Myths of Deficits and Inequality

Cut taxes on the wealthy, the "job creators," so they can create more jobs, Republican "conservatives" insist.

Here is a direct refutation: the wealthy are hoarding their cash--the top 1% save 37% of their earnings. Rather than creating jobs, by their out-sized savings rate they destroy jobs.

We should cut corporate taxes argues the Chamber of Commerce incessantly, because (by one measure) US taxes are higher than economic competitors like Japan and Germany.

Corporations are also hoarding cash, again cutting jobs: money not spent on consumption or real (as opposed to financial) investments, is jobs not created and wealth not multiplied.

Higher taxes on the wealthy and corporations would capture some of this excess cash to build infrastructure, improve education and hire people in needed jobs.

The US is the fourth most unequal nation among wealthy OECD nations, having a Gini index of .36 compared to the most unequal nation's Gini of .50 (Mexico). 0 would be complete equality, 1.00 represents complete inequality, where only one person received all the income. According to the Nobel economist Joseph Stiglitz, and even the Economist, inequality is inefficient. Increased inequality drains consumption and investment spending: low consumption drives low investment, drives low job growth.

Repeal Obamacare. The Republican House of Representatives has voted to repeal it 33 or 34 times. Proponents of repeal claim that the program will increase deficits and cut jobs. It's likely that the reverse is true in both instances. While Obamacare will increase some taxes, mostly marginal, it will also save an astonishing amount of money not yet easily calculated. Health care costs, and costs to the government may actually go down, through lower hospital and emergency room costs, and a reduction in treatments needed as people get regular medical care, instead of only going to the doctor (or the emergency room) when a health crisis strikes.

The Congressional Budget Office (not a partisan institution) estimated cost savings from Obamacare that would reduce out-going deficits substantially. In fact, its most prominent recent caveat (reduction of the reduction) was the administration agreeing to a year's delay in the employer mandate (to provide insurance or pay a fee per employee), which CBO estimated to cost the government $10 billion.

So, what's going on here? The Mainstream Media emphasize the Republican message, even though it's the opposite of the truth and makes no economic sense. Higher taxes on the wealthy do not curb growth; they probably stimulate it, up to a point. Obamacare, while far from perfect, does not increase future deficits; it will reduce them.

Why are "conservatives" and Republicans against higher taxes for high incomes? They have high incomes, or are paid by people who do. Ditto the MSM.

Inequality is rising worldwide, in the US faster than most, and the "winners" want to keep it all. They are like Fifth Century Roman Senators, who chose the Fall of the Western Roman Empire, instead of imposing taxes on themselves.

Inauguration-Coronation Vision

The Inauguration displayed history and unity: over 200 years worth, represented by 50 states, with an impressive backdrop for Obama's oath, his speech and the tradition he evoked.

Obama didn't present the soaring emotion of his first inaugural. I don't think it was one of his better speeches, except in the implied substance. After all, inaugural speeches are supposed to lay out a President's broad vision, not his legislative agenda. He said: "our country cannot succeed when a shrinking few do very well and a growing many barely make it," but he didn't lay out a tax and spending blueprint for righting this wrong--he couldn't have, unless he spoke for hours. Instead, he said, "But while the means will change, our purpose endures: a nation that rewards the effort and determination of every single American."

The general thrust of this part of his speech was an implicit rejection of the conservative creed of everyone for himself. Americans, he insisted, over and over, have to pull together.

Obama rejected the partisanship of the past four years, but instead of bipartisanship, he implied that it was the responsibility of Republicans, as well as Democrats, conservatives as well as liberals, to make government work for the good of all, rather than blocking its functions, like the previous Republican House and the Senate Republican minority.

He also addressed climate change, and how we had to confront its reality; he plugged for new, alternative forms of energy, urging that America lead rather than follow.

Obama became most emotional over his peroration for civil rights, evoking the dream of "a King," and then championing equal rights for women, and gays.

Instead of specifically naming gun control, he said our "journey is not complete until all our children, from the streets of Detroit to the hills of Appalachia to the quiet lanes of Newtown, know that they are cared for, and cherished, and always safe from harm."

Obama was following tradition. Inaugurals aren't the place for laying out an agenda, except in the broadest terms, But his vision: of peace, equal opportunity, caring and openness has potential--if he can translate this into concrete action and get it through Congress.

As the NY Times pointed out, it was a liberal vision.

Obama didn't talk about two important issues: the failed and destructive drug war that's been implicitly rejected outright by two states, and more indirectly by a handful more.

Nor did he mention his drone war, which appears to be expanding, not receding, as implied by his statement, "a decade of war is now ending." It's as if it was unmentionable: the American Empire advancing by covert means--hand in hand with his pledge to "support democracy" and peace, world-wide.

Does Obama's vision offer a chance that the US won't suffer the fate of the Roman Empire in 476? Perhaps: but only if Congress can return to its role as a functioning institution.

Stories Win Nations

"Job creators" are being unfairly attacked, their money stolen from them: there are only two kinds of people in the world, producers and users, or parasites.

Parasites control governments everywhere and legally steal from producers, through taxes: governments are intrinsically parasitic. Governments produce nothing; they suck blood out of those who do. If there were no governments, merely security forces to protect property, then free enterprise would truly flourish.

That's why conservatives support tax cuts for the wealthy, and cuts in services for everyone else; they tell each other the above story: it all makes sense. Ayn Rand makes heroes of supposed producers, and villains of anyone who doesn't "produce." Roman Senators thought like that.

The villains are ordinary people, especially those who have the temerity to think they should be paid decently; they support unions because they're greedy and lazy. Roman elites felt that way about slaves. Also, governments unfairly penalize producers by caving into the mob--like weak Roman Emperors.

Unions, of course, are just gangsters, gangs to rip off the honest man's sweat, for which he worked so hard--on his telephone all day! That's why union busting, even with baseball bats and armed guards, is justified.

Paul Ryan is a Randist, apparently. It's likely Ron and Rand Paul are, too. And many tea partiers. Ayn Rand's story (above) doesn't really make sense, but that doesn't matter, it's a framework for the emerging GOP worldview; it makes emotional sense to them.

What doesn't make sense? First, if all but the few are producers, then, workers contribute nothing? What if the mighty entrepreneur hoards his money, pays his workers peanuts, and demands police repression to keep wages down? What if every hero entrepreneur acts likewise, in this perfect Randian world? Who will have the money to buy goods and services? Luxury markets do not a mass-market make. Secondly, if there is no government, who will provide collective goods like roads, rules of the market, standard measures, let alone security for everyone? (Governments do produce quite a lot, actually). Third, would everyone else agree to live in misery because they don't sit behind an Executive desk?

It doesn't matter to radical conservatives whether their arguments make sense. What matters is the story. It's surprising how persuasive it is to people whose interests are diametrically opposed.

The basic problem that progressives face is: they don't have a compelling story, not anymore. Progressives did have a story, a very compelling one, in the 1930's. It has been waning in strength ever since. The Great Recession didn't revive it, nor did Obama. Big business media won't revive it; it's "anti-business."

A spellbinding movie or novel might create a new story, or revive the old one--union solidarity defeats oppressive bosses; slaves rebel against cruel masters (Spartacus lost). Progressives need a story, badly, or we'll plunge headlong into something far worse than Rome's fall in 476.

Why Dismantle the US?

It doesn't seem to make sense that Americans, many from old families living in this country for many generations, would want to dismantle the country that nurtured them.

In my Dec. 7th blog-post, "Come-on to Apocalypse," I showed how a libertarian/conservative list was promoting relocation to any of "80 beautiful countries." Allegiance to the US seems absent among the moneyed. Their attitude: take your fortune somewhere else, where you won't be so heavily taxed/regulated/controlled. The assumption is that the US is all of these things, although our tax burden is lower than almost all other developed nations. In many developing ones, however--and some developed ones like Greece--taxes and regulations are not enforced.

I expect the emigres would evade taxes of both their new abode and their former one, but it's ironic that the site promoting emigration also highlighted free medical care, something most conservatives complain about when it's "Obamacare."

So, the financiers, or other wealthy, have places to go. Their means of enrichment, however, might even suggest a parallel to fugitives from the law, who flee the country to escape imprisonment. For example, Goldman Sachs, JP Morgan, et al, get virtually free money from the Fed, which they use to speculate through computer programs and algorithms, doing split-second trades for billions of dollars, and profiting with fractions of a cent. Actually what they are doing is ripping off millions of dollars daily, from everyone else. How different are they than the cyber-criminals who siphon unnoticeable fractions of a cent from millions of transactions? There have been crime movies, in which super-criminals invade bank security networks and do the same thing.

But Goldman, et al aren't criminals, at least in the legal sense: they're Wall Street operators. Why do they want to dismantle the US? Because they can: they can come away fabulously wealthy, but at the expense of everyone else.

The same ethos rules many American businesses: military contractors who overbill, "frackers," who don't care if they ruin our drinking water, for-profit prisons gaining "clients" from corrupt judges and manufacturers who outsource to avoid taxes and union wages.

This isn't just economics, it's politics: the effect of trade treaties. Mexican or Chinese workers undercut American labor. Trade barriers were lowered or eliminated enabling corporations to break unions and force American workers to compete with the lowest-paid labor globally.

Again, why? There is strong anti-union feeling among those who earn from capital: after all, the more a worker gets, the less they get--and vice-versa. Additionally, workers without unions can't resist the boss.

It boils down to class struggle. Capital is winning, never mind if it's destroying the country. With their money, the wealthy can always go somewhere else: one of those "80 beautiful countries." They can even find new victims.

In Rome, Senators voted to hand Italy and the Emperor over to the Ostrogoths, rather than raise taxes on themselves.