Tuesday, December 07, 2010

How The Wealthy Elites Stole Our Prosperity

Those seeking profits, were they given total freedom, would not be the ones to trust to keep government pure and our rights secure. Indeed, it has always been those seeking wealth who were the source of corruption in government. No other depositories of power have ever yet been found, which did not end in converting to their own profit the earnings of those committed to their change ~ Thomas Jefferson (4/13/1743 to 7/4/1826) 3rd President of the United States (3/4/1801 to 3/4/1809). He was the eponym of Jeffersonian democracy and the co-founder and leader of the Democratic-Republican Party, which dominated American politics for 25 years.

Alan Greenspan served as Chairman of the Federal Reserve of the United States from 1987 to 2006. This period of time covered the presidencies of Ronald Reagan, George H. W. Bush, Bill Clinton and George W. Bush. As Fed chairman, Greenspan worked to advance the interests of the upper-class at the expense of the interests of the rest of the nation.

During the Clinton years the economy boomed. Business did well and the real wages of workers began to rise. This worried the investor class. If wages continued to rise it would affect their profits. Sure, they'd still go up, but they deserved a BIGGER piece of the expanding pie. In early 1997, the sixth year of economic expansion, Alan Greenspan made a statement before the US Senate Committee on Banking, Housing, and Urban Affairs meant to reassure the business community that he knew how to keep wages low.

Greenspan said that, while "the performance of the U.S. economy over the past year has been quite favorable", there was nothing to worry about because "workers fear of losing their jobs restrains them from seeking the pay raises that usually crop up when employers have trouble finding people to hire" (Wall Street Journal 1/27/1997). And Greenspan saw one of his main responsibilities as Federal Reserve Board Chairman to be to maintain "a high-enough level of worker insecurity [so] employees wouldn't demand pay raises and benefit increases" ("Screwed: The Undeclared War Against the Middle Class" by Thom Hartmann, p.48-49).

Fed chairman is an influential and prestigious position. People listen to the top economist in the land, so when the Maestro advised that, in order to ensure continued good times, we needed to go after "wage inflation", the President and Congress listened. Under Greenspan the federal government abandoned previously held pro-labor positions. When businesses violated laws on illegal strikebreaking and hired permanent replacement workers, the agencies responsible for the enforcement of these laws declined to intervene (citations issued by the The International Labor Organization attest to this fact).

Immigration laws were inadequately enforced and people willing to work for less diluted the labor pool. Companies were encouraged to, and rewarded for, sending American jobs to low wage countries. Various "free trade" treaties were championed by both Republican and Democratic presidents and ratified by their respective Congresses. ("Power in The Global Arena", Lecture by Noam Chomsky, 5/1998).

The strategy worked. Profits soared (along with upper-class incomes) while pay for the middle class and the working poor remained flat (or went down). Throw the bush tax into the mix and it's easy to see why the economy is in the dumper. Economist Ravi Batra explains that, "a healthy economy requires that there is a balance between supply and demand. Here supply means the production of goods and services offered to entire society, and demand means society’s demand for such things. Thus, economic balance requires that [supply equals demand]. Without this balance, there is either high unemployment or high inflation".

In other words, Supply side economics and anti-wage inflationary policies lead to unemployment and recession. Because The average citizen (who is still employed) can no longer afford to purchase what is being produced (especially after they've mortgaged their home to the hilt and maxed out their credit cards).

I made this point on another message board in a recent discussion with an "Independent Moderate". I claimed that the solution to the problem we now face is for our elected officials to take steps to "ensure" wages rise. The Independent Moderate's incredulous response was to ask, "how do you ensure that people's wages increase? The government... not unless you're talking about the old East Germany... can't do that".

Does Willis Hart (the aforementioned Independent Moderate) think I was expressing my desire that the government step in and dictate to business what they pay their employees? If that is the case I'm surprised he didn't cite a Communist country as his example. The reason I wrote this post was to explain how, while remaining a democracy, our government can take steps to ensure that wages rise. Just as the adherents of "Greenspan-nomics" enacted policies ensuring wages remained low, polices can (and should) be enacted to ensure the exact opposite.

Progressive radio talk show host Thom Hartmann agrees that it is possible. According to Mr. Hartmann, "Government can set the rules of the game of business in such a way that working people must receive a living wage, that labor has the power to organize into unions just as capital can organize into corporations, and that domestic industries can be protected from overseas competition. When these rules are combined with a democratic form of government, a strong middle class will emerge. The middle class vanishes and we return to the con's Dickens-era form of economics, where the rich get richer and the working poor are kept in a constant state of fear and anxiety so the cost of their labor will always be cheap" (Screwed, p.50).

The cure for our economic ills is to re-adopt pro-labor, pro-middleclass policies and dump the Conservative policies that favor the wealthy. Repealing NAFTA, raising tariffs and penalizing corporations for shipping jobs overseas will encourage corporations who want to sell goods in America to hire Americans. This will bring jobs back to our country.

Passing comprehensive immigration reform backed up by a program like E-verify will drastically reduce unemployment. That and the passage of the Employee Free Choice Act will cause "worker insecurity" to evaporate and allow more workers to negotiate for higher pay. Throw in health care for all - by way of a public option - and the result will be increased prosperity for a majority of Americans instead of a select few.

For 40 years and counting the economic elites have been inflating their pay by depressing worker compensation. It's a transfer of wealth that has left 20% of the population holding 85% of the nation's wealth. This was not an accident. It was by design, and in my mind amounts to nothing less than thievery.

During the previously mentioned discussion with the Moderate Independent I asserted that the wealthy are "overpaid". The Hartster's response was to claim that I was "casually foisting" my value judgments on everyone else (Republicans and other Moderates like him, presumably). Willis conclusion was that was "ballsy" of me. No Willis, there is nothing "casual" about my conclusions.

I've done my homework on the matter and come to my conclusions based on an investigation of the facts. Actually I think you're the one who is "pretty ballsy" to suggest Liberals have reached their conclusions based on jealously and class envy... instead of a love of country and a desire to do what's in the best interest of a majority of it's citizens.

SWTD #57

Thursday, December 02, 2010

The Liberal Cure For An Economy in Crisis

It would be easier to pay off the national debt overnight than to neutralize the long-range effects of our national stupidity ~ Frank Zappa (12/21/1940 to 12/4/1993) an American composer, electric guitarist, record producer, and film director.

The exchange below recently took place on a "moderate" blog I frequent. A progressive blogger that my "followers" most likely have heard of, LORD TRUTH 101 (what Joe Kelly called himself at the time), made an observation, and a Conservative blogger who frequents said moderate blog responded. BTW, the Con blogger (a guy who doesn't actually have his own blog) refers to President Obama as "Obie"... a term of endearment, I'm sure...

LORD TRUTH 101: I'd love to see real progressive policies enacted. Alas; the Right's propaganda machine is too powerful. The sheeple need their daily fix of lies.

Rusty Shackleford: just what do you consider "real progressive policies?" You guys continue to bitch and moan about Obie being too centrist yet you never ever say what these progressive wonderment cures actually are.

LORD TRUTH 101: Single payer national health insurance that takes the burden of health insurance expense off business. Leaving Iraq and Afghanistan. Actually enforcing labor law and safety regulations ... We've had 40 years of supply side nonsense that led to a 14 trillion dollar deficit. Your answer is keep doing the same thing. You're nuts dude.

My 2 Cents: I believe the most important thing we need to do is pass some serious campaign finance reform legislation. Without it the Republicans will just continue to buy the elections (Something they have been doing for some time, but made much worse by the recent Citizens United SCOTUS decision). Key to accomplishing that feat includes re-electing President Obama to a second term - so he can appoint 1 or 2 more Supreme Court justices - which will tip the balance of the court back to representing the people, instead of the wealthy and corporations.

Return to pre-Reagan tax rates (when the top bracket was 70 percent). Slash the military budget. Withdraw from Iraq and Afghanistan. Medicare for everyone (The health insurers should be put out of business). Lower the Social Security retirement age - this will free up jobs for younger workers and thus lower the unemployment rate.

End privatization - anything the private sector can do a profit the government can do for less. Withdraw from NAFTA and the WTO. Bring manufacturing back to the US using tariffs and the tax code (penalize, not reward companies for shipping jobs overseas). Go after rich tax cheats who hide their money overseas. Pass Employee Free Choice legislation and abolish so-called "right to work" laws - this will put more money in the hands of workers (more of whom will be able to negotiate for fair pay) and stimulate the economy through the resulting increased demand (DEMAND drives an economy, not supply. Supply side economics IS nonsense).

Finally, reinstate Glass Steagall and the STET tax - and Nationalize the Fed. It's time to put an end to parasitic fat cat bankers making a profit off of controlling OUR money supply.

In short, I agree with my esteemed colleague LORD TRUTH 101 - people who vote conservative because they think the Con policies will work ARE nuts. We've been following them since Reagan was elected and they clearly haven't worked. What they have done is make the rich richer and everyone else poorer. Which actually was their goal - so actually they did work, just not for the majority of us.

See also: The big lie: Attacking the Debt is Good Politics by Steve Kornac, Salon 11/11/2010

Dead Link Notice (9/25/2014): The blog of Joe Kelly (AKA Joe Truth, AKA "Truth 101", AKA Joe Hagstrom) is no longer accessible and any link to it (above) now displays a error message that says the blog is "open to invited readers only".

SWTD #56