Bob Herbert concludes his tenure at The New York Times with this strikingly spot on piece. America - losing its way and its wealth to the very, very top echelon of society. Like a malignancy, where a few cells consume all of the vital nutrients of the body, including the other cells of the body itself until death brings the process to a terminal end, the assimilation of practically all of the nation’s productive wealth by the very few portends a terminal future for what is left of the republic. This isn’t scaremongering, this is simply pointing out a historical eventuality. For every society in history which has seen these same conditions of wealth division between the rich and poor, between the haves and the have nots, become wider and wider and deeper and deeper, will inevitably implode. The longer the disease manifests, the more disturbing the conditions of collapse (and often revolutionary turmoil). That process may also pass through an era of full fledged totalitarian repression, which adds to the misery as well.

The U.S. has not just misplaced its priorities. When the most powerful country ever to inhabit the earth finds it so easy to plunge into the horror of warfare but almost impossible to find adequate work for its people or to properly educate its young, it has lost its way entirely.

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There is plenty of economic activity in the U.S., and plenty of wealth. But like greedy children, the folks at the top are seizing virtually all the marbles. Income and wealth inequality in the U.S. have reached stages that would make the third world blush. As the Economic Policy Institute has reported, the richest 10 percent of Americans received an unconscionable 100 percent of the average income growth in the years 2000 to 2007 [that is a moral obscenity for which there is no reasonable excuse - USTV Media ed.], the most recent extended period of economic expansion.

Americans behave as if this is somehow normal or acceptable. It shouldn’t be, and didn’t used to be. Through much of the post-World War II era, income distribution was far more equitable, with the top 10 percent of families accounting for just a third of average income growth, and the bottom 90 percent receiving two-thirds. That seems like ancient history now.

The current maldistribution of wealth is also scandalous. In 2009, the richest 5 percent claimed 63.5 percent of the nation’s wealth. The overwhelming majority, the bottom 80 percent, collectively held just 12.8 percent.

This inequality, in which an enormous segment of the population struggles while the fortunate few ride the gravy train, is a world-class recipe for social unrest. Downward mobility is an ever-shortening fuse leading to profound consequences.

A stark example of the fundamental unfairness that is now so widespread was in The New York Times on Friday under the headline: “G.E.’s Strategies Let It Avoid Taxes Altogether.? Despite profits of $14.2 billion - $5.1 billion from its operations in the United States - General Electric did not have to pay any U.S. taxes last year.

Didn’t hear about that on the news? Perhaps the fact that GE owns one of the largest corporate media conglomerations on the planet might have something to do with that. And now with GE CEO Jeffrey Immelt on leading Obama’s Council on Jobs and Competitiveness, you can kiss any serious attempt at addressing the systemic conditions causing this whole situation goodbye.

Overwhelming imbalances in wealth and income inevitably result in enormous imbalances of political power. So the corporations and the very wealthy continue to do well. The employment crisis never gets addressed. The wars never end. And nation-building never gets a foothold here at home.

New ideas and new leadership have seldom been more urgently needed.

Read the full text of Bob Herbert’s final column for the New York Times Here.

This article by Michael Pirsch is essential reading towards better understanding the full scope of what we are facing here today regarding the future of democracy in America, and our ability to manage such a system of governance in the face of a form of corporate feudalism which is insinuating itself into nearly every fabric of our society. Lots of good background information on the current state of wealth disparity, as well as on the history of the development of propaganda in American society, which should be required reading in every American civics class.

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” - Warren Buffett to The New York Times, November 26, 2006

There is overwhelming evidence that we are entering the final chapter of class warfare in the US. Today, in the “public arena,” it is forbidden to say class warfare, and many citizens do not regard themselves as working class. The assault on language comes compliments of the propaganda apparatus, which includes: public relations, marketing, corporate media and the entertainment industry, universities, think tanks and so on. Its purpose is to distract our attention from serious matters so we can focus on trivial matters - usually involving consuming. Edward Bernays, the founder of the modern propaganda industry, described the process:

Those who manipulate the unseen mechanism of society constitute an invisible government. We are governed, our minds molded, our tastes formed, our ideas suggested largely by men we have never heard of … in almost every act of our lives whether in the sphere of politics or business, in our social conduct or our ethical thinking we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind.

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Our time is coming. Soon, Congress will once again deliver more tax cuts to the wealthiest people on the planet, at a time when perhaps more than 60 percent of the American people is at severe economic risk. This time also marks the beginning of the process of ending Social Security and replacing it with mandated contributions to Wall Street, which - for a fee, and with no guaranteed return - manage individual workers’ retirement accounts. Wall Street’s management of what used to be Social Security will - through commissions and other fees that are not a cost in the present Social Security system - reap an obscene amount of money, maybe in the hundreds of billions annually.

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There was a time when the wealthy elite actually paid substantial taxes. The purpose of taxing the extraordinarily rich is to prevent an aristocracy from developing and to maintain a true democracy, a feat Aristotle recognized as impossible in the face of great income inequalities. Now, after over 35 years of cut, cut, cut for the rich, we have the most powerful aristocracy in history, and they are waging war against the rest of us. If you follow the results of studies that show the disparity of wealth in the US, you will see the flow of money from the bottom 90 percent to the top 1 percent over the 60 years between 1950 and 2010. The statistical evidence of the existence of class war is the direct result of the wealthy elite’s ownership of Congress, the executive branch and the courts.

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A vital instrument in the propaganda apparatus’ control of our thinking and thought processes is the television. More than 80 percent of the funds spent in the 2010 election were spent in the realm of television. Imagine what would happen if we didn’t watch it. Billions of dollars would be wasted because the voters did their own research and, through discussions with their neighbors, decided on the candidate with the best program, not the best television ads. An achievable dream, as long as there is unfettered access to a neutral Internet?

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Finally, it is our right and our duty to replace the corrupted government with one that works for the public welfare, ensuring that the wealthy elite never again endanger all life on this planet or destroy our collective humanity. We are “endowed by our Creator with certain unalienable rights … among these are life, liberty and the pursuit of happiness.” We must recognize our government has become destructive of those ends and reform it. The Declaration of Independence goes on to say, “mankind are more disposed to suffer while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuse and usurpations … reduce them under absolute despotism… ” we must then accomplish wholesale change. Have you suffered enough, or do you want more?

Study the graphs and read the full text of this article Here

This is one of the best explanations I’ve ever read on neoliberal economics and the politics of “market fundamentalism” and its role in the global economic meltdown we are currently experiencing. This should be required reading in economics and political science classes, and fodder for every news and business program in the media. The mass of Egyptians have obviously had enough of it. Have we?

To describe blatant exploitation of the political system for personal gain as corruption misses the forest for the trees. Such exploitation is surely an outrage against Egyptian citizens, but calling it corruption suggests that the problem amounts to aberrant behavior from a system that would otherwise function smoothly. If this were the case then the crimes of the Mubarak regime could be attributed simply to bad character: change the people and the problems go away. But the real problem with the regime was not necessarily that high-ranking members of the government were thieves in an ordinary sense. They did not necessarily steal directly from the treasury. Rather they were enriched through a conflation of politics and business under the guise of privatization. This was less a violation of the system than business as usual. Mubarak’s Egypt, in a nutshell, was a quintessential neoliberal state.

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‎Guaranteeing the sanctity of markets is supposed to be the limit of legitimate state functions, and state interventions should always be subordinate to markets. All human behavior, and not just the production of goods and services, can be… reduced to market transactions. The market becomes an end in an of itself, and since the only legitimate function of states is to defend markets and expand them into new spheres, democracy is a potential problem insofar as people might vote for political and economic choices that impede the unfettered operation of markets, or that reserve spheres of human endeavor (education, for example, or health care) from the logic of markets. Hence a pure neoliberal state would philosophically be empowered to defend markets even from its own citizens. As an ideology neoliberalism is as utopian as communism. The application of utopian neoliberalism in the real world leads to deformed societies as surely as the application of utopian communism did.

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As neoliberal dogma disallows any legitimate role for government other than guarding the sanctity of free markets, recent American history has been marked by the steady privatization of services and resources formerly supplied or controlled by the government. But it is inevitably those with closest access to the government who are best positioned to profit from government campaigns to sell off the functions it formerly performed. It is not just Republicans who are implicated in this systemic corruption. Clinton-era Secretary of Treasury Robert Rubin’s involvement with Citigroup does not bear close scrutiny. Lawrence Summers gave crucial support for the deregulation of financial derivatives contracts while Secretary of Treasury under Clinton, and profited handsomely from companies involved in the same practices while working for Obama (and of course deregulated derivatives were a key element in the financial crisis that led to a massive Federal bailout of the entire banking industry).

So in Egyptian terms, when General Secretary of the NDP Ahmad ‘Izz cornered the market on steel and was given contracts to build public-private construction projects, or when former Minister of Parliament Tal‘at Moustafa purchased vast tracts of land for the upscale Madinaty housing development without having to engage in a competitive bidding process (but with the benefit of state-provided road and utility infrastructure), they may have been practicing corruption logically and morally. But what they were doing was also as American as apple pie, at least within the scope of the past two decades.

Read The Full Article Here

This past week the Grinch rode into town and published her Christmas Story in the Washington Post. Locally, the Dayton Daily News couldn’t wait to re-publish it. Perhaps your local “truth” monger printed it, too. In case you missed it, the core paragraphs read like this:

Totalitarians throughout history have relied on writing and speaking badly - that is, without clarity - to keep the masses confused and captive. Clarity, the enemy of deceit, is anathema to authoritarians everywhere.

[Pseudo-bipartisan rap on Repubs here, before Parker goes on with a deceitful Christmas story about “Joe and Mary.”]

Democrats are equally guilty of obfuscation through language distortion. How many times throughout the tax bill debate have you heard some variation of the following? Giving tax breaks to the rich will add to the deficit.

Pardon? How does money in someone’s own pocket add to another’s debt? This sort of logic is possible, of course, only under confiscatory rules of wealth redistribution

And then Parker goes on to employ the very sophistry she decries:

Permit me to reword the issue just a tad. Let’s say Joe is $100 in the hole and yet continues to spend money like a drunken fool. Mary has five bucks, which she declines to share because she has to buy food. Joe is insistent. His debt will get worse if Mary doesn’t help out. This may be true, but Mary isn’t convinced that helping Joe pay down his debt will do any good as long as he continues to spend. She’s betting that Joe will just dig a deeper hole, and she will have less security of her own.

You see the problem. It isn’t the money. It’s the dishonesty of the argument. Allowing wealthier Americans to keep the amount of money they are now getting isn’t adding to the debt. Yet, the effect of this oft-repeated trope has been to demonize “the wealthy,” as if they somehow have wronged their fellow citizens by working hard and achieving what everyone else wants.

Let’s be clear here: Rich “Mary” is not a little old spinster with $100 under her mattress. She is a multinational financier who has billions of dollars, many of them hidden in Swiss banks and in the Cayman Islands. She hides it there so she doesn’t have to pay taxes for the U.S. soldiers who protect her businesses in Asia and the Middle East. But Mary pretends to be American. You can watch her wave the flag on TV.

Mary gives Joe loans (called “mortgages” or “credit cards”) to buy her products. She uses the profit to do two things: First, she funds congressmen to abolish bankruptcy and usury laws. We used to call this a “bribe,” but now it’s apparently “legal.” Second, she moves Joe’s job to China and pockets the difference between Joe’s American wage and Zhou’s Chinese wage. She calls this “smart business.” After she’s taken Joe’s job away, she calls Joe a drunk and a ne’er-do-well. She tells him he “has to get more education.” Then she forecloses on Joe’s house because there are no more bankruptcy or usury laws to protect him. But Mary’s not unfair: Mary treats Chinese Zhou the same way.

Everybody talks about how it was WWII that lifted us out of the Depression, but it wasn’t so much the war itself as the high marginal income tax rates that were imposed to support the war. Then, before Mary could smuggle a billion dollars out of the company and out of the country, she had to pay 90% in taxes. Those businessmen who didn’t want to pay taxes had to put the company’s money back into company instead of into their pockets.

And let’s be especially clear about motives: the purpose of progressive taxation is not to “soak the rich” or “transfer money to the poor.” If you gave Joe a billion dollars on Friday, on Sunday he’d probably just bet it all on the Bengals. The long-term purpose of progressive taxation is to ensure that all men who are created equal have equal opportunity. That’s why Governments are instituted among Men to “promote the general Welfare” for “ourselves and our Posterity.” The short-term purpose of progressive taxation is (a) to make it so Mary can’t afford to buy congressmen anymore, and (b) to keep profits and investment in /this/ country so everybody has a steady job. If Mary doesn’t like it, she should go live in Russia with the other oligarchs. See how long their army will protect her business tax-free.

A slightly more technical and less rhetorical statement of the economic principles at work here was this must read posted at Naked Capitalism.

- Posted by don@leftofdayton.net

Bullseye.

During the production of UnCommon Sense TV, co-producer Ed Lacy along with myself used to caustically joke about the policies of “banana Republicans.” Today, those policies continue to become more caustic and less joke (unless one is ready to admit that the joke, and a dark and cruel one at that, is on the preponderance of 95% of the American population).

Seems New York Times columnist Nicholas Kristof shares some of those perspectives…

In my reporting, I regularly travel to banana republics notorious for their inequality. In some of these plutocracies, the richest 1 percent of the population gobbles up 20 percent of the national pie.

But guess what? You no longer need to travel to distant and dangerous countries to observe such rapacious inequality. We now have it right here at home, and in the aftermath of Tuesday’s election, it may get worse.

The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

C.E.O.’s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.

Read The Full Article

Salient analysis which pretty much sums it up on a number of fronts, and lays bare the case on the destructive anti-democratic nature of ‘market societies’ and the ideology that underlines them.

If we take seriously the ideology, arguments and values now emanating from the right-wing of the Republican Party, there is no room in the United States for a democracy in which the obligations of citizenship, compassion and collective security outweigh the demands of what might be called totalizing market-driven society; that is, a society that is utterly deregulated, privatized, commodified and largely controlled by the ultra-rich and a handful of mega corporations. In such a society, there is a shift in power from government to markets and the emergence of a more intensified political economy organized around three principal concerns: deregulated markets, commodification and disposability. In spite of the current failure of this system, right-wing Republicans and their allies are more than willing to embrace a system that erases all vestiges of the public good, turning citizens into consumers, while privatizing and commodifying every aspect of the social order - all the while threatening the lives, health, and livelihoods of millions of working class and middle class people.

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But more so, it produces a kind of dysfunctional silence in the culture in the face of massive hardship and suffering. There is more than moral indifference and political cynicism at work here; there is also a culture for which there is not much room for ideals, a culture that now considers public welfare a pathology, and responsibility solely a privatized and individual matter. This is a politics of disinvestment in public life, democracy and the common good.

Shouting against the evils of big government does little to register or make visible the power of big corporations or a government that serves corporate rather than democratic needs.

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As democracy is increasingly reduced to an empty shell and the rise of a corporate and punishing state looms heavily on the 21st-century horizon, the market-driven principles of deregulation, radical individualism and privatization penetrate all aspects of daily life. Such market-driven values and their accompanying power-shaping institutions now profoundly influence the very nature of how the American public think, act and desire. All of which are increasingly wedded to the epicenter of a grotesque consumer culture, whose underside is a heartless indifference to the suffering and hardship of the millions of people without jobs, homes, health care and, increasingly, hope.

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In this scenario, each individual is on their own in confronting the many systemic problems facing American society, each of us responsible for our own fate, even when facing systemic problems that cannot be solved by isolated individuals. This politics of hysteria and ruthlessness that is now on full display in America is not just an attack on the social state, big government, the public sphere and the common good, but the very essence of politics and democracy. This is truly a politics that celebrates death over life.

Read The Complete Essay

Excellent piece by John Cassidy on the real implications of what the health care legislation package means.

But what about the economics of it all? In general terms, as I’ve said before, the case for reform is unassailable. Health care provides a textbook case of an industry plagued by numerous forms of market failure, including moral hazard, adverse selection, and free riding, as well as ad-hoc government interventions. The result is a horrendously costly mishmash, which manages to combine excessive expenditure in some areas (diagnostic testing) with too little expenditure in others (preventative care), and overall health outcomes that are middling, at best. According to Wikipedia, the U.S. ranks 38th in the global life-expectancy league table, just below Cuba (!) and just above Portugal.

Unfortunately, the reform bills that Congress has passed don’t tackle some of the system’s underlying problems, such as the lack of incentives to limit health-care expenditures. Yes, there is financing for pilot schemes that might eventually generate some savings, and, yes, a new independent board of experts will be tasked with identifying possible cuts, but to conflate these initiatives with a guaranteed cure for cost inflation is to fall victim to wishful thinking. Unless I am mistaken—and I hope I am—the reform will end up costing taxpayers considerably more than the Congressional Budget Office is predicting, and it won’t cover nearly as many people as hoped for. In another decade or so, Congress will be back at work, trying to provide genuine universal coverage at a more affordable cost.

The problem is fundamental. Setting aside the expansion of Medicaid and some long-overdue restrictions on the egregious behavior of health insurers, this isn’t really health-care “reform”: it is a significant expansion of the current system of private insurance, with the taxpayer footing the bill…a peculiar amalgam of egalitarian intent and corporate welfare: egalitarianism in the form of providing health care to those who can’t afford it; corporate welfare in the form of paying corporations such as Aetna and Wellpoint generously to take on millions of new enrollees. If the average American doesn’t realize this, people on Wall Street do. Since Obama’s election, in November, 2008, Aetna’s stock has gone from $20 to $35; Wellpoint’s has gone from $30 to $63.

Read The Full Article in The New Yorker

Another commie liberal attacking America’s true economic achievers…

Warren Buffett’s Statement to Congress on Estate Taxes

Mr. Chairman, Senators, I appreciate the opportunity to express a few views on the estate tax.

I will limit my remarks to three points.

The first relates to the intellectual dishonesty employed by those who use the phrase ‘death tax.’ This term is clever, it is Orwellian, and it is, if you’ll pardon the expression, dead wrong.

More than 2.4 million Americans will die this year. About 12,000 of them will leave an estate that will be taxed when the exemption goes to $3 million, as Senator Grassley mentioned. It will be 9600 estimated and it’s been 19,000 when the exemption was (lower.)

That means that 99-and-a-half percent of estates will be tax-free. You would have to attend 200 funerals to be at one at which the decedent’s estate owed a tax. Indeed, far more people who die receive a large tax benefit. I don’t think that’s generally understood. Namely, a stepped up basis on appreciated assets.

If people insist on renaming the estate tax, it would be more appropriately labeled the ‘death present.’

The second point I would like to make is that in a country that prides itself on equality of opportunity, it is becoming anything but that, as the gap between the super rich and the middle class widens in dramatic fashion…

Twenty years ago, 1987, it took $220 million dollars to make the list. Now it takes $1.3 billion, about a six-for-one increase. The total wealth of the list in 1987 was then $220 billion. Now it’s $1.54 trillion, exactly a seven-for-one increase.

Tax law changes have benefited this group, including me, in a huge way. During that same period, the average American went exactly nowhere on the economic front. His income went from a median $26,061 to $48,201, almost exactly the increase of the CPI during the 20 years.

He’s been on a treadmill while the super rich have been on a spaceship.

Watch The Video/Read The Complete Transcript