At a time
when 18-25% of America’s working people—40% of our youth—are un- or
under-employed, they call for sacrifice and talk about the need to make “hard
choices” to help the nation and the world recover from the devastation they
themselves have wrought upon our economy with their own dishonest,
irresponsible, and profligate mismanagement.
Any
attempt to make them share the sacrifice, to make the 1% pay their fair share
of the burden, is referred to as “class warfare”. This, mind you, from
the very thieves who have destroyed the tremendous gains for the general
welfare of the People achieved by the programs which lifted the U.S.A. and the
world out of the Great Depression.
With the
Republic of France’s President Nicolas Sarkozy at her side, Reich Chancellor
Angela Merkel and her plutocratic allies jammed down the throats of the
overwhelming majority of European Union nations a pledge of balanced budgets,
consequences be damned. They are visiting upon their own people the same
cruelty which the victors in the First World War inflicted upon the Central
Powers, Germany in particular, over reparations for a war all parties had equal
culpability in, and by creditors over wartime debts.
Screw the
people; in money we trust. The financial oligarchy must never be without
its daily bread, even if the people are relatively starving. Let them eat
cake.
The New Deal and the
Golden Age of Capitalism
The period
from the end of the Second World War in 1945 through the abandonment of the
Bretton Woods system of monetary management (established by the “Allies” at the
United Nations Monetary and Financial Conference in 1944) is known to
economists and historians alike as the Golden Age of Capitalism. They
gave it that moniker because of the nearly unparalleled expansion of the
economies of the nations of the West, and certain other countries, and the
uplifting of the general welfare of their citizens as a whole.
Here’s
what those political and pundit figures who advocate going back to this Golden
Age don’t tell you: during the majority of this period, 1946-1964, the
income tax rate for the wealthiest Americans was 91%, with the threshold for
that rate being $200,000. The rate for the lowest bracket was 20%.
President Johnson’s Revenue Act of 1964 changed those highest and lowest rates
to 70% and 14% respectively, and raised the threshold for the top rate to
$400,000. As for the estate tax which Republicans fondly refer to as the
“death tax”, during this period of prosperity, once an estate surpassed the
$60,000 a tax rate of 77% kicked in.
Union
membership in America during this Golden Age was the highest it has ever been,
with over one-third of all non-farm workers organized. The farm workers
themselves began to organize in 1962 and joined in a nationwide federation in
1966. Executive salaries were a mere 12-20 times higher than that of the
average worker.
The
foundation of all this wealth and prosperity was the New Deal.
Prior to
1913, the American government’s chief source of income was booze. Not its
manufacture and sale, but excise taxes upon those activities. By the late
19th century, the yearly average intake of alcoholic beverages
(beer, wine, liquor) for Americans had grown to 86 bottles per person. By
contrast, the current alcohol intake rate (2011) is a 14 bottles per
person. Due in large part to America’s saloon culture, alcohol was
America’s fifth largest industry.
To provide
a larger and more reliable source of revenue for the federal government,
Congress and the states passed the 16th Amendment to the
Constitution and subsequently to the U.S. Code allowing the taxing of
income. The initial rates were 1% for the lowest bracket ($1000 and
above), with an additional 6% (total 7%) after a threshold of $500,000. By the
end of the Great War (First World War), however, these rates had risen to 16%
and 77% respectively, though with the upper threshold rising to $1,000,000.
At the end
of that war came the First Red Scare, which strengthened the counterattack of
the right wing advocates of plutocracy, fueled the growing “hooded
Americanism”, and secured the demise of the remnants of the Progressive Era of
Theodore Roosevelt, William Howard Taft, and Woodrow Wilson.
The 18th Amendment
to the Constitution took effect in January 1920 and Prohibition began the
Roaring Twenties in which many of the Lost Generation fled to Europe.
Politically, so-called progressivism died before the onslaught of William G.
Harding, Calvin Coolidge, and Herbert Hoover, along with Andrew Mellon.
Hoover,
Secretary of Commerce to both Harding and Coolidge before he became President,
dominated the decade more than any other person and is chiefly responsible for
all of its excesses and failures, including the Great Depression. Hoover
was a strong advocate of what he called trickle-down economics, the idea that
enriching the rich even more richly would create an abundance that would
inevitably “trickle down” to the lower social classes.
Ronald
Reagan’s budget director David Stockman rechristened Hoover’s ideas as “supply
side economics”, but pinned down in an interview admitted the two were
identical. During the 1980 Republican presidential primary campaign,
later Vice President George H.W. Bush correctly characterized the doctrines as
“voodoo economics”.
Critics of
Hoover and Co. during the Roaring Twenties called their ideas and policies
nothing more than a retread of the Gay Nineties horse-and-sparrow theory then
in vogue among the robber barons and their supporters, which, in fact, it
was. Even more unkindly than by Marie Antoinette Bourbon, this theory
stated that, “if you feed the horse enough oats, some will pass through to the
road for the sparrows” (John Kenneth Galbraith). In other words, the
non-superwealthy should eat their horse dung with a smile and be grateful for
it.
The
response of William Jennings Bryan, three-time Democratic presidential
candidate and Wilson’s Secretary of State, to this soulless excuse for an ideology
of avarice with such abysmal lack of conscience was: “There are those who
believe that if you will only legislate to make the well-to-do prosperous,
their prosperity will leak through on those below. The Democratic idea,
however, has been that if you legislate to make the masses prosperous, their
prosperity will find its way up through every class which rests up on them.”
Hoover’s
other major ideal was “associationalism”, the idea that, in spite of a mountain
range of evidence to the contrary, voluntary organizations are best for
citizens taking care of each other and for caring for the less fortunate
members of society. Reagan rehashed it as “volunteerism”, while the PR propaganda
of Bill Clinton, John Major, and Tony Blair spun this as “public-private
partnership”.
As
Secretary of Commerce, Hoover was master of all things economic and had his
hands in every federal department and nearly every sector of the American
economy. Before he accepted appointment from either, Hoover demanded this
authority from both Harding and from Coolidge. His right hand, a power in
his own right with ideas that paralleled Hoover’s, was Andrew Mellon, a banker
and industrialist who served as Secretary of the Treasury for Harding,
Coolidge, and Hoover himself.
Mellon’s
chief goal was to slash taxes, which he did for both those in the wealthiest
bracket and those in the lowest. He reduced the top rate from 73% to
58% in 1922, to 50% in 1923, to 46% in 1924, 25% in 1925, and finally to 24% in
1929. Meanwhile, the rate for the lowest bracket fell from 4% to 0.5%;
however, other changes led to the tax burden on the wealthy not only decreasing
but trickling, or rather flooding, down to the less well-off.
After the
stock market crashed in October 1929, Hoover continued to spout his theories of
low taxes, trickle-down economics, and a laissez-faire market-place up to the
day he was replaced by Franklin Delano Roosevelt. Secretary of the
Treasury Mellon was about to be impeached in 1932 and only escaped by accepting
his patron’s offer of the ambassadorship to the Court of St. James. The
same Congressmen later sought to impeach Hoover, but saw no need when he was
defeated at the polls so ignomiously.
Just to
show how the more things change the more they stay the same, among Hoover’s
responses to the Great Depression, by the way, was the forced expulsion of some
half a million (500,000) Mexican and Mexican-Americans to the Republic of
Mexico.
Before
Roosevelt had even been elected, Congress passed the Revenue Act of 1932, which
raised the bottom rate from 0.5% to 4% and the top rate to 63%. Before
the beginning of the Second World War, the top rate had risen to 79%.
The New
Deal of FDR (in office 1933-1945) saved not only the American economy but that
of the world, and very probably the Republic itself. With his leadership,
the nation’s of the world began the systems of both temporary relief programs
and permanent social welfare agencies along with regulatory agencies that
helped bring about the Golden Age of Capitalism.
Some of
the temporary relief was provided by programs such as: National Recovery Administration (coordinator
for the whole system), Federal Emergency Resettlement Agency, Works
Progress Administration (infrastructure jobs), Civilian Conservation
Corps (parks and rural areas), Public Works Administration (infrastructure),
Farm Service Agency (for tenant farmers), and National Youth
Administration. These were phased out
soon after America’s entry into the Second World War if not before.
The more
long-standing New Deal agencies and programs include: Federal Deposit Insurance
Corporation (FDIC), Federal Savings and Loan Corporation (FSLIC; wiped
out by the S&L crisis in the 1980’s), Federal Crop Insurance
Corporation, Tennessee Valley Authority (TVA), Federal Housing Administration
(FHA), Social Security Administration (SSA), Securities and Exchange Commission
(SEC), Rural Utilities Service (formerly Rural Electrification
Administration), Farm Security Administration, Food Stamp Program, Aid to
Families with Dependent Children (AFDC), Unemployment Insurance program
In
addition, several pieces of legislation were passed that significantly
contributed toward the welfare and quality of life for the average
American.
Prohibition
was repealed as soon as FDR could manage.
The Wagner
National Labor Relations Act of 1934 supported formation of labor unions,
collective bargaining, and the right to strike, while amendments in 1934 and
1936 to the Railway Labor Act of 1925 did the same for railroad and airline
employees.
The Indian
Reorganization Act of 1934 provided a means to tribal governments dissolved
under the Dawes Act to reorganize.
The Fair
Labor Standards Act of 1938 mandated a national minimum wage, an 8-hour
workday, overtime pay for work beyond that, and outlawed child labor.
The G.I.
Bill of 1944 and federal support for higher educational institutions enabled
millions of people who would not otherwise have been able to do so to obtain a
college or university education.
This is
the big, bad New Deal over which Republicans, Libertarians, Tea Partiers, and
Blue Dog Democrats are constantly wringing their hands. Though many of
its features are included in the programs of what many socialists advocate,
they were all in fact enacted for the rescue and maintenance of the capitalist economic
system.
Harry
Truman’s (1945-1953) Fair Deal continued and enhanced nearly all the New Deal
programs and created the Civil Rights Commission. He also tried to pass
through Congress legislation for universal health care like that in every other
country in what was then called the Free World, but lost in the right-wing
backlash accompanying the Second Red Scare of the late 1940’s and 1950’s.
The
captains of industry and their Congressional allies also got their revenge with
the Taft-Hartley Labor-Management Relations Act of 1947. It was this
legislation which not only authorized but encouraged right-to-work laws such as
that which was passed almost immediately in Tennessee and very recently in
Indiana. It also prohibited jurisdictional strikes, wildcat strikes,
solidarity strikes, political strikes, secondary boycotts, mass picketing,
closed shops, and monetary donations to federal campaigns, as well as
restricted union shops. Furthermore, it authorized the feds to enact
strike-breaking in the name of “national security” along with forbidding
communists and socialists, who had been some of labor’s most effective
organizers, from joining unions.
Dwight D.
Eisenhower (1953-1961) continued the New Deal and Fair Deal programs unchanged,
and also began building the Interstate Highway System.
Adding to
the above, John Fitzgerald Kennedy’s administration (1961-1963) New Frontier
created the Department of Housing and Urban Affairs, the Peace Corps, and the
Appalachian Regional Commission (ARC), the latter serving primarily the
Southern Appalachians but also the whole region.
The
biggest additions to the social support apparatus came with Lyndon Baines
Johnson’s (1963-1969) Great Society. Among his most important actions
were the passing of the Civil Rights Act of 1964 and the Voting Rights Act of
1965. His administration also created the Volunteers in Service to
America (VISTA) program, Job Corps, Head Start, Community Action Program, Medicare,
Medicaid, National Endowment for the Arts (NEA), National Endowment for the
Humanities (NEH), Corporation for Public Broadcasting (CPB), National Public
Radio (NPR), Public Broadcasting System (PBS), and Equal Employment Opportunity
Commission (EEOC).
Unfortunately,
LBJ also pushed through the Revenue Act of 1964 just as he was beginning these
new programs and at the same time the surge in Viet Nam. Inexplicably, at
a time when even more than ever was being spent, the tax rate for the lowest
bracket was cut to 14% from 16% and slashed from 91% to 70% for the top
bracket, with the threshold doubled to $400,000. This proved to be the
first step on the way to the stagflation which choked the American economy, and
the world, in the 1970’s.
Even
Richard Nixon (1969-1974) added to the programs benefitting the many rather
than just the few. His New Federalism created both the Occupational
Safety and Health Administration (OSHA) and the Environmental Protection Agency
(EPA). He also took the United States unilaterally off the Bretton Woods
monetary control system, of which the only remaining vestige is the
International Monetary Fund (IMF). In reaction to the sudden spiraling
upward of prices resulting from the latter, Nixon instituted price controls
initially intended to last just 90 days but eventually lasting nearly three
years.
The Evil Empire Strikes
Back
In the
Seventies, the Counterculture Revolution became the Me Decade. Love-ins,
protest marches, sit-ins, rap sessions, coffee houses, pot, and LSD gave way to
mood rings, pet rocks, being “dazed and confused”, cocaine, disco, yoga,
swinging, and leisure suits. Feminism
became about more and better orgasms rather than about equality. Civil
rights gave way to Blaxploitation. The Gay Liberation Movement gave way
to bath-houses. The New Left had nothing left.
On TV we watched
Soul Train, Hee Haw, Sonny and Cher, Toni Orlando and Dawn, The Brady Bunch,
Happy Days, and M*A*S*H.
Meanwhile,
Marcos declared martial law in the Philippines, Pinochet carried out a coup
against Allende in Chile, American military involvement Viet Nam ceased, the
Yom Kippur War brought the gas crisis of 1973, urban terror by the Red
Army Faction and Red Brigades in Europe and by the Symbionese Liberation Army
in America sped us up, the ’73-’75 recession slowed us down, we saw the helicopter
evacuation of the American embassy in Saigon, the Watergate hearings ruined a
whole summer of TV for me and other kids, the Rocky Horror Picture Show became
a cult, we listened to Southern Rock, the U.S. had its bicentennial, we read
about the Khmer Rouge killing fields, President Carter and his national
security guy Brzezinski thought it would be a good idea to poke the Soviets in
Afghanistan so they helped organize the mujahedin, Star Wars changed movies
forever, Lynyrd Skynyrd crashed, the people of Iran overthrew the Shah then
found themselves subject to an even greater tyranny, the Hostage Crisis began,
Solidarity organized the Polish workers in Gdansk for their rights first as
workers and then as citizens, John Lennon was shot by a psychopath, and The
Empire Strikes Back came out.
Then the
Empire struck back for real. The Baby Boomers became yuppies, Reaganauts,
and neoconservatives, peddling recycled excrement dressed up in a pathetic
attempt at repackaging. The same message with a new vocabulary.
This time they called it neoliberalism and/or the “Washington Concensus”,
and every president since Reagan, including Clinton and Obama with Bush I and
Bush II, has followed the same path.
The Fed
raised interest rates on borrowing to 17-18% trying to cure stagflation, which
resulted in the housing crash of 1978-1981 bringing with it 22.5 % unemployment
among those in the construction trades.
The Hunt
brothers tried to secretly corner the silver trade and crashed the stock market
on 27 March 1980.
Congress passed
the Depository Institutions Deregulation and Monetary Control Act in 1980 which
forced all banks to obey the Federal Reserve; allowed banks to merge; removed
power of the Fed’s board of directors to set savings interest rates; allowed
banks to set own interest rates; and allowed credit unions and S and L’s to
offer cheques and other banking services but without regulatory safeguards.
America
slipped into recession from January 1980 through January 1983.
In the
midst of this recession, Reagan pushed through Congress the Economic Recovery
Tax Act of 1981, which lowered the top tax rate from 70% to 50% AND lowered the
threshold for that top bracket to $106,000.
He also
destroyed our nation’s air traffic safety when he strutted his stuff and fired
all the controllers who went out on strike with PATCO in 1981.
Commodities
underwent a pricing crunch beginning in 1982 that lasted until 1998.
The
Kuwaiti stock market crashed in 1982.
Also in
1982, Congress passed the Depository Institutions Act, which deregulated credit
unions and savings and loan banks (S and L’s). It also created the
adjustable rate mortgage, which would prove so helpful to the overall health of
the economy in the 2000’s.
From 1982
through 1988, there was a boom in the real estate market. During the same
period, perhaps coincidentally or perhaps not, predatory capitalism which does
no one any good had a field day with leveraged buyouts (LBO). In an LBO,
a larger company obtains a controlling interest in a smaller one, uses the assets
of the smaller company to finance the loans it used to buy it, and most often
sells off anything left over after the loan defaults.
In 1986,
Congress at Reagan’s behest passed the Tax Reform Act which lowered the rate
for the top bracket from 50% to 38.5% and RAISED the rate for the lowest
bracket from 11% to 15%. It also lowered the threshold for the top
bracket to $90,000.
Thanks to
the deregulation of 1980 and 1982 and mismanagement by its executives, the
savings and loan industry underwent a crisis from 1986 to 1991 that nearly
destroyed it completely. Half of all S and L’s bankrupted, and the FSLIC
collapsed completely; its function are now performed by a fund within the FDIC.
On Black
Monday, 19 October 1987, the stock market crashed in spectacular fashion while
being broadcast over Voice of America, National Public Radio, and other outlets
due to market panic, program trading, illiquidity, and overvaluation.
The
booming real estate market crashed in 1988 and remained on life-support until
1995.
Reagan’s
last gift to his friends was to lower the tax rate for the top bracket from
38.5% to 28% and also to lower the threshold from $90,000 to $29,750.
In 1989
the stock market crashed on Friday 13th in October due to the
failure of the United Airlines buyout.
Also in
1989, Congress passed the Financial Institutions Reform, Recovery, and
Enforcement Act which did, in fact, make some actual reforms, but also allowed
bank holding companies to acquire thrift institutions such as savings banks and
savings and loan associations, taking a few more bricks out of the wall erected
by Glass-Steagall.
Not
surprisingly, the USA had a recession in 1990 and 1991.
In 1993,
the Omnibus Budget Reconciliation Act of 1993 raised the tax rate for the top
bracket to 39.6%.
Michael
Doonesbury and other get-rich-quick entrepreneurs went boom on the World Wide
Web dot com from 1995 to the beginning of the new millennium.
In 1996,
Congress passed the Clinton administration-sponsored Personal Responsibility
and Work Opportunity Act which placed a lifetime limit on welfare benefits,
devolved responsibility for welfare to the states, and instituted a
workfare-for-welfare program requirement.
The 1997
Asian financial crisis helped bring on the 27 October crash that year.
Also in
1997, the Clinton administration enacted a change in welfare from Aid to
Families with Dependent Children (AFDC) to Temporary Relief for Needy Families
(TANF) on the basis of "workfare for welfare" that penalized those
unable to work and limited total lifetime benefits to 60 months.
Prices on
commodities started climbing steadily in 2000, helping bring on a recession
that lasted two years.
President
George W. Bush and the Republicans passed the Economic Growth and Tax Relief
Reconciliation Act of 2001 which significantly reduced the capital gains tax by
15% and the estate tax by 10%.
A few
months later, the U.S. invaded Afghanistan.
Between
2002 and mid-2007, there were booms in the housing market, in leveraged
buyouts, in collateralized debt obligations, and in debt repackaging.
After
invading Iraq in 2003 so that the country was now fighting two wars at the same
time, Bush and the Republicans passed the Jobs and Growth Tax Relief
Reconciliation Act which reduced revenue by cutting the top tax rate from 39.6%
to 35% and raised the top threshold to $311,950.
As if
consumers were not getting screwed enough by the credit industry, Bush and the
Republicans, with surprising support from a number of Democrats, passed the
Bankruptcy
Abuse
Prevention and Consumer Protection Act in 2005. Drafted in 1997 while
Bill Clinton was in office, the legislation severely restricted the relief
consumers can get from debt should their circumstances or that of the general
economy change.
Due to the
“China Correction”, stock markets world-wide crashed in February 2007.
The subprime mortgage market in the U.S. fell not long afterward and the Great
Recession began. It hasn’t ended yet, regardless of what Washinton
bureaucrats and other economists say.
Meanwhile,
irresponsible speculation on food and fuel futures sent food prices and fuel
prices both spiraling upward.
With the
credit industry, including some of the largest banks in the world and insurance
companies too, on the verge of collapse, Congress authorizes and President Bush
authorized the Troubled Asset Relief Program (TARP) in 2008. Eventually
totaling four hundred seventy-five BILLION dollars ($475,000,000,000), the
program called for the American taxpayers to rescue the financial bourgeoisie
from the results of their own myopic greed and avaricious dishonesty.
While the
public raged over TARP, future 2009 TIME Person of the Year
Ben Bernanke and the Federal Reserve board of directors SECRETLY loaned American and
foreign banks and financial institutions what respected finance magazine Bloomberg
Businessweek totals as seven-point-seven TRILLION dollars
($7,700,000,000,000). Other sources investigating further gave the figure
twenty-nine TRILLION ($29,000,000,000,000).
Presidents
Bush and Obama and Congress bailed out the troubled American automotive
industry (Chrysler, General Motors, Ford), which kept manufacturing suburban
assault vehicles long after those became highly impractical, with the total
coming to $130 billion.
President
Barak Obama and Congress passed the American Recovery and Reinvestment Act
(ARRA) in 2009 for $787,000,000,000.
The stock
market has crashed at least three times in the past couple of years, several
days in a row this past August (2011), in fact.
Up to the Past, and
Beyond
For
thirteen of the past thirty-one years we have been in severe recession.
In real terms rather than the rosy forecasts from government offices, 18-25% of
America’s working people are unemployed or underemployed either in type of work
according to their abilities or in hours, and for our youth, that rate climbs
to 40%.
Soon, we
in America will find ourselves in the same position relatively speaking, to
that of our ancestors in the Gilded Age, the Belle Epoque in Europe, when the
robber barons were masters of the universe, the golden age for Herbert Hoover
and his cronies.
According
to Edward Bellamy, author of Looking Backward: 2000-1887 and
president of the Nationalist Clubs, at the apex of the Gilded Age 31,000 men
held half the wealth of the nation’s 65,000,000 persons, 9% of the U.S.
population owned 71% of the wealth of the country, leaving 29% to the remaining
91% of the population; and 4,074 persons or families owned one-fifth of the
total wealth of the country, nearly as much as that bottom 91% of the people.
Then
again, maybe we’ve slidden all the way back to the early days of the Republic,
when Congress mirrored the legislative assemblies of Europe minus their clergy
and hereditary nobility. The 400 richest persons in America (0.000001% of
the population) have as much as the bottom 150,000,000 people (50% of the
population). Figures from the 2010 census indicate that is the approximately
the same number as the poor in our country. That top 1% we’ve been
hearing so much over the past year and a half about control 60% of the wealth
of the country, leaving a mere 40% of the wealth for the bottom 99% upon which
they sit.
The number
of poor relative to the wealthy who graduate college or university has dropped
by 50% since Reagan and Stockman first started slashing federal aid to
undergraduate institutions and tuition assistance to students in the early
1980's.
During the
Golden Age of Capitalism (1946-1971), the income tax rate for the wealthiest
Americans was 91%, with the threshold for that rate being $200,000. As
for the estate tax which Republicans fondly refer to as the “death tax”, during
this period of prosperity, once an estate surpassed the $60,000 a tax rate of
77% kicked in. Today, the tax rate for the top bracket is 35% with a
threshold of $379,150, while the estate tax is 35% of anything more than
$5,000,000.
If Mr.
Herbert Hoover lived today, he might have a different idea of his “golden age”
for the wealthy in America.
“If you
feed the horse enough oats, some will pass through to the road for the
sparrows.”
Meanwhile,
the rest of us follow behind them with a pooper-scooper to catch the oats
trickling down from the backsides of their horses.
Economic Recovery: What We Need Right NOW
We are governed in every aspect of our lives by the idea that the
chimeric gods of the financial Olympus represented by the name Wall Street are
relevant to the lives of every day citizens when in fact they are no more
relevant than the number of suckers at the tables of Las Vegas, Atlantic City,
and reservation casinos or the rate of participation in the
government-sanctioned numbers rackets known as state lotteries. Or as Steig Larsson (author of the excellent Millennium trilogy) put it: “It doesn’t
have a thing to do with reality or the economy.”
The
current so-called “debt crisis” has been imposed upon the governments of the
world by a web of financial markets—including stock exchanges and brokerages,
commercial and investment banks, insurance companies, credit and finance
companies—running rampant with speculation, fraud, irresponsibility, avarice,
and selfish ambition.
They
appeal to the governments of the world to be bailed out of the quagmire they
have created for themselves by cutting back spending on programs and
infrastructure which benefit the general welfare in order to provide a
life-raft for an industry of proven detriment to the 99% of the population
They are
asking us to finance their gambling habit.
News organizations are fond of quoting the daily figures from the
nation’s and the world’s stock markets as if those are in any way relevant to
the economic health of either the nation or of the world. The USA is supposed to be in a recovery
because more of the 1% are throwing around money at the stock market crap
tables and meanwhile 8.9% are unemployed.
How is that not a recession?
In 1980, future POTUS George H.W. Bush called Reagan’s
supply-side/Hoover’s trickle-down/the Gilded Age’s horse-and-sparrow economic
“theory” what it really is: voodoo economics.
But then all economics is voodoo.
Economists, those faithful believers in the Almighty Invisible Hand (a
major reason why economics is a liberal art rather than a social science), are
predicting a “mild recession” for Europe in 2012, as if 10.7% current
unemployment does not mean that Europe has been in a “recession” since
2007.
No recession? Ask the citizens of
Greece, Spain, Portugal, Italy, France, and Ireland if they feel prosperous
right now.
The
neoliberal program of the Washington Concensus that has governed domestic
policy of every administration, including the current one, since 1981 (economic
liberalization, open markets, abolition of tariffs, turning governmental
functions over to private corporations, deregulation of industry and finance,
slashing of support for higher education, a prominent public role for the
private sector, and destruction of organizations of the working- and
middle-classes), has but one inevitable goal, pursuing invariably the same
object:
To give
the private sector, Corporate America, the main role in forming economic and
social policy and make it the de facto—unelected though of course most
powerful—fourth branch of American government.
Just to review: the top 1% (3,130,000 individuals) in this country and in
every other in the world, the Third Estate, control 60% of the wealth of the
country, leaving a mere 40% of the wealth for the bottom 99% (309,870000
individual citizens) over which they sit.
At the apex of this Third Estate are the 400 richest persons in America
(0.000001% of the population), who themselves alone have as much as the bottom
156,500,000 people (50% of the population), approximately the same number as
the poor in our country according to the 2010 census. Which still leaves
a tremendous amount of wealth and power for the other 0.999999% of the total
U.S. population (3,129,600 individuals) who make up the rest of Third Estate.
The top 10% of the bottom 99% majority make up what Marx called the
petite, or petty, bourgeoisie, and perform the same function among their fellow
99%ers as Malcolm X’s house slaves did among their fellow slaves in the
field. They are also equally in denial
about their true status.
The target audience of the Koch brothers and their friends is not the
pawns in their Tea Party movement but the house slaves of the 10% just below
them on the socio-economic ladder. It is
to that same 10% which the mainstream media acts as cheerleaders and sycophants
as they praise the financial imperial collective about how beautiful its new
clothes are.
In America, of course, social barriers are more porous and fluid, and
many of the 1% and the 10% stand on the side of the remaining 89%. Perhaps as big a percentage as those in that
89% who see themselves as temporarily embarrassed rich rather than poor.
It was against this onslaught, this idea that the 99% would have to pay
for the profligate waste of a sizable portion of the 10% for the benefit of the
1%, that Occupy Wall Street was born, striking out blindly, knowing intuitively and
instinctively that something is wrong, where it is wrong, but without having
the knowledge and vocabulary to say what that is.
Meanwhile,
the brokers, financiers, business executives, and brokers sipped champagne in
their balconies overlooking the sidewalk and took pictures of the marching
masses while ridiculing them for their ignorance and presumed inability to
articulate exactly what the target of their anger was, calling out “Eat some
cake!”.
Occupy the
SEC (Securities and Exchange Commission rather than Southeastern Conference)
changed all that with its 360-page commentary on the damage done to the nation
since the protections of the Glass-Stiegall Banking Act of 1933 were
progressively destroyed by the acolytes of the Washington Concensus.
By the
way, neoliberalism now governs the domestic policies of nearly every nation
around the world, including those who hate the “Great Satan” and the rest of
the West. Take the Islamic Republic of
Iran, for example, where every president since Ali Akbar Hashemi Rafsanjani in
1989 (through his successor Mohammad Khatami and the current Mahmoud
Ahmadinejad) has followed the same neoliberal policies.
Some have
pointed to the failing economies of Europe as an example of how states that
provide an adequate social welfare net for their people are doomed to
failure. What these commentators fail to
admit is that the economies of those nations are failing because their
governments adopted the policies popularized by Margaret Thatcher, Ronald
Reagan, John Major, Bill Clinton, and Tony Blair.
Here are
my own personal prescriptions for what needs to be done, as a start:
To start
off with, the structure of the United Nations needs to be significantly altered
because it current antiquated design dates from the days it began as the World
War alliance against the Axis. The first
reform the UN needs is to remove the veto from the five permanent members of
the Security Council.
Now, to
save the U.S. and return it to a semblance of the prosperity it saw during the
Golden Age of Capitalism:
Pass Amendment
XXVIII to the U.S. Constitution abolishing the doctrine of corporate personhood
and thereby reversing the corruption of our legal system stretching from Pembina
Consolidated Silver Mining Company v. State of Pennsylvania in 1888 to Citizens United v. Federal Election
Commission in 2010.
Pass Amendment XXIX to the Constitution abolishing
the Electoral College and allowing for the direct election of the President.
Abolish voter photo ID laws nationwide as a
form of poll tax, by FEC fiat if possible, by federal legislation if necessary.
Prohibit insider trading by Members of
Congress. Require that all stocks and
bond holdings be put in trust for the duration of their time in Congress.
Prohibit former Members of Congress and
federal officials both military and civil from working as lobbyists for at
least ten years after leaving office.
Start
enforcing the Interstate Commerce Act of 1887, the Sherman Antitrust Act of
1890, the Clayton Antitrust Act of 1914, and the Robinson-Patman Anti-Price
Discrimination Act of 1936, the Celler-Kefauver Anti-Merger Act of 1950, and
the Hart–Scott–Rodino Antitrust
Improvements Act of 1976. Treat
anitrust provisions of the U.S. Code as if it were actual law rather than mere
suggestions or recommendations. Which
they are.
Repeal the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 which made it far harder for consumers to
discharge debts through declaration of bankruptcy.
Enact a law to overturn SCOTUS’s decision in Kelo
v. City of New London of 2005 allowing personal property to be seized
under eminent domain by public government for the commercial profit of private
corporations.
Repeal the rule issued by the Federal Office
of the Comptroller of the Currency in 2004 which preempted states from applying
most of their credit laws to national banks and their subsidiaries.
Repeal the American Homeownership and Economic
Opportunity Act of 2000 which made it harder for consumers to get out of
lender-required insurance.
Repeal the Commodity Futures Modernization Act
of 2000 which deregulated over-the-counter derivatives trading.
Repeal the Gramm-Leach Financial Services
Modernization Act of 1999 which gutted the remaining protections established by
the Glass-Steagall Banking Act of 1933.
Repeal the Office of Thrift Supervision rule
of 1996 preempting all state laws regulating savings and loan credit
activities.
Repeal the Economic Growth and Regulatory
Paperwork Reduction Act of 1996 which loosened supervisory regulations over
financial institutions and lessened creditor liability
Repeal the McCollum Truth in Lending Class
Action Relief Act of 1995 which eased regulations on creditors and made it more
difficult to sue for securities fraud.
Repeal the Interstate Banking and Branching
Efficiency Act of 1994 which abolished the Bank Holding Company Act prohibition
against a bank holding company in one state acquiring a bank headquartered in
another state.
Repeal the Alternative Mortgage Transactions
Parity Act of 1982 which allows adjustable rate mortgages (ARM’s),
balloon-payment mortgages, interest-only mortgages, and option-ARM’s.
Repeal the Garn-St. Germain Depository
Institutions Act of 1982 which deregulated the savings and loan industry and
credit unions.
Repeal the Truth in Lending Simplification and
Reform Act of 1980 which limited the information credit companies are required
to disclose on interest rates and exempted creditors from liability in several
cases.
Repeal the Garn Depository Institutions
Deregulation and Monetary Control Act of 1980 which removed usury caps for
mortgages, raised the bar for prosecuting lenders, forced all banks to obey the
Federal Reserve, allowed banks to merge, removed the power of the Fed’s board
of directors to set savings interest rates, and allowed credit unions and
S&L’s to offer cheques and other banking services without regulatory
safeguards.
T o prevent lenders from hiding in states with
the weakest consumer protections, pass a law overturning SCOTUS’s decision in Marquette
National Bank of Minneapolis v. First of Omaha Service Corporation which
allowed banks to make loans in states other than where headquartered.
Repeal the Bank Holding Company Act of 1970
which allowed commercial banks, via holding companies, to both accept deposits
and make commercial loans.
All of these actions will finally restore to
consumers and the economy the protections which enabled the American economy to
work for all as well as it did from 1946-1971 by restoring Glass-Stiegall to
its proper place. This is the BARE
MINIMUM that should be done.
There are, in addition, several other
provisions I suggest:
Restore the Golden Age of Capitalism (1946-1971) system of 24 tax
brackets, with a top marginal tax rate of 75% for the top bracket of $1,500,000
(the equivalent in today’s dollars) and over.
Tax non-family farm estates at the same percentage, 75% of everything
above $500,000 (likewise, the equivalent in today’s dollars).
Repeal the Taft-Hartley Labor and Management
Relations Act of 1947 which limits the protections of the Fair Labor Standards
Act of 1938 by allowing so-called “right-to-work” laws; prohibiting
jurisdictional strikes, wildcat strikes, solidarity strikes, political strikes,
secondary boycotts, mass picketing, closed shops, and monetary donations to federal
campaigns; restricting union shops; authorizing the federal government to enact
strike-breaking in the name of “national security”; and forbidding federal
employees from striking.
Abolish “right-to-work” laws nationwide by
federal law.
Make nondisclosure to Congress by the Federal
Reserve of actions such as its 2008 $7,700,000,000,000 (7.7 TRILLION) no-interest
loans to banks and financial institutions around the world punishable as a
felony.
Abolish such easily abused financial vehicles
as collateralized debt obligations (CDO’s), and leveraged buyouts (LBO’s). Pass a system of finance law guided by the
provision that for the financial industry only that which is specifically
allowed by law is permissible and that anything else is illegal and punishable
by law.
Prosecute
Standard and Poor’s, Moody’s, and Fitch’s
under RICO for actions such as its extortion against the State of Georgia in
2002 and the State of North Carolina in 2003 to strong arm them (successfully,
by the way) into repealing their anti-predatory lending laws, as well as its more
recent actions the past year in the European Union.
Establish
universal healthcare. America is the
only industrialized country which does not have it. Our costs are higher, service lower, benefits
more restricted.
Abolish
Bill Clinton's “workfare for welfare” Temporary Assistance for Needy Families
(TANF) and bring back Aid to Families with Dependent Children (AFDC) and repeal
all other programs intended to humiliate rather
than help the poor.
Restore
pre-Reagan era levels of funding for public institutions of higher education
and support for tuition.
Establish a
guaranteed income for all Americans. The
last two prominent Americans to suggest this were Martin Luther King and
Richard M. Nixon.
Reinstitute
by law the Fairness Doctrine of 1949 which the FCC repealed by order of then
President Ronald Reagan in 1987.
Abolish
the filibuster in the Senate.
Abolish state laws dealing with immigration.
Restore
USPS to cabinet status and federal financial backing.
Abolish
“three (or two) strikes and you’re out” laws nationwide as cruel, inhuman, and
irrational, as well as overly costly.
End trying
juveniles as adults for any crime.
Americans can’t legally drink until they’re 21 and in most states for an
adult to have consensual sex with a person under age 18 is still considered statutory
rape because the law judges those under 18 to not have developed sufficiently
to make considered decisions.
Legalize all drugs currently under prohibition. The war on drugs is way too expensive, unending,
harmful to more people, and futile.
End the
war in Afghanistan by 2014. Close half
our military bases world-wide.
And last
but not least, punish so-called white collar criminals in the finance industry
proportional to the damage their actions inflicts upon the country and the
world.
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