Monday, September 19, 2011

Class War?

[Edited 9/20&25/11]
For as long as I can remember, Republican leaders, and others of the endless greed persuasion, have accused those progressive Democrats, few of which remain today, of engaging in "class war" or "class warfare."

Whenever progressives suggest even modest restructuring of the tax system, back towards what it had been in those prosperous years when Americans were solidly in favor of a progressive tax system which insisted that the fortunate rich contribute a higher percentage of taxes than the unfortunate poor, the Republicans, and now even some misguided and comfortable Libertarians and the right-wing Flea Paty, have made efforts to shut them down.

In the last few decades, with the greedier corporations taking near total control of the propagandistic ideology produced by US media, as well as financial control over our political process, ideas like progressive taxation, not to mention the rights of laboring Americans, have been under constant attack. During that time, the percentage of taxes paid by wealthy Americans and corporations has shrunk to levels beyond the elite's wildest dreams back in the 1970's, worker wages stagnated and the gap between rich and poor widened significantly. This largely Republican "class war" on American working people and the poor has succeeded in reducing millions to joblessness, homelessness, and poverty, and yet, they persist in claiming that anyone, even a corporate Democrat like Barak Obama, is engaging in "class war" when he recognizes the problem and proposes policies that might even slightly help to reverse the trend.

The fact is, there is a class war going on in America, and while it has violent consequences for the poor and unfortunate here and around the world, in the reality of poverty, war, and all that it entails, the real problems created by it have not yet affected the fortunate among us. Having been saturated in right-wing corporate propaganda, even many poor people have difficulty discerning the true causes of their extreme discomfort.

One reason for this is that, as Huxley envisioned, and others understood, "There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties taken away from them, but will rather enjoy it, because they will be distracted from any desire to rebel. . . ."

Think of the endless advertisements for anti-depressant medications on television promising to make the personally intolerable perceptions of many into an accommodating if mindless bliss.

Of course corporate television has another role, as hinted at by Huxley, and described by George Orwell in 1984:
"The process [of mass-media deception] has to be conscious, or it would not be carried out with sufficient precision, but it also has to be unconscious, or it would bring with it a feeling of falsity and hence of guilt.... To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies - all this is indispensably necessary."

Today's news about the wars in Iraq, Afghanistan, Pakistan, Libya, and etc., are full of rich examples, as are the reports of record poverty and joblessness here in the good old USA.

In Iraq, we continue to keep troops there, though we all know the reasons for the war were completely bogus.

In Afghanistan, we continue to fight a war about Al Qaeda and Osama bin Laden, even though Al Qaeda are of little influence and Osama is supposed to be dead, while our hatreds are now transferred to the Taliban there and in Pakistan.

In Libya, a war we supposedly engaged in to protect civilians, has resulted in many needless deaths, at least 30 to 50 thousand civilians, including a racist pogrom that has claimed the lives of hundreds, if not thousands, of black African migrant workers. NATO bombs continue to fall, killing civilians in support of antagonistic groups of tribal rebels intent on regime change--all this for control of oil, even though the original intent was said to be protecting civilians.

Through all this, the US continues to largely ignore the killings in Yemen, Bahrain, and Egypt, not to mention our long-standing support of Israel's slaughters in Palestine and Lebanon.

At home, we are urged to forget our successful history of taxing the rich at a time when corporate taxes and taxes on the rich have reached nearly historic lows, and when the working people of this country are experiencing painful and devastating joblessness, foreclosures and a seemingly hopeless future. Unions are penalized and demonized, even though they are what brought prosperity to the middle classes of past decades.

In addition, today's numerous television crime programs and movies portray a society where the poor and disenfranchised are demonized for acting in stereotypical ways, usually wildly exaggerated. Their civil rights are routinely violated in many of these crime programs, thus reinforcing the idea that they are sub-human, and worthy of any punishment they might receive from an uncaring society. Another aspect of the corporate media's agenda is the plethora of television programs and movies glorifying militarism and war. Given the lack of other opportunities, due in part to the class war by the wealthy, the disadvantaged come to see the military as a career which can provide them security and self esteem.

The poor have successfully been inculcated with a false consciousness that makes them unaware of their true oppressors, and to instead see the oppressor as their benefactors. How else can the elite get them to fight and die in resource/economic wars for a country that could care less about them--a country that does not provide for their livelihoods, higher education and health care--without fooling them with smiles, merit badges and lies? How else can one account for the passivity of the poor when the well-off in their own communities treat them as people who only exist to mow their lawns, clean their houses, serve as little more than ping-pong balls in the prison-industrial complex, and who are expected to increase the property values of their better off neighbors? How else can one account for the poor voting for people who don't serve their interests, but who instead fill them with falsehoods, and use them as tools for their own enrichment? The poor, and the society as a whole, must be led to believe that the problems of the poor are caused by the poor alone, even if they were abused in childhood and beyond, and were never afforded the many opportunities of those better off.

In the 1930's, there was no television or internet to distract people, only the useful, but much less effective propagandistic tools of radio and newsprint, not to mention the effects of the educational establishment and many "professional" psychologists/counselors. Today, the system has many effective distractions and much more effective propaganda, all of which train us for economic enslavement and distract us from our real problems, including those associated with class. These tools are used effectively to make people confused about who their real enemies are, and in the end, some of the downtrodden come to love and identify with their enemies. That is the new/old reality, and it is why our problems, especially the problems facing the less fortunate, are becoming intractable. One can't solve a problem if one is deceived by leaders and others about what the problem really is.

The problem is class war by the fortunate against the unfortunate, but it has been presented and disguised as a class war by the unfortunate against the fortunate, and the fortunate have far fewer scruples. The supporters of this elitist war on the poor, Republican, Democrat, or whatever, have little heart or compassion, and they should be treated accordingly. This is the real war, in America, Baker City, and elsewhere, and it is the only war worth fighting, if you happen to be poor in America.

As Richard Wolff notes in the article directly below:

"The final irony of loose talk about class war is this: the Republican and conservative voices opposing all tax increases for corporations and the rich thereby provoke, as Buffett intimated and New York Mayor Michael Bloomberg more explicitly warned last week, a renewal of class consciousness in the US. Then, Washington might learn what class war really is."

The truth about 'class war' in America
Republicans claim, in Orwellian fashion, that Obama's millionaire tax is 'class war'. The reality is that the super-rich won the war

Richard Wolff, Monday 19 September 2011

Republicans and conservatives always fight back against proposals to raise taxes on corporations and rich individuals by making two basic claims. First, such proposals amount to un-American "class warfare", pitting the working class against corporations and the rich. Second, such proposals would take money for the government that would otherwise have been invested in production and thus created jobs.

Neither logic nor evidence supports either claim. The charge of class war is particularly obtuse. Consider simply these two facts. First, at the end of the second world war, for every dollar Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. Today, that ratio is very different: for every dollar Washington gets in taxes on individuals, it takes 25 cents in taxes on business. In short, the last half century has seen a massive shift of the burden of federal taxation off business and onto individuals.

Second, across those 50 years, the actual shift that occurred was the opposite of the much more modest reversal proposed this week by President Obama; over the same period, the federal income tax rate on the richest individuals fell from 91% to the current 35%. Yet, Republicans and conservatives use the term "class war" for what Obama proposes – and never for what the last five decades have accomplished in shifting the tax burden from the rich and corporations to the working class.

The tax structure imposed by Washington on the US over the last half-century has seen a massive double shift of the burden of taxation: from corporations to individuals and from the richest individuals to everyone else. If the national debate wants seriously to use a term like "class war" to describe Washington's tax policies, then the reality is that the class war's winners have been corporations and the rich. Its losers – the rest of us – now want to reduce our losses modestly by small increases in taxes on the super-rich (but not, or not yet, on corporations).

To refer to this effort as if it had suddenly introduced class war into US politics is either dishonest or based on ignorance of what federal tax policies have actually been. Or perhaps, for conservatives, it is a convenient mixture of both.

Much the same sort of analysis applies to the Republican claims that taxing corporations and rich people takes money that would otherwise be invested in business growth and thus create jobs. Last Friday, the US Federal Reserve reported a record quantity of cash on the books of US businesses (over $2tn). Even with the currently low taxes on businesses and the rich, that money is not being invested and is not creating jobs. It is not being distributed to anyone else and so is not being spent on consumer goods either. Taxing a portion of that money to finance Washington's stimulation of the economy by spending that money – or even better, by using it to hire and pay the unemployed – would be a much more effective way to provide jobs than leaving it as cash hoards in corporations' coffers.

Last month, Warren Buffett upset many of his "mega-rich friends" by what he stated categorically in a New York Times op-ed. He made it clear that he had never encountered any serious investor who decided whether or not to invest based on tax rates. It was always the prospects of profit that made the difference. He then urged Americans to raise taxes on the rich like himself. He also hinted – none too subtly – that it was becoming politically dangerous for the whole economic system's survival to keep having the minority of extremely rich people paying federal tax at lower rates than the middle- and low-income majority.

The final irony of loose talk about class war is this: the Republican and conservative voices opposing all tax increases for corporations and the rich thereby provoke, as Buffett intimated and New York Mayor Michael Bloomberg more explicitly warned last week, a renewal of class consciousness in the US. Then, Washington might learn what class war really is.


February 13, 2010 09:00 AM
The Real Battle: Deficit Reduction is Class War

By Susie Madrak

Here's a really good post on the deficit wars - and the myth of economic "recovery." [via Corrente]

For about 20 years now, I've been warning people that the continuing rise in home values was unsustainable - and bad for the economy. I can't stress this enough: Shelter is shelter, and not an investment. Speculating in residential real estate on the basis of constantly-increasing equity is a relatively recent development that drives a lot of bad economic and social consequences. (Don't even get me started on what a very bad idea it is to use property taxes to fund school systems.)

Using houses as ATM distorted many things in the economy, not the least of which was the parallel stagnation in wages. Think about this: since the 70s, we've seen a steady rise in women working outside the home, a rise in property values, and a monstrous increase in personal debt.

Yet wages never kept pace with any of that. (In fact, those of us who still have jobs are now working harder for less money than we earned in the 1970s.) But with a working spouse bringing in additional income and home equity loans, we could convince ourselves that increasing equity was the same as earning more.

It also kept things calm on the domestic political front, because we bought the illusion that the economy was rewarding us. (Which is one of the reasons why otherwise conservative Republicans were always so supportive of women going to work. It helped keep wages low.)

Even though I see great amounts of psychic pain in the transition, I believe that deflated housing prices are an ultimate good. Housing simply shouldn't cost this much when we aren't earning enough to pay for them; we shouldn't have to take out equity loans to get by.

Which is why I'd recommend that you read Jesse's entire article. He points out that the bulk of Obama's bailout funds and the thrust of his policies is aimed not at bailing out underwater mortgages for drowning homeowners, but to reinflate the value of the bad housing assets.

In other words, to continue the class war on behalf of the bankers. view of the rising and well-subsidized efforts of Harold Ford and his fellow Corporate Democrats, the actual “bipartisan” aim seems to be to provide political cover for cutting spending on labor and on social services. Obama already has sent up trial balloons about needing to address the Social Security and Medicare deficits, as if they should not be financed out of the general budget by taxpayers including the higher brackets (presently exempted from FICA paycheck withholding).

Traditionally, running deficits is supposed to help pull economies out of recession. But today, spending money on public services is deemed “bad,” because it may be “inflationary” – that is, threatening to raise wages. Talk of cutting deficits thus is class-war talk – on behalf of the FIRE sector.

The economy needs deficit spending to avoid unemployment and poverty, to increase social spending to deal with the present economic shrinkage, and to maintain their capital infrastructure. The federal government also needs to increase revenue sharing with states forced to slash their budgets in response to falling tax revenue and rising unemployment insurance.

But the deficits that the Bush-Obama administration have run are nothing like the familiar old Keynesian-style deficits to help the economy recover. Running up public debt to pay Wall Street in the hope that much of this credit will be lent out to inflate asset prices is deemed good. This belief will form the context for Wednesday’s State of the Union speech. So we are brought back to the idea of economic recovery and just what is to be recovered.

Financial lobbyists are hoping to get the government to fill the gap in domestic demand below full-employment levels by providing bank credit. When governments spend money to help increase economic activity, this does not help the banks sell more interest bearing debt. Wall Street’s golden age occurred under Bill Clinton, whose budget surplus was more than offset by an explosion of commercial bank lending.

The pro-financial mass media reiterate that deficits are inflationary and bankrupt economies. The reality is that Keynesian-style deficits raise wage levels relative to the price of property (the cost of obtaining housing, and of buying stocks and bonds to yield a retirement income). The aim of running a “Wall Street deficit” is just the reverse: It is to re-inflate property prices relative to wages.

Go read the whole thing.


Robert Reich Debunks 6 Big GOP Lies About The Economy

Is Social Security a Ponzi scheme as Republican Presidential candidate Rick Perry claims? Noted author and former U.S. Labor Secretary Robert Reich debunks that claim and five other lies the right-wing tells about taxes, government and the economy.

The lies Reich debunks:

1) Tax cuts to the rich and corporations trickle down to the rest of us. 

2) If you shrink government you create jobs.

3) High taxes on the rich hurts the economy.

4) Debt is to be avoided and it is mostly caused by Medicare. 

5) Social Security is a Ponzi scheme

6) We need to tax the poor.

Reich was speaking at the "Summit For A Fair Economy" in Minneapolis, Minnesota on September 10, 2011.


Tax Breaks Are Heavily Tilted Toward High Income Taxpayers
Dean Baker
Beat the Press 9/18/11

The Post had a front page column reporting on the cost of tax breaks. The piece likely gave many readers a misleading picture of the main beneficiaries of these tax cuts when it told readers that:

“the bulk went to private households, primarily upper-middle-class families that Obama has vowed to protect from new taxes. ‘The big money is in the middle-class subsidies,’ said Syracuse University economist Leonard Burman, former director of the nonpartisan Tax Policy Center.


In fact, by far the largest beneficiaries of these tax cuts are upper income individuals as the chart accompanying the piece shows. For example, tax breaks amount to average of $82,400 for families with income between $500,000 and $1,000,000. Close to 70 percent of the mortgage interest deduction goes to families with incomes above $100,000 a year.

These tax breaks tend to be worth less to more moderate income families since in most cases they do not amount to much more than the standard deduction. That means that most families near the median income (@$60,000) see little benefit from these tax breaks.

Republicans Are Not Being Truthful When They Blame "Uncertainty" for Lack of Hiring

Dean Baker
Beat the Press
Monday, 19 September 2011 04:11

The Washington Post has a front page article outlining President Obama's plans for deficit reduction. It then quotes Representative Paul Ryan blaming "uncertainty" for slow growth and high unemployment.

. . . .[see article]

In short, the evidence does not support Representative Ryan's assertion that uncertainty is a major obstacle to hiring and recovery. It would have been appropriate to call readers attention to the fact that the data contradicts Ryan's assertions. Post reporters have the time to evaluate the evidence, the vast majority of its readers do not.

Serious news stories, unlike this one, do not include in their first sentence a reference to "the nation’s rocketing federal debt." Such phrases are best left for the opinion pages.

Did the Stimulus Help?
By James Kwak

This could be a midsize political battle in the run-up to the midterm elections, as discussed by The New York Times. The positions on both sides are too obvious to warrant repeating. If I recall correctly, the Obama administration hurt itself by underestimating the course of future unemployment a year ago when it passed the stimulus (most people were making the same mistake at the time), so now if you compare actual unemployment against original projections it looks like the stimulus had no impact. But that was a forecasting error and has nothing in itself to do with the stimulus itself.

Menzie Chinn has an overview post on the debate in which he argues that, at least from the standpoint of economists, it’s hardly a debate: the stimulus worked.

He points out that leading private-sector economic consulting firms are crediting the stimulus with significant impacts on GDP growth and employment. Here’s the money chart (originally from the Times):

[see article for chart]

Chinn discusses the types of models used to generate those forecasts, and competing models used by a few academics that yielded different results. He also points out that the CBO also estimates significant growth and employment impacts. If you want to pursue the matter further, he links to a couple of contrary arguments.

Of course, none of this will matter in the end because, as someone (Barney Frank?) said, you can’t get elected saying things would have been even worse without you. Unemployment will still be high in November and the Republicans will blame it on Obama. Voters aren’t going to believe macroeconomic models, don’t realize that unemployment is a lagging indicator, and will (with a little justification) think that Obama could have done more to create jobs.

More from CEPR
The Impact of Cutting Social Security Cost of Living Adjustments on the Living Standards of the Elderly

September 20, 2011, Dean Baker and David Rosnick
During the negotiations over raising the debt ceiling, President Obama proposed cutting the annual cost of living adjustment for Social Security by switching to an index that would show a lower measured rate of inflation. This alternative index, the chained consumer price index (CCPI-U), shows an annual rate of inflation that averages approximately 0.3 percentage points less than the consumer price index (CPI-W) that is currently used to index benefits. While this change would lead to $122 billion in savings to the government over the next decade, it also means that beneficiaries would receive lower benefits.

Since the vast majority of retirees rely on Social Security for the bulk of their retirement income, this cut in the cost of living adjustment would imply a substantial reduction in the standard of living of retirees, unless they offset it by saving more during their working years or retiring later in life. While we cannot know for sure how workers in future years will adjust their behavior, this paper assesses their past response to changes in the cost of living adjustment. It finds that they were not able to raise their non-Social Security income in response to cuts in Social Security benefits.

See Report:
The Impact of Cutting Social Security Cost of Living Adjustments on the Living Standards of the Elderly

"People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome." - George Orwell
"a man hears what he wants to hear
And disregards the rest"
From "The Boxer" by Paul Simon

Bruce Springsteen: Born in the USA 1984

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