Class Warfare or The Social Contract

Today's must read is Paul Krugman's column. Here's an excerpt:

"Republicans claim to be deeply worried by budget deficits. Indeed, Mr. Ryan has called the deficit an “existential threat” to America. Yet they are insisting that the wealthy — who presumably have as much of a stake as everyone else in the nation’s future — should not be called upon to play any role in warding off that existential threat. Well, that amounts to a demand that a small number of very lucky people be exempted from the social contract that applies to everyone else. And that, in case you’re wondering, is what real class warfare looks like."

The cry of Class Warfare has worked well for Republicans for many years. It's worked even better for their clients. Especially the very rich, who own for a living instead of working, whose incomes have been multiplied by five while working people's incomes have been flat or declined. Working people's incomes have measurably declined against rising costs of healthcare, housing, tuition and food. But the rich are fine. The rich are protected by a whole political party.

Taxes on income from stock sales and money manipulation, which is how the rich "earn" their money, have declined. Millions made by buying and selling shares in fractions of a second as they rise and fall are taxed at a rate that's roughly half of what working people pay for their eight, ten, twelve hour days. Fair? Fair doesn't enter into it. The preferable tax rates for financial manipulation are the Republican sacred cow, the Republican golden calf. Voting against them is therefore "class warfare".

The Social Contract is a phrase the Republicans don't use very much. It raises the notion of obligation. Rich people get rich by mastering the art of accounting and accounting dislikes obligations. Obligation is a cost that subtracts from profit. Obligations avoided make the shareholder richer and the executive stock options fatter. So the idea of obligations to others in society is foreign to them. People who live outside their balance sheets don't exist, and people who weigh on their balance sheets are a problem to be avoided.

This is the sad result of forty years of "BusinessThink" in our politics. Owners––stockholders––are valued over workers because of how profits are accounted. There should always be three loyalties in business, but American BusinessThink has abandoned two of them: the customers and the employees. The rest of society was jettisoned long ago.

We need to be reminded what The Social Contract is. It's what our nation was founded on. Adam Smith, the architect of capitalism, wrote about it, but the users of his architecture have managed to forget the most important parts of what he wrote, the parts they find it convenient to forget, just as they forget the inconvenient parts of the Bible and the Constitution. Remind yourself by reading Krugman's column today.