Monday, February 02, 2009

New Year Revolutions

Ted Rall IMO, is a modest - at best - cartoonist. But as a political observer, he gets very high marks from me. I have been sitting on his column, Only One Solution: Soak the Rich and Corporations, for many days - wondering why I couldn't have written something half as good as he has. But, rather than trying to re-invent his wheels, I've decided to just give them my spin.

Here's what Rall says:
A moratorium on housing foreclosures and evictions is a good idea. So is making the tax code more progressive. . . . .the rapidly metastasizing disease that threatens to kill the U.S. economy [is] income inequality.

. . . . . Tax returns give only a partial picture of a nation whose riches have been aggregated in the hands of a tiny elite. The Internal Revenue Service captures only about 70 percent of business and investment income....
That means the other 30% goes unreported.
So actual income inequality is bigger than IRS data indicates . . . .The wealthiest one percent of Americans earned 21.2 percent of all income in 2005.

. . . . . What if we played Karl Marx and left that one percent of the population (people who earn over $350,000 a year) with their fair share--one percent of national income? If we divided the rest of the loot equally, everyone else--99 percent--would get a 20.2 percent pay raise . . . .

Due to wage inequality, the average worker earns 40 percent more than the median. Close the gap, and two-thirds of Americans get a raise. One-third gets a cut. But only a small group, the top five or ten percent, would feel significantly pinched. Most of the third wouldn't lose much. And everyone would benefit from the increased economic activity that would result from equal income distribution . . . . . Call it trickle-up economics.
The under examined myth in this country of ours is that salary is the biggest motivation for creative people. It's especially unexamined by the Reich wing because for the richest of the rich, satisfaction of greed is purpose for life.
After-tax 2007 profits for U.S. corporations totaled $1.8 trillion, up 10 percent since 2001. (Bear in mind: this figure doesn't include CEO salaries, capital reinvestments, and the acquisition price of other corporations.) The effective average corporate tax rate in the U.S. is about 13 percent--one of the lowest in the industrialized world. If we were to double the effective tax rate to 26 percent, the U.S. would remain a tax haven compared to Germany and other major European countries.

Let's say the IRS took that extra 13 percent corporate profits tax and cut a check to the American people. Why not? Without us, the U.S. consumer, these companies wouldn't be in business. In 2007, every worker in the U.S. would have gotten a check for $12,000. That's a lot of xBoxes, not to mention mortgage payments.
Ted's right.

It's as old as the hills and Henry Ford. Remember, Ford was the tycoon who wanted to ensure labor would make enough salary in order to be consumers. What free enterprise really needs is a market. Markets need disposable incomes. It's not the prospect of tax breaks that spurs investment, it's the prospect that good and services will be purchased when and if they are produced. It's not saving the greedy billionaires from their just taxes. It's the palpable prospect of buyers, consumers and customers that motivate entrepreneurs to create and build businesses. Tax breaks for the wealthy is the wrong way to go. Dead wrong.

Where am I wrong on this?

9 Moderated Comments:

Blogger Beach Bum said...

You and Ted are not wrong on this, except that whenever the word "socialism", which many would call this proposition, is mentioned in the general American population a reaction surely programmed in the part of the brain we got from reptiles engages.

I can't tell you how many times I have heard the various rightwing-nuts I work around complain about how their paychecks are not keeping up with the cost of living. These same people also are fully aware of how upper management types are making out with large salaries and planetary sized bonuses. But yet to a man they whine about the socialism President Obama may "inflict" on the country.

The only way I come close to understanding how they come to their positions is the attitude they equally share that no matter what they do the system is stacked against them with the rich winning no matter what. The recent spat of Obama nominees with tax issues and how these issues are being excused don't help matters.

2/03/2009 12:48:00 PM  
Blogger Utah Savage said...

Well you guys have pretty much covered it for me. I have nothing to add but this. We are a nation of idiots. We do not vote our own interests. And religion is a big part of the problem not addressed here. So in a way this ties in with Beach's comment that our brains are operating at the most primitive level. Not really thinking at all. Isn't that the amygdala? We are scared of the boogie man of Socialism because we're true believers in the great god capitalism. We dream of riches. This dream is crammed down our throats in the form of advertising and entertainment. If you talk about the collective good, someone will say, "Ooh, collective isn't that communism?" Brainwashed and stupid. Think I'm too hard on us?

I rooting for your side. I want us to be smarter. But boy has right wing fundamentalism made us stupid.

2/03/2009 05:17:00 PM  
Blogger adynaton said...

Americans like declaring wars on things, right? War on drugs, obesity, etc. How about a war against billionaires? It's very close to declaring a war on poverty.

2/04/2009 10:04:00 AM  
Blogger MadMike said...

I agree with you Vigil, and Ted of course. this will never happen in America because America is controlled by the fat cats. They are everywhere, in our government, our business, our corporations and industry. While their hold is slipping as a result of the recent election there is still a long way to go before normal people get to take America back.

As to Socialism what the hell! The Republican way hasn't worked has it? I have long thought we need to own the money lenders. Our failure to be able to regulate the slippery slime has resulted in the crisis we now face.

By the way, while we are at it we should relegate religion to the back row. As I write this I am hearing Obama speaking about God along with Tony Blair, who should apply for U.S. citizenship given the amount of time he spends in the United States.

2/05/2009 06:05:00 AM  
Blogger the WIZARD, fkap said...

Hello Vigilante and company,

Glad to see you continue to make me think and ponder these issues!

Sadly I must rather profoundly disagree with Rall's post and premise and your additional comments. I'm not sure where to even begin..... And I haven't enough time or space to really launch into the detailed discussion this topic demands. Let me just make two small points:

1. Capitalism is merely a system to distribute goods and services, workforce and raw materials in an extremely liquid and rapid manner. One reason it works so much better than state planning (i.e. communism) is it is so damned quick and specific. This is why even communist China has rebuilt their entire economy around capitalist operating principles. Capitalism itself isn't the problem. Abuse (both coporate and governmental) is where things get really evil. This is true whether it's the CEO of Citibank lining his wallet or Tom Daschel accepting over 5 million form drug companies since leaving office.

Having good laws and tough regulators is what we need and what we missed during George Bush's administration.

2. The very wealthy aren't generally CEO's of companies and (much more importanly) most CEO's run their businesses with great care, honesty and with their employee's best interests at heart.

In fact small businesses are over 90% of all corporations, employing an average of 9 employees and the owner/CEO making under $150,000.00 a year, often a lot less.

Who are the wealthy? Well movie stars, top recording artists, and sports stars make up a huge portion. And people who own or operate these business make up another huge chunk. I've often noted folks who are quick to condemn nameless, faceless CEO's are equally quick to demand the local professional sports team pony up the really big bucks for a top tier quarterback or outfielder. And we still fill stadiums for every game, even at today's hugely inflated ticket prices. That is capitalism.

Another huge group of the top 1% are lawyers and doctors and similar professional people. While super millionaires like John Edwards and other trail lawyers are an easy target for ridicule, most people want a top notch doctor when they need help.

I could go on.... I do appreciate this morning's wake up call. Thanks!

2/05/2009 11:45:00 AM  
Blogger the WIZARD, fkap said...

Lee posted earlier today over on his blog:

Sometime around the year 1929, my Grandpa had a pretty good payday. He worked as a plumber during this time. He and his wife talked about what to do with the money. My Grandmother had a feeling and told Grandpa to go pay off the note on the house. This was days before the wall street crash, and banks calling all notes due. Which is a fancy way of saying, any loans you had the bank wanted re payed NOW!

As the great depression moved across the land my Grandpa found that his various handyman skills was a commodity. He could fix the pumps that the Farmer needed to water his livestock, the farmer just couldn't pay in money. So Grandpa would get some chickens or eggs for the next few months in lieu of payment.


Capitalism at it's purest form.

2/05/2009 04:51:00 PM  
Blogger Vigilante said...

Adynaton, that is as fine bumpersticker slogan as I have seen.!

2/06/2009 09:17:00 PM  
Blogger Vigilante said...

Wizard, I am not arguing for "state planning (i.e. communism)". I am arguing for a progressive income tax and for a state-funded rebuilding of our infrastructure. We need to grow our middle class. Full(er) employment provides a sustainable market in which free enterprise can flourish. Not complicated. But if Congress dilly-dallies and appeases the Party of Greed, this country will not be able to save itself. We are indeed on the edge of a precipice. As Ted Rall says in a companion piece,

With the economic distress we're likely to see in the coming year or two or three, revolution will become increasingly likely unless money starts coursing through the nation's economic veins, and soon. Will it be a soft revolution of government-mandated wealth distribution through radical changes in the tax structure and the construction of a European-style safety net, as master reformer FDR presided over when he saved capitalism from itself? Or will the coming revolution be something harder and bloodier, like the socioeconomic collapse that destroyed Russia after the fall of the Soviet Union? To a great extent, what happens next will depend on how Barack Obama proceeds in his first weeks as president.

The Republicans always want their godamned tax breaks because they hate 'government'. They will bring us down. All of us. With their dogma. The only thing that can save us is investing massively in our infrastructure. Not Iraq's. Not Afghanistan's. Ours.

2/06/2009 09:20:00 PM  
Blogger Stella said...

Wait a minute: if the predominantly, high-ranking conservative financial community are so anti-socialism, why did they scramble for the government bailouts?

Don't I have a say in where my taxes go? I agree with Wizard when he writes Having good laws and tough regulators is what we need and what we missed during George Bush's administration. We had them: Boxer, Waxman, Feingold, Kucinich... no one was listening to them.

While Wizard makes a good point about the top 1%, I say it's one more reason for a graduated tax that those in the highest bracket pay the highest percentage.

Supply-side economics doesn't work. We've had 30 years of proof.

2/07/2009 02:50:00 AM  

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