Wednesday, October 27, 2010

Bizarro Santa - a touching Right-Wing belief in Fairy Tales

A commenter on the last post strikes a condescending and self-congratulatory note, and scolds me for "whining about the success others have achieved" while castigating those who bought homes they could not afford. Ah, yes - the 'Moral Hazard' argument, which applies only to the less-fortunate, but not at all to the too-big-to-fail banks and investment companies, who are now making more money than ever, courtesy of us, the American taxpayers - who, of course, get no such treatment from the recipients of our largesse, but, incredibly, refuse to help those who saved their bacon on the grounds that 'it would reward bad behavior!' Is that the "success" of which I'm supposed to be envious, and to which I am to aspire?

As usual, the Bizarro logic of conservatism rears its head, which leads me to the subject of this post. The most dearly-held beliefs of the conservative philosophy so often include belief in mythical creatures such as "The Invisible Hand of the Free Market", which they revere as if it were a scientific fact like gravity, or inscribed in red in the KJV Bible, instead of a misinterpreted and unsubstantiated economic theory, the implementation of which has brought us to our economic knees. Most of us, anyway. It's like they believe in a Bizarro Santa - one who does travel through a chimney and does have a bag of goodies, but instead of coming down the chimney and distributing the goodies, goes up the chimney with his bag crammed full of our stuff, and flies off to the North Pole with it.

My answer to lightnindan is as follows:

Wow - well done! You have managed to take every plutocratic talking point and tie them up together into a nice neat bow! You missed a couple, to be sure; don't forget about the Welfare Queens® and Lazy People Who Don't Want to Work but Want Other Hard-Working People to Support Them Instead™.

First of all, you start off with a fallacy that you take for a law of nature, like gravity: "You lower taxes to encourage people to engage in certain behavior."

Your smug and condescending attitude aside, this is not a fact. This is a theory. And, I may add, a theory that has not held up especially well. We HAD the 'lower taxes'. It's not like it hasn't been tried. Since 2000, this theory has had all the room it could use. And this is where we have ended up.

The word "taxes", BTW, is - in the context of which it has been used in our public discourse - merely a buzzword for 'taking money from me that I've earned and giving it to lazy people or the Gubmint'. What if your 'taxes' were eliminated, but you had to pay for roads, schools, infrastructure, public safety (police, firefighters), snail-mail (at what it actually costs to mail an object as opposed to what government subsidy of the post office allows us to pay), the legal and justice system (which affords you contract protection, among a host of other things) etc. - all the things that we take for granted that the government manages in our behalf?

You act like every penny you 'earn' came directly out of your ass, instead of the fact that it costs a LOT of money to put together a societal infrastructure where people can do business in the secure knowledge that there is a system of laws to protect you contractually, and a physical and communication infrastructure to support your ability to conduct business with other entities. Also, a public education system insures that you will have educated people to employ, and improve the country. Whether or not you have children has nothing to do with whether as a nation we should support public education and whether you as an individual should pay your fair share of it. Public education, and the GI Bill which allowed returning soldiers to go college, is what allowed us to be intellectual and scientific leaders in the world in the 50s, 60s and 70s. Now, we are falling sadly behind other nations who DO invest in their citizen's education.

But instead, your attitude is like that of a four-year-old who wants to sell lemonade on the sidewalk, so his mama spends money to make the lemonade, gives him a table and a chair to sit in, gives him the pitcher and the cups, and helps him draw a sign that says "Lemonade 5¢", and then proudly claims that "I did it all myself!" It is a childish, simplistic and ultimately unrealistic view of economics.

Also, nothing in what you wrote addressed anything I actually wrote about; you merely trotted out the same tired talking points and sad little 'I got mine' boasting and finger-pointing. Same with the 'Big Bad Government' stuff. Child, please.

Yes, there are individuals who overspent, and overbought, just like there are welfare queens and lazy freeloaders, but they are not anywhere near in the majority, nor are they the reason that the economy collapsed. They are the tokens that the banksters, nultinational corporations and Wall Street would like you to believe are the real problem - like a sleazy magician, misdirecting and pointing in any direction as long as it's away from themselves.

Let's break this down in real terms.

When the cost of living rises, and wages do not, what happens?

One has two choices - work more, and spend less.

This is what most of America has done since 1980.

But, eventually you get to where there are simply no more hours that one can work. And you get to where there are no more corners that you can cut, and the belt will not tighten any more.

Every year, we have been told through our wages that our work is worth less than it was the year before. Yet, productivity has increased - without wages following suit.

This is not conjecture; this is fact. Wages have been stagnant since 1980. And corporations and businesses WILL NOT raise wages unless they are compelled to. This, by the way, is not a criticism of corporations. Why should they? Their one and only directive is profit, and if they reduce their profit by paying more out in wages than they are compelled to, they are breaking their contract with their shareholders. They have to do what they were made expressly to do. They are legally and contractually bound to maximize their profit. This does not make them inherently bad; this is why they need to be regulated more firmly so as not to injure people.

This, by the way, is why they should not be considered legal people. Their aims, interests and needs are different than the aims, interests and needs of human beings.

So how are wages kept commensurate with prices? Through the pressure of collective bargaining. This is the only way to insure that there is enough power on the opposite side of the table to keep things equitable and balance. It is not to be expected that a corporation which depends on quarterly profits is going to voluntarily reduce those profits for something that will not directly and immediately benefit it. There has to be a standard held on what labor costs, because these are human beings who need to eat, breathe, and live, not inanimate objects.

But it is the people running these corporations, banks and investment firms who are profiting in the most grotesque way imaginable. As much as conservatives like to howl about 'redistributing wealth' - it's the most nefarious Communism if that redistribution goes from the top to the bottom (which it never does - the merest mention of the idea is enough to send them into a tizzy) they have no problem with 'redistributing' wealth from the bottom to the top, and that is what has happened.

So, go on and live in your self-congratulatory kindergarten fantasy world. It's too bad you can't see that the Santa you believe in is Bizarro Santa - going UP the chimney - with all your stuff in his bag.

Or, as the Big Red Man says - Ho. Ho. Ho.

Thursday, October 14, 2010

In Plain Language - What the Hell Happened.

Look, folks - it's really simple what happened here. And everything else is bullshit.

For the last 30 years, ever since Reagan came into office and busted the unions, wages have stayed the same or even declined, while prices have risen. This has resulted in every year as a whole workers have made less and less, but it's been so incremental, like the 'boiling frog', that we haven't noticed it, except to think that perhaps we weren't workng hard enough or were spending too much.

The 'investment class' on the other hand (those who don't get wages for working, but make money from investments and stock options - the 'top 1%' who makes money from money and not work), has had its income RISE over 400%.

BUT - since we are no longer a producing society (with most manufacturing jobs outsourced overseas - thanks, Chamber of Commerce!), but a consumer society, the ONLY way our economy stays afloat is for people to BUY things. Remember when Bush said "Go shopping!" after 9/11? This is the reason for the great credit push - they know we aren't paid enough in wages to buy a lot of stuff. So how to get Americans to keep the economy going without raising wages? Make them go into debt! So we get this unlimited credit (and all the costs included in that - the hidden fees, the late charges, the ability to change terms without notice). But that's STILL not enough.

So - enter the real estate/housing bubble, where homeowners are encouraged to buy what they need from the imaginary 'equity' in their homes. Since it doesn't really exist, it's more debt which will be handed down to our children and their children. And since we are NOT paid fair wages (wages that increase somewhat close to what the cost-of-living increase is) because the unions have been demolished, that's the only way we can stay afloat.

But, now even that is exhausted. We have come to the end of the line. The investment class has stolen every penny that we have. There's nothing left to steal from us, the working people. We finally had to stop spending, and that is when everything went down in flames.

Now, the top 10% whines that they pay 40% of all taxes, which they deem unfair. But what they don't say is that they control 90% of the wealth of the country! So, is it fair to pay 40% of the taxes on 90% of the wealth? Is it fair that we pay 30% for taxes on payroll (from WORK), but only 15% on investment income (money made from money)? And when the majority of the wealth of the country is held by investors, THEY DO NOT SPEND IT. It does NOT go back into the economy, it does not create jobs. It goes OFFSHORE to make more money for itself, and is not taxed.

When working people make more money, on the other hand, it DOES go back into the economy in the form of purchasing, which creates a market for things, which creates jobs to serve that market. Investment income does not help the economy. Working people buy things. Working people save money. Non-working people or people teetering on the edge of poverty do not spend, and they do not save.

Don't believe the hype, people. We are being stolen from, and until we see it for what it is, these suited thugs will continue to do so.

Sorry for the rant, but - when I hear this Republican piffle about Big Government and Tax Cuts, I just can't help but holler. If the investment class would pay its fair share, we woldn't be in the mess we're in. We've done it their way for 30 years, and we have become serfs. Guess what? The Trickle Down Theory just means we're being p***ed on.

Tuesday, October 12, 2010

Debt Serfdom

I just read a very informative article by Charles Hugh Smith of Of Two Minds. So many of us like to imagine that we are middle-class (myself included) but when it comes down to meeting the definition of 'middle class', most of us fall short (again, myself included.) He says:

Imagining A Middle Class Does Not Create One   (October 12, 2010)

Surveys show that Americans wildly underestimate the concentration of wealth in America. This disconnect between perception and reality shows the power of propaganda
Americans have been trained to believe that membership in the "middle class" is their birthright if they "work hard" in the status quo.
What income defines "middle class" is a function of locale and prevailing wages/costs ($100,000 in Manhattan or San Francisco isn't much because costs are so high), but in terms of purchasing power we can probably agree that middle class membership includes:
1. reliable private transport
2. a home with meaningful equity
3. healthcare insurance/coverage
4. a retirement fund of some sort
5. a college education/higher education or training
How many people "own" all of the above minimum standards has been drastically reduced by various factors.
Another measure of "middle class" is even simpler: a middle class household owns some wealth. It could be a retirement fund, a free-and-clear home, a business, income property or gold/cash/investments.
By that measure, the middle class comprises at best 20% of the populace.

Check out his charts to see how the numbers really add up.

The basic truth is that working folk have been gradually underpaid for thirty years, and now the chickens have come home to roost. Corporations have built their wealth on the backs of their employees by using money that should have gone to their workers for profits for themselves. And the end result is that there are no consumers left who can afford to consume - in a consumer (not a producer or manufacturing) society. The demise and disrespect of unions has kept the playing field vastly unequal, which is against the classic definition of a 'free market' (mythical though it may be.) In this classic definition, there is supposed to be a balance of powers to make it work, between the company, the employee/worker, and the consumer - much like the 'separation of powers' in the American system of government, designed to keep any one component from dominating the others.

This is not the case today, and the myth of the 'trickle-down' theory, which has been given a 30-year shot, has proven devastatingly wrong. Read Smith's article to see how things have really panned out due to 30 years of conservative economic theory.