saw earlier, only keep the superwealthy—Moon and Murdoch and Scaife and Anschutz (and others)—richer than you or I could ever even imagine being. For these rich right-wing funders, the cash spent on money-losing media enterprises really is a “personal cause”—an investment that pays back by saving them millions in taxes each year.

It’s time we roll back the Reagan tax cuts that slashed the top 74 percent rate on millionaires and billionaires down into the low 30s. Let’s increase the top marginal tax rate and eliminate stock options as a form of executive compensation. This will go a long way toward stabilizing our economy and improving wages for lowerand middle-income Americans.

Taxing the very rich (who use only a small percentage of their income to “buy” things, stashing most of it in Swiss bank accounts) also supports working people in getting decent wages. When income above $3 million per year (from all sources) is taxed at 74 percent, as it was from 1964 to 1983, or at 91 percent, as it was from 1931 to 1964, CEO pay tends to drop down to around 30 times the pay of a company’s most lowly paid employees (as it was in the United States from 1932 until the mid-1980s and as it is in virtually every other nation of the world with similarly high top marginal tax rates). Worker wages are healthy, and a landed gentry superwealth class doesn’t emerge to threaten democratic institutions and mess with politics in ways that purely advantage only themselves. In other words, roll back the Reagan tax cuts.

The Stock Option Problem

My radio show has a mission statement. We don’t say it on the air, as it sounds a bit pompous, but it’s the metric against which we measure our work: Saving the world, by awakening one person at a time. During the 1980s, when I was CEO of an advertising agency in Atlanta, our mission statement was to help people communicate, to make better and more open companies. Before that, in 1983, I started a travel company that hit the front page of the Wall Street Journal the next year and has conducted around a quarter billion dollars in business since then, and its mission statement was to help people better understand the world by traveling through it. And in 1978 my wife and I started a community for abused children in New Hampshire, with a clear mission statement: Saving the world, one child at a time.

For most of American history, businesses—for-profit and nonprofit—had mission statements that were broader than simply serving the interests of shareholders and CEOs and referred instead to the long-term interests of the company, its workers, and its customers.

Economics author Barry C. Lynn noted that “by the 1950s managers were wont to present themselves as ‘corporate stewards’ whose job was to serve ‘stockholders, employees, customers, and the public at large.” In other words, besides the stockholders, there are also the workers, the customers, and the general public, who are crucial to the long-term well-being of the corporation itself. CEOs actually rose through the ranks of the business and felt loyal to the companies they ran. They’d often started in the mailroom as a 20-year-old and fully expected to retire with a comfortable pension, the company in the good hands of one of their younger protégé vice presidents, who was working his or her way to that CEO status.
That corporate mentality and mission was generally true all the way until the 1980s. But in the early Reagan years, something changed dramatically, and it’s devastated the American corporate landscape.

First, President Reagan effectively stopped enforcing the Sherman Antitrust Act of 1890, a law that effectively prevented cartels and monopolies and large corporations from dominating the markets. The Reagan administration’s backing off from enforcement of the act led to an explosion of mergers and acquisitions, buy-outs, greenmail, forced mergers, and other aggregations of previously competitive or totally unrelated companies. The big got bigger, the midsized got acquired or crushed, and the space in which small entrepreneurs could start and flourish nearly vanished.

But what followed this was even worse. Starting back in the 1930s, a particularly toxic form of economic thinking—some would argue sociopathic economic thinking—began to take hold, some of it propelled by theories developed at the Chicago School of Economics by Milton Friedman (who would later serve as an economic adviser to Reagan). By the 1980s that economic thinking had undergone several mutations, and the one that has hit America the hardest is the notion that every business in the nation has a single mission statement: maximize shareholder value and dividends.

The theory behind this was that in a modern corporation the role of the CEO and the executive-level workers is to do whatever is best for the shareholders.

To provide the incentive to CEOs and senior executives to “think like a shareholder,” tax and accounting rules were both changed and used in the 1980s to actually turn CEOs into more shareholder than employee. This was done by moving huge chunks of their compensation from payroll (cash) into stocks and stock options (the right to buy stock in the future at current prices and then quickly sell it for a profit). Although a CEO like Stephen J. Hemsley of UnitedHealth Group made an annual salary of $13.2 million in 2007, and $3.2 million in 2009 (a year when CEO pay in the health-care industry was under a lot of scrutiny), he was awarded more than $744 million worth of stock options during the few years he was CEO. His predecessor, William “Dollar Bill” McGuire, was paid more than $1.7 billion in stock options for his previous decade of work as CEO.

Such compensation packages are now relatively common across corporate America, having created a new CEO aristocracy as well as a totally different business climate from the way America was before Reagan.
Besides the fact that such stock option deals are extremely lucrative for these executives without making their salaries seem sky high, they have another somewhat insidious effect. Because CEOs are now first and foremost stockholders, every decision is grounded in and colored by the question Will it immediately increase the price of my stock and the amount of the dividend income it pays?

Left in the dust are questions like What is best for this company’s long-term survival? and What is best for the communities in which we do business? Stock values are best increased by ruthlessly slashing costs (cutting employees, outsourcing to cheap-labor countries, and cutting corners in production) and increasing revenues (buying up competitors to create monopoly markets so price competition is minimized).
What’s more, the money these CEOs and executives make from the sale of the stocks they own or from the dividends those stocks pay is subject to an income tax of only 15 percent (as opposed to the 35 percent top marginal tax rate), the result of the Bush tax cuts. No wonder the rich are getting richer, the jobs are going abroad, and average workers are just plain old out of luck.

Shrink the Government by Raising Taxes

From 1985 until 2008, William A. Niskanen was the chairman of the Cato Institute, a libertarian think tank, and before 1985 he was chairman of Reagan’s Council of Economic Advisers and a key architect of Reaganomics. He figured out something that would explode Reagan’s head if he were still around. Looking at the 24-year period from 1981 to 2005, when the great experiment of cutting taxes (Reagan) then raising them (Bush Sr. and Clinton) then cutting them again (Bush Jr.) played out, Niskanen saw a clear trend: when taxes go up, government shrinks, and when taxes go down, government gets bigger.

Consider this: You have a clothing store and you offer a “50 percent off” sale on everything in the store. What happens? Sales go up. Do it for a few years and you’ll even need to hire more workers and move into a larger store because sales will continue to rise if you’re selling below cost. “But won’t the store go broke?” you may ask. Not if it’s able to borrow unlimited amounts of money and never—or at least not for 20 years or more—pay it back.

That’s what happens when we have unfunded tax cuts. Taxpayers get government services—from parks and schools to corporate welfare and crop subsidy payments—at a lower cost than they did before the tax cuts. And, like with anything else, lower cost translates into more demand.

This is why when Reagan cut taxes massively in the 1980s, he almost doubled the size of government: there was more demand for that “cheap government” because nobody was paying for it. And, of course, he ran up a massive debt in the process, but that was invisible because the Republican strategy, called “two Santa Clauses,” is to run up government debt when in office and spend the money to make the economy seem good, and then to scream about the debt and the deficit when Democrats come into office. So while Reagan and W were exploding our debt, there wasn’t a peep from the right or in the media; as soon as a Democrat was elected (Clinton and Obama), both the right-wingers and the corporate media became hysterical about the debt.


And when Clinton raised taxes so that people actually started paying the true cost of government (a balanced budget as in the years 1999 and 2000), they concluded that they didn’t need as many services, so government actually shrank—in terms of both cost and the number of federal employees.

Then Bush Jr. comes into office and goes back to Reaganomics and again cuts taxes and puts the cost on the national credit card, and, bingo, he presides over the largest increase in the size and the cost of government in the history of our republic.

The Reaganomics theory was that people would use less government when they saw the huge deficits that use of government during times of low taxes was racking up, but that’s not what happened. Instead, people and businesses ignored the deficit and went shopping for discounted government.

Running the numbers through a fine-toothed comb, Cato’s Niskanen was even able to determine the exact tipping point for taxes and demand for government services: 19 percent of GDP. Whenever taxes were above that point (FDR to Carter and during the Clinton years), government grew more slowly than the rest of the economy or even shrank. Whenever taxes were below 19 percent of GDP, government grew in size and spending (usually military but others as well) like a fat man at a pie-eating contest.

“I would like to be proven wrong,” Niskanen told Atlantic Monthly writer Jonathan Rauch. And Rauch noted, “The way to limit the growth of government is to force politicians, and therefore voters, to pay for all the government they use—not to give them a discount.” And that means raising taxes to a point above 19 percent of GDP. “Voters will not shrink Big Government until they feel the pinch of its true cost,” Rauch wrote.

Of course this is very bad news for people who want to put Reagan’s picture on the $50 bill and reshape Roosevelt’s face into Reagan’s on Mount Rushmore, which is probably why the former chairman of Cato’s report on the issue is buried in an obscure part of its Web site and the only significant coverage his discovery ever got was Rauch’s article.

But it comports with both common sense and a generation of tax tables. Reagan and Bush Jr. cut taxes, leading to a bloated government and huge debts. Clinton increased taxes, which cut demand for (and thus the size of) government and let him begin to pay down the debt. If “conservatives” really want “small government,” they should be talking about putting the guy they call Slick Willy’s picture on the 50 instead of Ronnie’s.

Reverse and Roll Back

If we want to have long-term economic stability and if we want to have fairness in our tax policy, it is quite clear what we have to do. We have to first undo the damage done by the right-wing think tanks and media, funded by the Scaifes, the Murdochs, the Anschutzes, and the Moons, and get Americans to see taxes not as a burden but as both the admission price to civil society and investments in our nation’s future.

For too long the über-rich have spent hundreds of millions to make sure phrases like tax burden and tax relief have become embedded in the national consciousness, so today people have come to think of taxes as inherently bad. Based on that assumption, the über-rich have also convinced working people that they should throw out of office any politicians who are willing to raise taxes on the rich. (Because there were no right-wing think tanks at the time, Americans applauded rather than screamed about Woodrow Wilson’s and Herbert Hoover’s raising taxes on rich people above 80 percent.)

So we have to help Americans realize that “no new taxes” is a mantra that is meaningful to the very rich but largely hurts average working people.

Only when the current generation relearns the economic and tax lessons well known by the generation (now dying off) that came of age in the 1930s through the 1960s will this become politically possible. Americans need to learn what Europeans know about income taxes—that they really matter only to the rich.

We need to remind people that it was not that long ago when we had the rich paying top marginal tax rates of 70 percent (at the start of the Reagan years); and if we want to go further back, we used to have top marginal tax rates above 90 percent in the Eisenhower years. Our current tax rates and the antitax fever are the result of relentless right-wing propaganda that began during the so-called Reagan revolution and has continued ever since.

If we really want our country to recover its financial footing, we must roll back the Reagan tax cuts that took the top marginal rate from above 70 percent down into the 30 percent range. To stop the “casino economy” that always emerges when the very highest-income people are allowed to keep whatever they can get, regardless of how they got it (so long as it’s legal), there has to be a collective notion of “how rich is too rich for society to afford” and income above that rate is taxed at the old 70 to 90 percent rate.

In addition to rolling back the Reagan tax cuts so that millionaires and billionaires have little incentive to plunder their companies and slash (or export) their workforces, we must also ban the use of stock options as a form of compensation for top corporate executives. This will shift the focus of CEOs and senior managers from stock price and dividends (a focus that has destroyed numerous companies, from Enron to Lehman Brothers to BP) to the long-term health of the company itself.

If we want to keep the stock options as compensation, we must at the least tax those stock options at the same top marginal tax rates as the salaries of the rich by considering capital gains as ordinary income.
We have a lot of educating to do. And so long as the rightwing machine of the über-rich continues to “lose” (i.e., “invest”) millions of dollars a year in their ongoing disinformation campaign, it’s going to require all of us reciting the mantra: “Roll back the Reagan tax cuts!” 

Thom Hartmann is a New York Times bestselling Project Censored Award winning author and host of a nationally syndicated progressive radio talk show. You can learn more about Thom Hartmann at his website and find out what stations broadcast his program. He is also now has a daily television program at RT Network. You can also listen to Thom over the Internet.

Tuesday, November 16, 2010

When Voters Find Out They've Been Conned

Robert Creamer.Political organizer, strategist and author

The Corporate CEO's and big Wall Street Bankers must have been having a good old time celebrating their victories in the mid-term elections.

You can see them now. High-fiving through the cigar smoke in their wood paneled Upper East Side exclusive clubs. Laughing at how easy it was to put one over on so many everyday working people. They are thrilled that they successfully convinced many Americans to vote against their own economic self-interests by playing on their legitimate anger that their economic well-being is under attack.

Of course, the cruel irony is that the people who funded the vicious TV ads and flights of mail urging everyday Americans to throw out the Democrats in order to demonstrate their fury at the economy, are the very people who have made a killing themselves by attacking the middle class.

They are the very same people who have outsourced middle class jobs, siphoned off ever-larger portions of the fruits of middle class labor, and made fortunes speculating with the middle class' money. And, unbelievably, they are the very same people whose reckless speculation collapsed the economy and cost eight million Americans their jobs.

That's right, the same people who paid for those ads playing on middle class economic insecurity are the people who made the middle class insecure in the first place.

Those guys who are celebrating how they pulled one over on everyday Americans are like arsonists who set a building on fire and then crow about their heroism organizing the bucket brigade.

As part of their fall campaign, they sent Republicans scurrying around the country in a frenzy about the budget deficit. But what is the very first thing they do after the election? They demand that the country borrow $700 billion more dollars to give millionaires more tax breaks. You've got to admire the sheer chutzpa.

And there is more. The Republicans have every intention of refusing to support middle class tax cuts -- of holding middle class tax cuts hostage -- until millionaires get theirs too.

They spent massive amounts of air time promoting cuts in spending. What's the first thing they want to cut? Unemployment insurance for millions of unemployed workers who can't find jobs.

That's right. New tax breaks for millionaires, and cuts in unemployment insurance for middle class workers whose jobs they destroyed. That doesn't exactly square with Tea Party talk about how actions should have consequences.

And that contradiction is precisely the Republican's big problem. It's one thing to vote against incumbents because you're furious about your economic situation. It's another to watch the guys who you elected to replace them vote time and time again to promote the interests of millionaires and billionaires -- and to make things worse for you.

It will not be long until millions of Americans begin to realize that the tonic they bought from the sharpies on Wall Street and corporate CEO's was snake oil.

A lot of voters cast their ballots out of anger this fall. But the Republicans don't have any clue how angry people will get when they realize they have been sold a bill of goods.

The great con artists are people who first win the confidence of their mark -- hence the name "con" men. Con men convince you to trust them - and then betray your confidence and steal your money. When the mark discovers the con, he is likely to be really angry. He is angry not simply because he has lost his money. He's angry because the con man played him for a chump.

Many voters in this fall's elections thought that when they cast their ballot for the Republican candidate, they were supporting the dashing young hero who was going to save the middle class heroine from the oncoming train just in the nick of time.

As soon as they start making policy in the new Congress it won't take long for people to realize that the "dashing young hero" outfit was a disguise. In fact, it will be the greedy villain who is revealed as he gallops up as the train approaches. And instead of untying the knots that prevent our heroine's escape, he will demand a ransom that must come directly out of her middle class pocket. Not exactly the outcome those middle class voters were expecting, and oh will it make people angry.

Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.

Wednesday, November 10, 2010

How Republicans and Their Big Business Allies Duped Tens of Millions of Evangelicals into Voting for a Corporate Agenda


Tens of millions of American voters got duped badly in the 2010 election. The bible-thumping white underclass thought they hit back at what they regarded as the nefarious forces trying to “take our country away.”

They were bought, paid for, sold, traded and manipulated by the most powerful in the US election: a Billionaire Lynch Mob led by Rupert Murdoch, Karl Rove, the Koch brothers, and hundreds of millions in organize corporate cash. They peddled a fear agenda: fear of immigrants, fear of government control of our lives, fear that their country would become irrevocably changed.

Here's how it happened:

Where the fear and loathing began

A bedrock article of faith among many of the anti-Obama white voters is that America had “Christian origins,” and that today America must be “restored” to “our religious heritage.” The “Puritan heritage” of America is constantly cited as evidence for our need to return to our “biblical roots.” The Constitution is also waved around as if it too is some sort of Bible to be religiously believed in. Of course the Billionaire Lynch Mob doesn’t care about such quaint ideas as individual liberties, let alone “biblical absolutes,” but many of the people who believed the anti-Obama lies did care.

The earnest, mostly Evangelical dupes have a point: by calling for a “return to our roots” (be they biblical and/or constitutional) they are actually maintaining a grand old American tradition: religious delusion as the basis for conquest. The Puritans believed that they were importing “authentic Christianity” to America, especially as written in the Old Testament. They said that they were on a divine mission, even calling themselves “The New Israel” and a “city set upon a hill.” John Winthrop (governor of Massachusetts Bay) transferred the idea of “nationhood” in biblical Israel to the Massachusetts Bay Company. And the Puritans claimed they were God’s “Chosen People.” They said that they had the right to grab land from the “heathen.” These were the American Indians whom the Puritans thought of as the “new Canaanites,” to be slaughtered with God’s blessing and in the case of the Pequot Indians burned alive.

There are many threads in the anti-Obama tapestry but three are ignored at our peril: 1) The End Times fantasies of the Evangelicals; 2) The rise of so-called Reconstructionist theology and 3) the culture war launched over the legalization of abortion.

These “threads,” not the economy alone, are also the source of the vote where white lower class and white middle class Americans voted in droves against their own self-interest.  Let’s unpick these fraying threads one at a time.  

1. “End Times” Fantasies

The evangelical/fundamentalists/Republican far right is in the grip of an apocalyptic “Rapture” cult centered on revenge and vindication. This “End Times” death wish is built on a literalist interpretation of the Book of Revelation. This fantasy has many followers. For instance to take one of many examples, Jerry Jenkins and Tim LaHaye’s “Left Behind” series of sixteen novels represents both a “reason” and a symptom of the hysteria that grips so many voters.

The “Left Behind” novels have sold tens of millions of copies while spawning an “End Times” cult, or rather egging it on. Such products as Left Behind video games have become part of the ubiquitous American background noise. Less innocuous symptoms of End Times paranoia include people stocking up on assault rifles and ammunition, freeze dried food (pitched to them, by the way, by Billionaire Lynch Mob-handmaid Glenn Beck), gold (also sold to them by Glenn Beck), adopting "Christ-centered" home school curricula, fear of higher education (“we’ll lose our children to secularism”), embracing rumor as fact (“Obama isn’t an American”) and fighting against Middle East peace iniatives, lest they delay the “return of Jesus,” for instance through Houston mega church pastor John Hagee’s Christian Zionist-centered “ministry.”

John Hagee, mega church pastor and founder of Christians United for Israel said: “For 25 almost 26 years now, I have been pounding the Evangelical community over television. The Bible is a very pro-Israel book. If a Christian admits ‘I believe the Bible,’ I can make him a pro-Israel supporter or they will have to denounce their faith. So I have Christians over a barrel you might say.” The assumption Hagee makes -- that “Bible-believing Christians” will be pro-Israel -- is the dominant view among American Evangelical Christians. These are the people who goad us to make perpetual war worldwide. And these are the people who supposedly follow a teacher who said, “Blessed are the peacemakers.”

Few within the Evangelical community have dared to publically question such Haggee’s approach. The Christian Zionists led by Hagee et al even went after their very own George W Bush for backing peace talks between Palestinians and the Israeli government. So can you imagine the hatred the Christian Zionists have for President Obama, who also wants peace in the Middle East?

The momentum for building a subculture that’s seceding from mainstream society (in order to await "The End Times" has irrevocably pried loose a chunk of the American population from both sanity and from their fellow citizens. The Christian Zionist franchise holds out hope for the self-disenfranchised that -- at last -- everyone will know "We born-again Christians" were right and "They" were wrong. But here’s the political significance of the Christian Zionist dominance: the evangelical/fundamentalists’ imagined victimhood.

I say imagined victimhood, because the born-agains are hardly outsiders let alone victims. They’re very own George W Bush was in the White House for eight long, ruinous years and Evangelicals also dominated American politics for the better part of thirty years before that by enforcing a series of “moral” litmus tests that transformed the Republican Party into their very own culture wars lickspittle.

Nevertheless, the white evangelical/conservative Roman Catholic sense of being a victimized minority only grew with their successes. “You are not alone!” said Glenn Beck, playing to these “disenfranchised” “victims,” who – as the midterm results once again proved -- turn out to look more like a majority of white voters who had the power to turn Sarah Palin into a multimillionaire overnight and send the likes of Rand Paul to the Senate.

2. The Rise of Reconstructionist Theology

Where did the “victims” on the Far Right get their “theology” of perpetual damn-the-facts victimhood from? The history of theology (Christian or otherwise) is the history of people desperately trying to fit the way things actually are into the way their “holy” books say they should be. And since the facts don’t fit and never will, religious believers can either change their minds, embrace paradox, or find someone else to blame for their never-ending loss of face and self-esteem.

Most Americans have never heard of the Reconstructionists. But they have felt their impact through the Reconstructionists’ (often indirect) influence over the wider Evangelical community. In turn, the Evangelicals shaped the politics of a secular culture that barely understood the Religious Right let alone the forces within that movement that gave it its rage.

If you feel victimized by modernity (let alone humiliated by reality) then the Reconstructionists have The Answer to your angst: apply the full scope of the Biblical Law to modern America and to the larger world! Coerce “non-believers” to live in your imaginary universe! In other words Reconstructionists wanted to replace the U.S. Constitution and Bill of Rights with their interpretation of the Bible.

Most Evangelicals are positively moderate by comparison to the Reconstructionist “thinkers.” Most libertarians, who formed the backbone of the Tea Party (at least until the Far Right Evangelicals began to take the Tea Party over) would hate them. But the Reconstructionist movement is a distilled version of the more mainstream evangelical version of exclusionary theology that nonetheless divides America into the “Real America” (as the Far Right claim only they are) and the rest of us “sinners.”

The Reconstructionist worldview is ultra Calvinist, but like all Calvinism has its origins in ancient Israel/Palestine, when vengeful and ignorant tribal lore was written down by frightened men (the nastier authors of the Bible) trying to defend their prerogatives to bully women, murder rival tribes and steal land. These justifications probably reflect later thinking: origin myths used as propaganda to justify political and military actions after the fact—i.e., to justify their brutality the Hebrews said that God made them inflict on others and/or that they were “chosen.”

In its modern American incarnation, which hardened into a twentieth century movement in the 1960s and became widespread in the 1970s, Reconstructionism was propagated by people I knew personally and worked with closely when I too was a Religious Right activist claiming God’s special favor. The leaders of the Reconstructionist movement included the late Rousas Rushdoony (Calvinist theologian, father of modern-era Christian Reconstructionism, patron saint to gold-hoarding Federal Reserve-haters, and creator of the modern Evangelical home-school movement),  his son-in-law Gary North (an economist, gold-buff, publisher and leading conspiracy theorist), and David Chilton (ultra-Calvinist pastor and author.)

Reconstructionism, also called Theonomism, seeks to reconstruct “our fallen society.”  Its worldview is best represented by the publications of the Chalcedon Foundation, which has been classified as an anti-gay hate group by the Southern Poverty Law Center. According to the Chalcedon Foundation website, the mission of the movement is to apply “the whole Word of God” to all aspects of human life: “It is not only our duty as individuals, families and churches to be Christian, but it is also the duty of the state, the school, the arts and sciences, law, economics, and every other sphere to be under Christ the King. Nothing is exempt from His dominion. We must live by His Word, not our own.

It’s no coincidence that the rise of the Islamic Brotherhoods in Egypt and Syria and the rise of Reconstructionism took place in more or less the same twentieth-century time frame—as modernism, science and “permissiveness” collided with a frightened conservatism rooted in religion. The writings of people such as Muslim Brotherhood founder Hassan al-Banna and those of Rushdoony are virtually interchangeable when it comes to their goals of “restoring God” to his “rightful place” as he presides over law and morals. Or as the late Reconstructionist/Calvinist theologian David Chilton, writing in PARADISE RESTORED--A Biblical Theology of Dominion (and sounding startlingly al-Banna-like) explained:
Our goal is a Christian world, made up of explicitly Christian nations. How could a Christian desire anything else? Our Lord Himself taught us to pray: “Thy Kingdom come; Thy will be done on earth, as it is in heaven” (Matt. 6: 10)… The Lord’s Prayer is a prayer for the worldwide dominion of God’s Kingdom… a world of decentralized theocratic republics.... That is the only choice: pagan law or Christian law. God specifically forbids “pluralism.” God is not the least bit interested in sharing world dominion with Satan.

The message of Rushdoony’s work is best summed up in one of his innumerable Chalcedon Foundation position papers, “The Increase of His Government and Peace.” He writes: “[T]he ultimate and absolute government of all things shall belong to Christ.” In his book Thy Kingdom Come -- using words that are similar to those the leaders of al Qaida would use decades later in reference to “true Islam” -- Rushdoony argues that democracy and Christianity are incompatible: “Democracy is the great love of the failures and cowards of life,” he writes.  “One [biblical] faith, one law and one standard of justice did not mean democracy. The heresy of democracy has since then worked havoc in church and state… Christianity and democracy are inevitably enemies.”

3. The Culture Wars Launched over the Abortion Debate

The significance and rise of the Reconstructionists and their (often indirect) impact on the wider evangelical subculture can only be understood in the context of the January 22, 1973 Supreme Court ruling on Roe v. Wade.

Roe energized the culture war like nothing else before or since. This war has even fed the passion that burned within the so-called Tea Party movement’s reaction to Obama’s moderate legislative health care reform predicting “Death Panels.” Roe also indirectly energized even those members of the Far Right – for instance the Tea Party’s pro-choice libertarians -- who didn’t care about abortion per se. Roe had such far-reaching effects because reactions to Roe defined the scorched-earth, winner-take-all and rabidly anti-government tone of the culture war fights since 1973.

Fast forward thirty years to the first decade of the twenty-first century: The messengers and day-to-day “issues” changed but the volume of the anti-government “debate” and anger originated with the anti-abortion movement. “Death Panels!”, “Government Takeover!”, “Obama is Hitler!” and all such “comments” were simply updated versions of “pro-life” rhetoric.  And ironically, at the very same time as the Evangelicals who began the anti-abortion crusade (along with conservative Roman Catholics) had thrust themselves into bare knuckle politics over Roe, they also (I should say we also) retreated to what amounted to virtual walled compounds.

Evangelicals created a parallel “Christian America,” our very own private world, as it were, posted with “No Trespassing” signs. Our new “world” was about creating a Puritan/Reconstructionist-style holy-nation-within-our-fallen-nation.

This went far beyond mere alternative schools and home schools. Thousands of new Christian bookstores opened, countless Evangelical radio programs flourished in the 1970s and 80s, and new TV stations went on the air. Even a “Christian Yellow Pages” (a guide to Evangelical tradesmen) was published advertising “Christ-centered plumbers,” accountants and the like who “honor Jesus.” New Evangelical universities and even new law schools appeared, seemingly overnight with a clearly defined mission to “take back” each and every profession – including law and politics – “for Christ.” For instance, Liberty University’s Law School was the creation of the late Jerry Falwell, who told me in 1983 of his vision for Liberty’s programs: “Frank, we’re going train a new generation of judges and world leaders in the law from a Christian worldview to change America.” This was the same Jerry Falwell who wrote in America Can Be Saved: “I hope I live to see the day when, as in the early days of our country, we won’t have any public schools.”

To the old-fashioned Goldwater-type conservative mantra of “big government doesn’t work,” in the 1970s the newly-radicalized Evangelicals added “the US Government is Evil!” Our swap of spiritual faith for the illusion of political power – I say “illusion” since even in the 70s and 80s the real power was in the hands of the Billionaire Lynch Mob -- meant that we would tell people how to vote, but that we didn’t want our kids going to school with theirs. We’d wind up defending not just private schools and home schooling to “protect” our children from the world, but also private oil companies and private gas-guzzling polluting cars, private insurance conglomerates and so forth.

The price for the Religious Right’s wholesale idolatry of private everything was that Christ’s reputation was tied to a cynical political party owned by billionaires from the fast-food industry, raping the earth (not to mention our health), to the oil companies destroying our climate. It only remained for a Far Right Republican-appointed majority on the Supreme Court to rule in 2010 (Citizens United V. The Federal Election Commission), that unlimited corporate money could pour into political campaigns – anonymously -- in a way that clearly favored corporate America and the super wealthy who long since were the only entities served by the Republican Party’s defense of the individual against the government. The “individuals” turned out to be Exxon, the Koch brothers, Rupert Murdoch, McDonald’s and Goldman Sachs et al.

Conclusion

It’s a question of legitimacy and illegitimacy. What the Religious Right, including the Religious Right’s Roman Catholic and Protestant “intellectuals” (like my father) did, was contribute to a climate where the very legitimacy of our government, even any government, is up for grabs. Then the internet came along and Fox News came along and Rush Limbaugh, Michele Bachmann et all came along and no fiction was too fantastical to be believed as fact. We passed into a high tech stone age, myth superstition and outright lies gained a new currency.

Following the election of our first black President, the “politics” of the Evangelical, Roman Catholic and Mormon Far Right was not the politics of a loyal opposition, but the instigation of race-tinged revolution first and best expressed by Rush Limbaugh when he said, “I hope Obama fails.” All that happened in the midterm election of 2010 was that the corporate interests (unleashed by the Supreme Court), the Republican Party leadership and the Tea Party built on and/or cashed in on, the “biblically-based” antigovernment passion.

This was the politics that won in the Republican gains in the 2010 midterm elections. This was the logical conclusion of the process of delegitimizing the Federal Government that was launched by the Reconstructionists, the anti-abortion movement and of course is fed by the “Left Behind”/Christian Zionist apocalyptic revenge fantasy.

The Billionaire Lynch Mob’s only sacrament is fear. Their reward for cashing in on white religiously-believing middle class American’s addiction to Bronze Age biblical mythology is to walk away with our country. And fear-filled white Americans don’t get anything in return, unless you count their fleeting visceral pleasure of putting “that uppity black man” in the White House in his place.

Frank Schaeffer is a writer and author of many books including Crazy for God: How I Grew Up as One of the Elect, Helped Found the Religious Right, and Lived to Take All (or Almost All) of It Back
A disclosure: My late father, Francis Schaeffer, was a key founder and leader of the American Religious Right. For a time in the 1970s and early 80s I joined him in pioneering the Evangelical anti-abortion Religious Right movement. I changed my mind. I explain why I quit the movement in my book CRAZY FOR GOD -- How I Grew Up As One Of The Elect, Helped Found The Religious Right, And Lived To Take All - Or Almost All - Of It Back.

Monday, November 8, 2010

The u.s. middle class is being wiped out. Here's the stats to prove it

Michael Snyder is editor of theeconomiccollapseblog.com

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Here are the statistics to prove it:

83 percent of all U.S. stocks are in the hands of 1 percent of the people.


• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.


• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.


• 36 percent of Americans say that they don't contribute anything to retirement savings.


• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.


• 24 percent of American workers say that they have postponed their planned retirement age in the past year.


• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.


• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.


• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.


• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.


• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.


• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.


• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.


• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.


• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.


• In America today, the average time needed to find a job has risen to a record 35.2 weeks.


• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.


• For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.


• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.


• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.


• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.


• The top 10 percent of Americans now earn around 50 percent of our national income.

Giant Sucking Sound

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.

The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.