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Author: Subject: Revolt Of The Rich

Zen Peach





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  posted on 8/28/2012 at 10:22 AM
An interesting perspective.

quote:
Revolt of the Rich

Our financial elites are the new secessionists.

By Mike Lofgren • August 27, 2012

It was 1993, during congressional debate over the North American Free Trade Agreement. I was having lunch with a staffer for one of the rare Republican congressmen who opposed the policy of so-called free trade. To this day, I remember something my colleague said: “The rich elites of this country have far more in common with their counterparts in London, Paris, and Tokyo than with their fellow American citizens.”

That was only the beginning of the period when the realities of outsourced manufacturing, financialization of the economy, and growing income disparity started to seep into the public consciousness, so at the time it seemed like a striking and novel statement.

At the end of the Cold War many writers predicted the decline of the traditional nation-state. Some looked at the demise of the Soviet Union and foresaw the territorial state breaking up into statelets of different ethnic, religious, or economic compositions. This happened in the Balkans, the former Czechoslovakia, and Sudan. Others predicted a weakening of the state due to the rise of Fourth Generation warfare and the inability of national armies to adapt to it. The quagmires of Iraq and Afghanistan lend credence to that theory. There have been numerous books about globalization and how it would eliminate borders. But I am unaware of a well-developed theory from that time about how the super-rich and the corporations they run would secede from the nation state.

I do not mean secession by physical withdrawal from the territory of the state, although that happens from time to time—for example, Erik Prince, who was born into a fortune, is related to the even bigger Amway fortune, and made yet another fortune as CEO of the mercenary-for-hire firm Blackwater, moved his company (renamed Xe) to the United Arab Emirates in 2011. What I mean by secession is a withdrawal into enclaves, an internal immigration, whereby the rich disconnect themselves from the civic life of the nation and from any concern about its well being except as a place to extract loot.

Our plutocracy now lives like the British in colonial India: in the place and ruling it, but not of it. If one can afford private security, public safety is of no concern; if one owns a Gulfstream jet, crumbling bridges cause less apprehension—and viable public transportation doesn’t even show up on the radar screen. With private doctors on call and a chartered plane to get to the Mayo Clinic, why worry about Medicare?

Being in the country but not of it is what gives the contemporary American super-rich their quality of being abstracted and clueless. Perhaps that explains why Mitt Romney’s regular-guy anecdotes always seem a bit strained. I discussed this with a radio host who recounted a story about Robert Rubin, former secretary of the Treasury as well as an executive at Goldman Sachs and CitiGroup. Rubin was being chauffeured through Manhattan to reach some event whose attendees consisted of the Great and the Good such as himself. Along the way he encountered a traffic jam, and on arriving to his event—late—he complained to a city functionary with the power to look into it. “Where was the jam?” asked the functionary. Rubin, who had lived most of his life in Manhattan, a place of east-west numbered streets and north-south avenues, couldn’t tell him. The super-rich who determine our political arrangements apparently inhabit another, more refined dimension.

To some degree the rich have always secluded themselves from the gaze of the common herd; their habit for centuries has been to send their offspring to private schools. But now this habit is exacerbated by the plutocracy’s palpable animosity towards public education and public educators, as Michael Bloomberg has demonstrated. To the extent public education “reform” is popular among billionaires and their tax-exempt foundations, one suspects it is as a lever to divert the more than $500 billion dollars in annual federal, state, and local education funding into private hands—meaning themselves and their friends. What Halliburton did for U.S. Army logistics, school privatizers will do for public education. A century ago, at least we got some attractive public libraries out of Andrew Carnegie. Noblesse oblige like Carnegie’s is presently lacking among our seceding plutocracy.

In both world wars, even a Harvard man or a New York socialite might know the weight of an army pack. Now the military is for suckers from the laboring classes whose subprime mortgages you just sliced into CDOs and sold to gullible investors in order to buy your second Bentley or rustle up the cash to get Rod Stewart to perform at your birthday party. The sentiment among the super-rich towards the rest of America is often one of contempt rather than noblesse.

Stephen Schwarzman, the hedge fund billionaire CEO of the Blackstone Group who hired Rod Stewart for his $5-million birthday party, believes it is the rabble who are socially irresponsible. Speaking about low-income citizens who pay no income tax, he says: “You have to have skin in the game. I’m not saying how much people should do. But we should all be part of the system.”

But millions of Americans who do not pay federal income taxes do pay federal payroll taxes. These taxes are regressive, and the dirty little secret is that over the last several decades they have made up a greater and greater share of federal revenues. In 1950, payroll and other federal retirement contributions constituted 10.9 percent of all federal revenues. By 2007, the last “normal” economic year before federal revenues began falling, they made up 33.9 percent. By contrast, corporate income taxes were 26.4 percent of federal revenues in 1950. By 2007 they had fallen to 14.4 percent. So who has skin in the game?

While there is plenty to criticize the incumbent president for, notably his broadening and deepening of President George W. Bush’s extra-constitutional surveillance state, under President Obama the overall federal tax burden has not been raised, it has been lowered. Approximately half the deficit impact of the stimulus bill was the result of tax-cut provisions. The temporary payroll-tax cut and other miscellaneous tax-cut provisions make up the rest of the cuts we have seen in the last three and a half years. Yet for the president’s heresy of advocating that billionaires who receive the bulk of their income from capital gains should pay taxes at the same rate as the rest of us, Schwarzman said this about Obama: “It’s a war. It’s like when Hitler invaded Poland in 1939.” For a hedge-fund billionaire to defend his extraordinary tax privileges vis-à-vis the rest of the citizenry in such a manner shows an extraordinary capacity to be out-of-touch. He lives in a world apart, psychologically as well as in the flesh.

Schwarzman benefits from the so-called “carried interest rule” loophole: financial sharks typically take their compensation in the form of capital gains rather than salaries, thus knocking down their income-tax rate from 35 percent to 15 percent. But that’s not the only way Mr. Skin-in-the-Game benefits: the 6.2 percent Social Security tax and the 1.45 percent Medicare tax apply only to wages and salaries, not capital gains distributions. Accordingly, Schwarzman is stiffing the system in two ways: not only is his income-tax rate less than half the top marginal rate, he is shorting the Social Security system that others of his billionaire colleagues like Pete Peterson say is unsustainable and needs to be cut.

This lack of skin in the game may explain why Romney has been so coy about releasing his income-tax returns. It would make sense for someone with $264 million in net worth to joke that he is “unemployed”—as if he were some jobless sheet metal worker in Youngstown—if he were really saying in code that his income stream is not a salary subject to payroll deduction. His effective rate for federal taxes, at 14 percent, is lower than that of many a wage slave.

After the biggest financial meltdown in 80 years and a consequent long, steep drop in the American standard of living, who is the nominee for one of the only two parties allowed to be competitive in American politics? None other than Mitt Romney, the man who says corporations are people. Opposing him will be the incumbent president, who will raise up to a billion dollars to compete. Much of that loot will come from the same corporations, hedge-fund managers, merger-and-acquisition specialists, and leveraged-buyout artists the president will denounce in pro forma fashion.

The super-rich have seceded from America even as their grip on its control mechanisms has tightened. But how did this evolve historically, what does it mean for the rest of us, and where is it likely to be going?

That wealth-worship—and a consequent special status for the wealthy as a kind of clerisy—should have arisen in the United States is hardly surprising, given the peculiar sort of Protestantism that was planted here from the British Isles. Starting with the Puritanism of New England, there has been a long and intimate connection between the sanctification of wealth and America’s economic and social relationships. The rich are a class apart because they are the elect.

Most present-day Americans, if they think about the historical roots of our wealth-worship at all, will say something about free markets, rugged individualism, and the Horatio Alger myth—all in a purely secular context. But perhaps the most notable 19th-century exponent of wealth as virtue and poverty as the mark of Cain was Russell Herman Conwell, a canny Baptist minister, founder of perhaps the first tabernacle large enough that it could later be called a megachurch, and author of the immensely famous “Acres of Diamonds” speech of 1890 that would make him a rich man. This is what he said:

I say that you ought to get rich, and it is your duty to get rich. … The men who get rich may be the most honest men you find in the community. Let me say here clearly … ninety-eight out of one hundred of the rich men of America are honest. That is why they are rich. That is why they are trusted with money. … I sympathize with the poor, but the number of poor who are to be sympathized with is very small. To sympathize with a man whom God has punished for his sins … is to do wrong … let us remember there is not a poor person in the United States who was not made poor by his own shortcomings.


Evidently Conwell was made of sterner stuff than the sob-sister moralizing in the Sermon on the Mount. Somewhat discordantly, though, Conwell had been drummed out of the military during the Civil War for deserting his post. For Conwell, as for the modern tax-avoiding expat billionaire, the dollar sign tends to trump Old Glory.

The conjoining of wealth, Christian morality, and the American way of life reached an apotheosis in Bruce Barton’s 1925 book The Man Nobody Knows. The son of a Congregationalist minister, Barton, who was an advertising executive, depicted Jesus as a successful salesman, publicist, and the very role model of the modern businessman.

But this peculiarly American creed took a severe hit after the crash of 1929, and wealth ceased to be equated with godliness. While the number of Wall Street suicides has been exaggerated in national memory, Jesse Livermore, perhaps the most famous of the Wall Street speculators, shot himself, and so did several others of his profession. There was then still a lingering old-fashioned sense of shame now generally absent from the über-rich. While many of the elites hated Franklin Roosevelt—consider the famous New Yorker cartoon wherein the rich socialite tells her companions, “Come along. We’re going to the Trans-Lux to hiss Roosevelt”—most had the wit to make a calculated bet that they would have to give a little of their wealth, power, and prestige to retain the rest, particularly with the collapsing parliamentary systems of contemporary Europe in mind. Even a bootlegging brigand like Joe Kennedy Sr. reconciled himself to the New Deal.

And so it lasted for a generation: the wealthy could get more wealth—fabulous fortunes were made in World War II; think of Henry J. Kaiser—but they were subject to a windfall-profits tax. And tycoons like Kaiser constructed the Hoover Dam and liberty ships rather than the synthetic CDOs that precipitated the latest economic collapse. In the 1950s, many Republicans pressed Eisenhower to lower the prevailing 91 percent top marginal income tax rate, but citing his concerns about the deficit, he refused. In view of our present $15 trillion gross national debt, Ike was right.

Characteristic of the era was the widely misquoted and misunderstood statement of General Motors CEO and Secretary of Defense Charles E. “Engine Charlie” Wilson, who said he believed “what was good for the country was good for General Motors, and vice versa.” He expressed, however clumsily, the view that the fates of corporations and the citizenry were conjoined. It is a view a world away from the present regime of downsizing, offshoring, profits without production, and financialization. The now-prevailing Milton Friedmanite economic dogma holds that a corporation that acts responsibly to the community is irresponsible. Yet somehow in the 1950s the country eked out higher average GDP growth rates than those we have experienced in the last dozen years.

After the 2008 collapse, the worst since the Great Depression, the rich, rather than having the modesty to temper their demands, this time have made the calculated bet that they are politically invulnerable—Wall Street moguls angrily and successfully rejected executive-compensation limits even for banks that had been bailed out by taxpayer funds. And what I saw in Congress after the 2008 crash confirms what economist Simon Johnson has said: that Wall Street, and behind it the commanding heights of power that control Wall Street, has seized the policy-making apparatus in Washington. Both parties are in thrall to what our great-grandparents would have called the Money Power. One party is furtive and hypocritical in its money chase; the other enthusiastically embraces it as the embodiment of the American Way. The Citizens United Supreme Court decision of two years ago would certainly elicit a response from the 19th-century populists similar to their 1892 Omaha platform. It called out the highest court, along with the rest of the political apparatus, as rotted by money.

We meet in the midst of a nation brought to the verge of moral, political, and material ruin. Corruption dominates the ballot-box, the Legislatures, the Congress, and touches even the ermine of the bench. The people are demoralized. … The newspapers are largely subsidized or muzzled, public opinion silenced, business prostrated, homes covered with mortgages, labor impoverished, and the land concentrating in the hands of capitalists. The urban workmen are denied the right to organize for self-protection, imported pauperized labor beats down their wages. … The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind, and the possessors of these, in turn, despise the Republic and endanger liberty. From the same prolific womb of governmental injustice we breed the two great classes—tramps and millionaires.

It is no coincidence that as the Supreme Court has been removing the last constraints on the legalized corruption of politicians, the American standard of living has been falling at the fastest rate in decades. According to the Federal Reserve Board’s report of June 2012, the median net worth of families plummeted almost 40 percent between 2007 and 2010. This is not only a decline when measured against our own past economic performance; it also represents a decline relative to other countries, a far cry from the post-World War II era, when the United States had by any measure the highest living standard in the world. A study by the Bertelsmann Foundation concluded that in measures of economic equality, social mobility, and poverty prevention, the United States ranks 27th out of the 31 advanced industrial nations belonging to the Organization for Economic Cooperation and Development. Thank God we are still ahead of Turkey, Chile, and Mexico!

This raises disturbing questions for those who call themselves conservatives. Almost all conservatives who care to vote congregate in the Republican Party. But Republican ideology celebrates outsourcing, globalization, and takeovers as the glorious fruits of capitalism’s “creative destruction.” As a former Republican congressional staff member, I saw for myself how GOP proponents of globalized vulture capitalism, such as Grover Norquist, Dick Armey, Phil Gramm, and Lawrence Kudlow, extolled the offshoring and financialization process as an unalloyed benefit. They were quick to denounce as socialism any attempt to mitigate its impact on society. Yet their ideology is nothing more than an upside-down utopianism, an absolutist twin of Marxism. If millions of people’s interests get damaged in the process of implementing their ideology, it is a necessary outcome of scientific laws of economics that must never be tampered with, just as Lenin believed that his version of materialist laws were final and inexorable.

If a morally acceptable American conservatism is ever to extricate itself from a pseudo-scientific inverted Marxist economic theory, it must grasp that order, tradition, and stability are not coterminous with an uncritical worship of the Almighty Dollar, nor with obeisance to the demands of the wealthy. Conservatives need to think about the world they want: do they really desire a social Darwinist dystopia?

The objective of the predatory super-rich and their political handmaidens is to discredit and destroy the traditional nation state and auction its resources to themselves. Those super-rich, in turn, aim to create a “tollbooth” economy, whereby more and more of our highways, bridges, libraries, parks, and beaches are possessed by private oligarchs who will extract a toll from the rest of us. Was this the vision of the Founders? Was this why they believed governments were instituted among men—that the very sinews of the state should be possessed by the wealthy in the same manner that kingdoms of the Old World were the personal property of the monarch?

Since the first ziggurats rose in ancient Babylonia, the so-called forces of order, stability, and tradition have feared a revolt from below. Beginning with Edmund Burke and Joseph de Maistre after the French Revolution, a whole genre of political writings—some classical liberal, some conservative, some reactionary—has propounded this theme. The title of Ortega y Gasset’s most famous work, The Revolt of the Masses, tells us something about the mental atmosphere of this literature.

But in globalized postmodern America, what if this whole vision about where order, stability, and a tolerable framework for governance come from, and who threatens those values, is inverted? What if Christopher Lasch came closer to the truth in The Revolt of the Elites, wherein he wrote, “In our time, the chief threat seems to come from those at the top of the social hierarchy, not the masses”? Lasch held that the elites—by which he meant not just the super-wealthy but also their managerial coat holders and professional apologists—were undermining the country’s promise as a constitutional republic with their prehensile greed, their asocial cultural values, and their absence of civic responsibility.

Lasch wrote that in 1995. Now, almost two decades later, the super-rich have achieved escape velocity from the gravitational pull of the very society they rule over. They have seceded from America.

Mike Lofgren served 16 years on the Republican staff of the House and Senate Budget Committees. He has just published The Party Is Over: How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted.


http://www.theamericanconservative.com/articles/revolt-of-the-rich/


 

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Zen Peach



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  posted on 8/28/2012 at 10:52 AM
Great read, and can't say I disagree with any oif it. Thanks Jerry.

 

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  posted on 8/28/2012 at 11:31 AM
Quite interesting and very close to what I have been preaching here for months. We live in a Gorden Gekko society. Greed is good!

[Edited on 8/28/2012 by sixty8]

 

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  posted on 8/28/2012 at 12:16 PM
I thought it was a Tom Tomorrow cartoon!

I want Sparky!


 

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  posted on 8/28/2012 at 02:24 PM
So how do we find a point of compromise? A point where both ends of the economic spectrum and most everyone in between feel like they are both not over-burdened with with a confiscatory and complcated tax system, and not paying so much that they seek offshore options to park or put their money to use? A point that doesn't discourage investment in productive activities here, but instead makes them more attractive? After all, if opportunity is going to develop so that most people can find a job, we have to reverse our declining manufacturing base somehow, which will only come from private investment.

 

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  posted on 8/28/2012 at 02:29 PM
Interesting. Makes you think. I agree with this article.

Even his title on his book, "He has just published The Party Is Over: How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted. "
says it all.

He is not cutting the Rep's or Dems of wealth, just saying they have moved on and away.

 

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  posted on 8/28/2012 at 03:23 PM
quote:
So how do we find a point of compromise? A point where both ends of the economic spectrum and most everyone in between feel like they are both not over-burdened with with a confiscatory and complcated tax system, and not paying so much that they seek offshore options to park or put their money to use? A point that doesn't discourage investment in productive activities here, but instead makes them more attractive? After all, if opportunity is going to develop so that most people can find a job, we have to reverse our declining manufacturing base somehow, which will only come from private investment.


How about giving the larger tax breaks to companies who create jobs here or bring jobs back here. Decent living wage paying jobs. More taxes for companies who outsource and less taxes for those who create or bring jobs back. You would think that would be incentive enough but they probably still make more profit with overseas cheap labor so who knows if that would even work.

 

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  posted on 8/28/2012 at 04:54 PM
quote:
quote:
So how do we find a point of compromise? A point where both ends of the economic spectrum and most everyone in between feel like they are both not over-burdened with with a confiscatory and complcated tax system, and not paying so much that they seek offshore options to park or put their money to use? A point that doesn't discourage investment in productive activities here, but instead makes them more attractive? After all, if opportunity is going to develop so that most people can find a job, we have to reverse our declining manufacturing base somehow, which will only come from private investment.

How about giving the larger tax breaks to companies who create jobs here or bring jobs back here. Decent living wage paying jobs. More taxes for companies who outsource and less taxes for those who create or bring jobs back. You would think that would be incentive enough but they probably still make more profit with overseas cheap labor so who knows if that would even work.

I think you're on the right track Pete, though an enforced 'living wage' would become such a political hot potato that we'd be just trading one set of class warfare tactics for another. I might also substitute trade policy via tariffs for business tax penalities. I think the following is a start...

-- All Federal taxes - income as well as SS & Medcare payroll deductions - get merged into a single flat tax on personal income. All forms of income are taxed at that same percentage, including capital gains, income from dividends, interest, etc. Govt spending consequences must be a concern of all citizens, and a flat percentage is the best way to achieve that. Further; a flat percentage would provide a simple measuring stick for new spending, so that when politicians propose a new program, all citizens will ask the same question: "what will that add to our income tax percentage?"

-- Business tax is zero. All forms of business tax are just rolled into the price of products anyway, which means they are ultimately hidden forms of income tax. Not having to comply with arcane business tax regulations will be a huge boost to entrepreneurism and new investment.

-- All corporate welfare is ended. Any subsidy, grant, loan, or "investment" that politicians want to make in a private company requires a 2/3rds vote of Congress.

-- Trade policy is used to apply a tariff on all incoming products. Starting low and ramping up over a few years, this, combined with a zero business tax incentive, will place pressure on US companies to bring production and jobs back home. It will also put pressure on companies that don't manufacture here to consider doing so.

-- Reinstate Glass-Steagall and split traditional banking from investment in the "too-big-to-fail" banks.

 

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  posted on 8/28/2012 at 05:38 PM
quote:
quote:
quote:
So how do we find a point of compromise? A point where both ends of the economic spectrum and most everyone in between feel like they are both not over-burdened with with a confiscatory and complcated tax system, and not paying so much that they seek offshore options to park or put their money to use? A point that doesn't discourage investment in productive activities here, but instead makes them more attractive? After all, if opportunity is going to develop so that most people can find a job, we have to reverse our declining manufacturing base somehow, which will only come from private investment.

How about giving the larger tax breaks to companies who create jobs here or bring jobs back here. Decent living wage paying jobs. More taxes for companies who outsource and less taxes for those who create or bring jobs back. You would think that would be incentive enough but they probably still make more profit with overseas cheap labor so who knows if that would even work.

I think you're on the right track Pete, though an enforced 'living wage' would become such a political hot potato that we'd be just trading one set of class warfare tactics for another. I might also substitute trade policy via tariffs for business tax penalities. I think the following is a start...

-- All Federal taxes - income as well as SS & Medcare payroll deductions - get merged into a single flat tax on personal income. All forms of income are taxed at that same percentage, including capital gains, income from dividends, interest, etc. Govt spending consequences must be a concern of all citizens, and a flat percentage is the best way to achieve that. Further; a flat percentage would provide a simple measuring stick for new spending, so that when politicians propose a new program, all citizens will ask the same question: "what will that add to our income tax percentage?"

-- Business tax is zero. All forms of business tax are just rolled into the price of products anyway, which means they are ultimately hidden forms of income tax. Not having to comply with arcane business tax regulations will be a huge boost to entrepreneurism and new investment.

-- All corporate welfare is ended. Any subsidy, grant, loan, or "investment" that politicians want to make in a private company requires a 2/3rds vote of Congress.

-- Trade policy is used to apply a tariff on all incoming products. Starting low and ramping up over a few years, this, combined with a zero business tax incentive, will place pressure on US companies to bring production and jobs back home. It will also put pressure on companies that don't manufacture here to consider doing so.

-- Reinstate Glass-Steagall and split traditional banking from investment in the "too-big-to-fail" banks.



You are obviously more educated on the details than I am Rich. I am coming from the common man's perspective and you are coming from an educated man's view which in turn can help educate those of us who don't understand the details. Your posts are always informative, even the ones I diagree with and the last post sounds good to me. How or if anyone will make those things happen is beyond me.

 

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  posted on 8/28/2012 at 09:23 PM
quote:
So....where are the cuts? Surely the military budget will need to be axed.


There are cuts everywhere. We survived 200 years without an Dept of Energy or a Dept of Education. How bout start there? Do we really need a Dept of Commerce or a Dept of Labor? If so, perhaps they could be merged, but I think we survive just fine without them. And the list goes on, and on....and on.

For many, the military is always the first place to cut. But this is the one function that 99% would agree the government is actually responsible for. Strange.




 

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  posted on 8/28/2012 at 09:43 PM
quote:
the American standard of living has been falling at the fastest rate in decades. According to the Federal Reserve Board’s report of June 2012, the median net worth of families plummeted almost 40 percent between 2007 and 2010.


Crazy stuff.

Great article, thanks for posting.

quote:
If a morally acceptable American conservatism is ever to extricate itself from a pseudo-scientific inverted Marxist economic theory, it must grasp that order, tradition, and stability are not coterminous with an uncritical worship of the Almighty Dollar, nor with obeisance to the demands of the wealthy. Conservatives need to think about the world they want: do they really desire a social Darwinist dystopia?




Yeah what he said. LOL

 

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  posted on 8/29/2012 at 06:13 AM
quote:
quote:
quote:
So how do we find a point of compromise? A point where both ends of the economic spectrum and most everyone in between feel like they are both not over-burdened with with a confiscatory and complcated tax system, and not paying so much that they seek offshore options to park or put their money to use? A point that doesn't discourage investment in productive activities here, but instead makes them more attractive? After all, if opportunity is going to develop so that most people can find a job, we have to reverse our declining manufacturing base somehow, which will only come from private investment.

How about giving the larger tax breaks to companies who create jobs here or bring jobs back here. Decent living wage paying jobs. More taxes for companies who outsource and less taxes for those who create or bring jobs back. You would think that would be incentive enough but they probably still make more profit with overseas cheap labor so who knows if that would even work.

I think you're on the right track Pete, though an enforced 'living wage' would become such a political hot potato that we'd be just trading one set of class warfare tactics for another. I might also substitute trade policy via tariffs for business tax penalities. I think the following is a start...

-- All Federal taxes - income as well as SS & Medcare payroll deductions - get merged into a single flat tax on personal income. All forms of income are taxed at that same percentage, including capital gains, income from dividends, interest, etc. Govt spending consequences must be a concern of all citizens, and a flat percentage is the best way to achieve that. Further; a flat percentage would provide a simple measuring stick for new spending, so that when politicians propose a new program, all citizens will ask the same question: "what will that add to our income tax percentage?"

-- Business tax is zero. All forms of business tax are just rolled into the price of products anyway, which means they are ultimately hidden forms of income tax. Not having to comply with arcane business tax regulations will be a huge boost to entrepreneurism and new investment.

-- All corporate welfare is ended. Any subsidy, grant, loan, or "investment" that politicians want to make in a private company requires a 2/3rds vote of Congress.

-- Trade policy is used to apply a tariff on all incoming products. Starting low and ramping up over a few years, this, combined with a zero business tax incentive, will place pressure on US companies to bring production and jobs back home. It will also put pressure on companies that don't manufacture here to consider doing so.

-- Reinstate Glass-Steagall and split traditional banking from investment in the "too-big-to-fail" banks.


My take on this article is that he's showing that there is no compromise. The super-rich won't be happy until they have unfettered access to accumulate more wealth. Two of the items you mention have no chance of passing, ending corporate welfare and reinstating Glass-Steagall. Hell, the super-rich are doing all they can to eviscerate Dodd-Frank and that has less restrictions than G-S.

From what I read, it's not that the tax laws are favored to the rich, it's that the super-rich feel entitled to have the laws in their favor. They see no benefit to society as a whole to bear a little more of the burden. Read what he says about Stephen Schwarzman. The man has no perspective outside his world. He is unable to see the larger picture. When all your whims are sated at a mere nod, I don't know if I would have perspective either.

Personally, I don't see an end to this. Electing a Republican president, eventually, will just grease the wheels for the super-rich to get what they want. Between frothing at the mouths Republicans and duplicitous Democrats it's inevitable.

It's the ending of Atlas Shrugged.

 

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Extreme Peach



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  posted on 8/29/2012 at 06:26 AM
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This raises disturbing questions for those who call themselves conservatives. Almost all conservatives who care to vote congregate in the Republican Party. But Republican ideology celebrates outsourcing, globalization, and takeovers as the glorious fruits of capitalism’s “creative destruction.” As a former Republican congressional staff member, I saw for myself how GOP proponents of globalized vulture capitalism, such as Grover Norquist, Dick Armey, Phil Gramm, and Lawrence Kudlow, extolled the offshoring and financialization process as an unalloyed benefit. They were quick to denounce as socialism any attempt to mitigate its impact on society. Yet their ideology is nothing more than an upside-down utopianism, an absolutist twin of Marxism. If millions of people’s interests get damaged in the process of implementing their ideology, it is a necessary outcome of scientific laws of economics that must never be tampered with, just as Lenin believed that his version of materialist laws were final and inexorable.



The above paragraph I think accurately captures the essence of the dysfunctional economics promoted by republicans today. Lofgren isn’t the first conservative to identify the catalysts that drove the rich to shift their wealth into forms of “paper capitalism” thereby sucking essential capital from the productive sphere. The Politics of Rich and Poor by Kevin Phillips in many ways goes over the same territory. But no one paid any attention when Phillips published his book in the early nineties.

It is interesting how quickly and adeptly the ideological gate keepers of republican politics such as Armey and Norquist rose to defend what are essentially archaic methods of wealth accumulation. To me it was this gradual movement away from investments in production that doomed America. Democrats and their supporters obviously benefitted as well but it was the conservatives who took on the roles of defending this movement by calling any force that threatened it "socialist."



 

Universal Peach



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  posted on 8/29/2012 at 09:38 AM
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So how do we find a point of compromise? A point where both ends of the economic spectrum and most everyone in between feel like they are both not over-burdened with with a confiscatory and complcated tax system, and not paying so much that they seek offshore options to park or put their money to use? A point that doesn't discourage investment in productive activities here, but instead makes them more attractive? After all, if opportunity is going to develop so that most people can find a job, we have to reverse our declining manufacturing base somehow, which will only come from private investment.


A good start would be both political parties being honest with the public about the need to completely scrap our current tax system, cut spending all across the board (including defense), raise taxes for everyone, and reforming SS and Medicaid/care....But neither side will do any of these things. So I guess we continue toward the fiscal abyss.

 

A Peach Supreme



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  posted on 8/29/2012 at 11:48 AM
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I think you're on the right track Pete, though an enforced 'living wage' would become such a political hot potato that we'd be just trading one set of class warfare tactics for another. I might also substitute trade policy via tariffs for business tax penalities. I think the following is a start...

-- All Federal taxes - income as well as SS & Medcare payroll deductions - get merged into a single flat tax on personal income. All forms of income are taxed at that same percentage, including capital gains, income from dividends, interest, etc. Govt spending consequences must be a concern of all citizens, and a flat percentage is the best way to achieve that. Further; a flat percentage would provide a simple measuring stick for new spending, so that when politicians propose a new program, all citizens will ask the same question: "what will that add to our income tax percentage?"

-- Business tax is zero. All forms of business tax are just rolled into the price of products anyway, which means they are ultimately hidden forms of income tax. Not having to comply with arcane business tax regulations will be a huge boost to entrepreneurism and new investment.

-- All corporate welfare is ended. Any subsidy, grant, loan, or "investment" that politicians want to make in a private company requires a 2/3rds vote of Congress.

-- Trade policy is used to apply a tariff on all incoming products. Starting low and ramping up over a few years, this, combined with a zero business tax incentive, will place pressure on US companies to bring production and jobs back home. It will also put pressure on companies that don't manufacture here to consider doing so.

-- Reinstate Glass-Steagall and split traditional banking from investment in the "too-big-to-fail" banks.


A great start. There should also be no political contributions by anyone allowed to any party whether personal or corporate. There should be a government sponsored budget for each party that is capped at say $1mm and that's it. The money you would save and the lobbying that would disappear would be mind boggling. The money that is spent on the conventions alone is crazy!!

 

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Zen Peach



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  posted on 8/29/2012 at 12:04 PM
So many good ideas presented here. Maybe our system isn't really broken, we just need some new representation.

 

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Zen Peach



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  posted on 8/29/2012 at 12:06 PM
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So many good ideas presented here. Maybe our system isn't really broken, we just need some new representation.


'We' better get to them before 'they' do.

 

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Extreme Peach



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  posted on 8/29/2012 at 12:08 PM
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A great start. There should also be no political contributions by anyone allowed to any party whether personal or corporate. There should be a government sponsored budget for each party that is capped at say $1mm and that's it. The money you would save and the lobbying that would disappear would be mind boggling. The money that is spent on the conventions alone is crazy!!


This point would kick a lot of butt in that it would create an even playing field.

 

Universal Peach



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  posted on 8/29/2012 at 01:05 PM
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quote:
A great start. There should also be no political contributions by anyone allowed to any party whether personal or corporate. There should be a government sponsored budget for each party that is capped at say $1mm and that's it. The money you would save and the lobbying that would disappear would be mind boggling. The money that is spent on the conventions alone is crazy!!


This point would kick a lot of butt in that it would create an even playing field.


Agreed....I would also add term limits for Congress and some sort of mechanism to end gerrymandering too.

 

Ultimate Peach



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  posted on 8/29/2012 at 01:12 PM
quote:
quote:
A great start. There should also be no political contributions by anyone allowed to any party whether personal or corporate. There should be a government sponsored budget for each party that is capped at say $1mm and that's it. The money you would save and the lobbying that would disappear would be mind boggling. The money that is spent on the conventions alone is crazy!!


This point would kick a lot of butt in that it would create an even playing field.


I believe the gov't provides big $$ to each party for the conventions.

I agree with your point. I'm not so sure the Supreme Court justices who approved the Citizens United decision would agree - truly an activist decision.

 
 


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