08 March 2011

Our country can't go on like this

"In Wisconsin, for example, it is impossible, I think, to separate the issues of public sector collective bargaining rights ... and the broader context of a country polarized into two camps: the very, very rich, and everyone else. This is expecially true after the bank bailouts. There is a strong argument that bailing out the banks was the right, if distasteful, thing to do because of the threat their collapse would have had on the entire economy. But watching Wall Street rack up bonuses, carry on as normal, while teachers are being asked to take big benefit cuts ... well, it's understandable why even level-headed Wisconsinites look a little Jacobin these days."

Andrew Sullivan

The problem of inequality in the United States is an elephant in the room which has grown so huge that not even the most oblivious among us can ignore it any more. I haven't been able to find any independent confirmation of Michael Moore's statement that the richest 400 Americans now own more wealth than the poorest 50% of the population (155,000,000 people!), but as these charts show, inequality is shockingly high and rapidly increasing.

At the same time, federal tax revenues as a percentage of GDP are at their lowest level since 1950, while corporate tax revenues as a share of GDP are near historic lows -- about one-sixth of what they were in the early 1950s. Yet in the teeth of all this, Republicans scream "socialism" and demand endless cuts in everything that benefits ordinary people, to "solve" an artificial budget crisis manufactured by unprecedented tax reductions.

Yes, it is necessary to run deficits at times of high unemployment to stimulate the economy -- but Republicans have fought hard against the measures which have the most stimulative effect, such as extending unemployment insurance, while defending those which have the least, such as extending the Bush tax cuts for the highest income levels. The kinds of spending cuts they are now demanding would devastate the job market. It's not about helping the economy, but about preserving the conditions that cause rising inequality.

The usual response to raising these issues is to caricature them as demands for absolute equality, something which could only be achieved by totalitarianism. Any sensible person accepts that some inequality is a reasonable and inevitable price to pay for the kind of competitive and productive economy that benefits us all. But that does not describe the situation we have now or the direction we're heading, which are intolerable and ultimately unsustainable.

There are people who will dismiss anything Moore says simply because he's the one who says it, but there's a reason why his recent speech in Wisconsin touched a nerve. As we've seen in Europe over the last few years, when the political establishment refuses to address a major problem, eventually the people will start gravitating toward those radicals and political outsiders who do address it. Nor was the reaction merely the product of an un-representative audience. Poll after poll, even Rasmussen, has shown Governor Walker's support collapsing across the state, while Obama's approval climbs. People all over the country are waking up.

Obama has not done all he could have done to address inequality, and he's perceived as having done even less -- but he's the best available alternative to the Republicans. For now. If inequality continues to grow, and if Republicans continue to insist there's nothing wrong with it and to promote policies that exacerbate it, and if Democrats don't do anything more to deal with it than they already have -- well, don't be surprised when those radicals and political outsiders start achieving serious mass support. If the Republicans wanted to see someone like Moore become President someday, all they'd need to do to bring it about is to carry on as they're now doing.

20 Comments:

Blogger LadyAtheist said...

psst: while defending those which have the least, such as extending the Bush tax cuts for the highest income levels

I think you mean the most there

08 March, 2011 05:12  
Blogger Beach Bum said...

...don't be surprised when those radicals and political outsiders start achieving serious mass support.

What interested me about the recent Egyptian uprising was how it was driven by the young who are educated and unemployed. If inequality does continue to grow, and unfortunately I believe it will, as the older baby boomer generation dies off but whose remnants continue to hold major political power I can almost see the same youth driven uprisings happening here.

08 March, 2011 05:17  
Blogger LadyAtheist said...

Well said and too true. I think it's not inequality per se but unfairness that will motivate people. The Republicans can get the vote of the people who admire the rich and believe (wrongly) that America is the type of place where anyone can become a billionaire. I believe that's why the lower middle class votes for them. They believe (wrongly) that people get what they deserve/earn here.

They also compartmentalize: they slam "welfare mothers" and "anchor babies" but won't support planned parenthood. Poor people will continue to have babies and those babies did nothing to deserve their poverty.

Likewise, elderly people who trusted that social security and their pensions would be there for them did nothing to deserve their fate.

When the word "entitlement" is used it leaves a bad taste in everyone's mouth. "Safety net" got thrown out because when you control vocabulary you control ideas.

08 March, 2011 05:17  
Blogger Ahab said...

What do you see happening if this trend continues, exacerbated by Republican policies and rhetoric?

08 March, 2011 05:39  
Blogger One Fly said...

Agreed - however I am very tired of having to be satisfied with accepting so much less.

Obama has not done all he could have done to address inequality, and he's perceived as having done even less -- but he's the best available alternative to the Republicans.

08 March, 2011 05:40  
Blogger Infidel753 said...

LA: I meant "defending those [measures] which have the least [economic stimulative effect]", contrasting with the previously-mentioned measures which have the most such effect.

BB: Egypt, too, doesn't produce enough jobs for the number of educated young people it produces. That's why a lot of them end up going to richer but more backward Arab countries like Libya or Saudi Arabia to find jobs. That's not much of an option for Americans who don't like to emigrate. In the US, too, a large cohort of frustrated young people could well lead to instability.

Concentration of wealth in the hands of a few is also a factor in Arab countries, although there the main culprit is corruption, not the tax structure.

LA: Thanks. Despite the myths, the US now has less social mobility than most other developed countries -- if you're born poor, you have a better chance of becoming well-off in Canada or western Europe than here.

They also compartmentalize: they slam "welfare mothers" and "anchor babies" but won't support planned parenthood.

This is the religious/sexual taboo system clashing with the economic ideology. Too bad they don't take the give-to-the-poor aspect of Christianity equally seriously.

Ahab & 1F: As adumbrated in the last paragraph, I'd expect to see growing support for some kind of radical populist redistributionist agenda, to the point that a faction embodying that agenda becomes a major force in the Democratic party and, if there's still no change, becomes dominant within the party and ultimately the country. This would parallel what is already happening in Europe, where anti-immigration and anti-EU viewpoints, which the political and media mainstream still dismiss as lunatic-fringe, have broad or even majority support in some countries and have raised political outsiders like Geert Wilders to the status of major players.

08 March, 2011 06:32  
Blogger tnlib said...

Where's my anti-depressant pill? Now I know why I'm having the bloggy blues. . . . And I feel just that much sadder because I can only agree with you.

Up until just a few weeks ago I still had some hope. I signed on to support Obama's Organizing for America here in TN and my spirits were running pretty high as a direct result of the protests in WI. I was even about to write a post admonishing - once again - the far left for making Obama the enemy because I sincerely felt that the bigger enemy is the far right and that they are systematically and single handily destroying our country. To a major extent, this is still true and I do feel the left needs to unite against a common enemy.

But now the "common enemy" seems to include more than Republicans and Tea Partiers. The "common enemy" is right in my backyard and includes my Democratic representatives as well as my President.

I haven't totally given up but I'm at the point where a tiny little feather could knock me over the cliff.

08 March, 2011 08:55  
Blogger Infidel753 said...

TNLib: I certainly wasn't portraying Obama as the enemy. He could have done more, but he's not the enemy.

The mass movement provoked by Walker in Wisconsin and beyond is an encouraging sign. It's the beginning of the push toward addressing the problem of inequality to which I alluded in my comment above. It's the Republicans who ought to be worrying.

08 March, 2011 10:41  
Blogger tnlib said...

I did not mean to imply that you, of all people, consider Obama the enemy. But I do see people on the far-left, not only on blogs but on FB as well, who are just as vitriolic in their criticism of the president as the people on the far-right. And not just occassionally - all the time, no matter what Obama says or does. I don't think they can see the BIG picture, which is the very real danger from the right, and that if we don't get united/active as is being done in WI, the right will bring the country to its knees.

08 March, 2011 13:15  
Blogger tnlib said...

This is an article I posted on FB today - along with my comment. In an odd sort of way, it kind of gives me a little hope.

http://www.washingtonpost.com/wp-dyn/content/article/2011/03/06/AR2011030603134.html

Comment:
"VA's state educ bd recently approved textbooks full of historical inaccuracies. My mom used to say that some people are so stupid they don't know they're stupid.

Having said that, I kind of interpret the outcome as a good sign. VA is not ex...actly a hot bed of liberalism or even of moderation, so I'm pleased to see that Republicans voted against most of the TP agenda. I also think it may be a small indication that at least some Republicans are now realizing that they are about to get screwed in the back by the very group they've been humping for two years. Sweet justice."

08 March, 2011 14:10  
Blogger The Heathen Republican said...

As long as incomes are rising across the board and our social safety nets are firmly in place, what does it matter if the wealthy are so wealthy? To paraphrase another progressive argument, what's the harm to you if someone else makes a lot of money?

08 March, 2011 17:20  
Blogger Infidel753 said...

TNJLib: The link doesn't work, at least for me -- are you sure it's correct?

There are certainly fissures among Republicans. The turn of public opinion against Walker may well be encouraging some of the more moderate ones to stand up to the teabaggers. If so, it can only be a good thing.

HR: But real incomes are not rising. For most people they're pretty much stagnant. And persistent high unemployment means a de facto contraction of middle-class spending power.

As I noted in the post, the unprecedented reductions of tax rates for the wealthiest over the last decade (which are a big part of the reason for rising inequality) have created an artificial budget crisis which is now being used as a pretext for cutting programs that benefit the middle class and the poor (those "social safety nets" you mention), as well as for job-killing austerity policies. That is to say, the explosion of wealth among the very richest and the erosion of the standard of living for everyone else are two sides of the same phenomenon -- the one is rooted in the other. This needs to be stopped. Taxes on the highest incomes should be raised back to some reasonable level -- to what they were under Reagan, say -- so as to restore funding for those programs and, to put it bluntly, to re-distribute some of the wealth back to the people who do most of the work of producing it.

If it's true that the richest 400 people own as much wealth as the poorest 155,000,000, then anybody who thinks that situation is acceptable simply isn't dealing with the real world.

08 March, 2011 18:21  
Blogger Infidel753 said...

PS: Wisconsin Republicans could be caving?

08 March, 2011 18:58  
Blogger The Heathen Republican said...

But real incomes are not rising.

Funny you should say that. I just finished Mr. Obama's Economic Report of the President today, and apparently even he agrees with me that "real incomes" are rising.

I'd show you the graph, but my post isn't up yet. But you'll find it on page 54 of the report.

I don't want to try and counter your other arguments (for all I know, you're exactly right; plus I don't want to be contentious), but I note you didn't answer the question I posed: what does it matter to you and me if the wealthy are wealthy? Even if the wealthiest 400 are wealthier than 50% of us?

08 March, 2011 19:03  
Blogger Infidel753 said...

I was referring to the longer-term trend. Over the last decade, real incomes have been pretty much stagnant.

I note you didn't answer the question I posed: what does it matter to you and me if the wealthy are wealthy?

I did: "the unprecedented reductions of tax rates for the wealthiest over the last decade (which are a big part of the reason for rising inequality) have created an artificial budget crisis which is now being used as a pretext for cutting programs that benefit the middle class and the poor (those "social safety nets" you mention), as well as for job-killing austerity policies. That is to say, the explosion of wealth among the very richest and the erosion of the standard of living for everyone else are two sides of the same phenomenon -- the one is rooted in the other."

While investors do contribute something to the production of wealth, it's absurd to think that the 400 richest people in the country actually contribute as much to the economy as the poorest 155,000,000 people do. There are people who make $50,000,000 a year, but those people are not creating 1,000 times as much wealth as someone who makes $50,000 a year. The last couple of years make it fairly obvious that the activities of many financial speculators, who have incomes in the millions, actually subtract wealth from the economy, not create it.

The low-tax, low-regulation, laissez-faire policies we've increasingly had in place result in a huge shift of wealth away from the masses who produce it, toward a small class consisting mostly of those who already had the most money in the first place. That is why it matters to the masses that wealth is becoming concentrated in a few hands -- they produced that wealth, and it's being diverted away from them for the benefit of those who are best positioned to game the system to their own benefit.

09 March, 2011 05:09  
Blogger Ranch Chimp said...

A pretty balanced posting Infodel. I havent read all the chart's or such, but I have been writing about this as you know for long ... this was visible as day even a few year's back, but most folk's were concerned with many other issue's. This is all what I call the "privatization of America", and I know some will look at that and say I dont know what I am talking about and/ or where's the connection ? ... and it's too long to explain here. But folk's will see eventually "Why" this is being done, they will also see thing's they overlooked, like all who are paid off in our representation and just how deep this already is. As I have wrote time and again ... this is all constructed to break down government/ public oversight, right's, bargaining, you just about name it ... and it isnt only America ... this is a global effort and has been more successful than we realize, because they have already even influenced the Supreme Court in our country too. The Chinese gvmnt in time will give some of these folk's a "hard time" actually, because their fixin to get played "big time" ... but the Chinese already suspect's it, when they seen their real estate market's being all bought out. Just my thought's, I'll shut up now.

09 March, 2011 05:42  
Blogger Ranch Chimp said...

Also if I may add here Infodel ... one of the most hilarious thing's that I seen in all this ... had to be right after the bailout's, and no ... we wont go to Hell without bailout's, or our kid's end up in soup kitchen's for eternity, heh, heh, heh, heh, heh ... bailing them out, on the other hand will put us in the soup kitchen! :) (duuuhhhh, which we done, or at least our rep's) ... There are still thing's like bankruptcy protection's, liquidation's, and of course, when any business fail's large or small, it simply collapses, get's bought out and a conversion investment process of new investment's take's place, etc. But back to the funny thing (I lose track due to my old age I reckon, heh, heh, heh, heh, heh) was the explosion of tele and online ad's/ commercial's by insurer's, mega finance, bank's, investment firm's, etc ... yet ... get this ... the interest off the billion's we gave them alone will actually pay all the ad's and even all the bonuses without tapping into the revenue's ... heh, heh, heh, heh, heh ... these folk's are REAL hustler's, I got to give it to them on this ... and America ... well ... got really pinched, but so did other's around the globe too. But this advertising isnt small time at all ... it is the top of the line prime time ad's ... the motherlode of ad's and marketing, heh, heh, heh, heh, heh .... surrounded and smothered all over them favourite prime time show's about cheating triplet's and love triangle's, sex celebrity gossip and all the other show's they sponsor, because they know that ten's of million's will get glued to it, and then they throw in their message's with lovely music and people in them, to get into the subconcious (same as "backmasking" technique's in rock music basically)... it's just old advertising and marketing gimmick's using the best of the best new tech's and strategies ... but it had me laughing up a storm when I first started seeing them, because these were all the folk's who were failing and weeping just a year earlier ... dd we buy it .... by golly ... once again .. we sure did! :)

09 March, 2011 06:30  
Blogger godlizard (aka dotlizard) said...

This is why GOP lawmakers in 32 states are currently trying to get "voting reform" bills passed, which will put up barriers like requiring ID or proof of citizenship. It's the attack on ACORN all over again, they know full well that high voter turnout goes against them and they want to prevent that by making it more difficult for those with limited resources to jump through the necessary hoops. source: http://news.yahoo.com/s/yblog_theticket/20110308/ts_yblog_theticket/ahead-of-the-2012-campaign-states-debate-voting-rights

Also, thanks for writing this, it's one of the most concise and compelling summaries of the current situation that I've read.

09 March, 2011 08:58  
Blogger Rain said...

I've read some real vitriol from the left, people who do care, who list off what the United States has done is continuing to do, and have lost hope in Obama totally-- things like selling out any real hope of getting medical costs down for all Americans.

I realize (and think they do also) that anything he does is labeled socialism and causes fear to rise from the far right as well as increases their hate. They then vote for more extreme people like Sharron Angle. Obama is in a bad spot.

I can though see myself voting for someone like Michael Moore if he decided to run even knowing his views are farther left than mine and that he'd have a hard time doing anything even if he won; but it'd be worth the try. If a far leftie runs independently or even in the primary, Obama won't find it so easy to win again. BUT where does that take us? To a Sarah Palin or Mike Huckabee, both scary options to me-- in fact all the Republican options scare me.

I haven't given up though and still believe there is hope but it requires Americans especially voting for Democrats in local and state offices and especially for governors. We can see how important that is now if we didn't know it before. It's not just what happens at the federal level that matters. A lot of this damage right now is being attempted at the state level.

09 March, 2011 14:18  
Blogger Infidel753 said...

RC: It's a bit much when the same entities that got bailed out, now that they're stabilized again, lobby to keep their taxes low and thus keep budgets in crisis.

GL: It's getting to the point that vote suppression is all they have left. They were only successful in 2010 because voter turn-out was so low. We can expect to see more efforts to limit voting rights between now and November 2012.

Rain: It's important to keep up pressure for real pro-reform policies and candidates within the Democratic party. Any third-party challenge would just deliver whatever office was being contested to a Republican -- and as we've seen, they are worse. One of the few good things that came out of 2010 was that it was mostly blue dogs that lost their seats. The praty is likely to be more unified and activist now, if it recovers the House.

As for Obama, he's been disappointing in some ways, but I'd rather see him issuing executive orders, filling Supreme Court seats, etc. for the next four years than any Republican, even the moderate ones.

09 March, 2011 18:42  

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