Plutocrats Explain What's Wrong With Working Americans

Jeb Bush’s unending cascade of clueless tactless and gormless remarks rubbishing working people has been unfairly ignored because of Donald Trump’s far more impressive and much louder tsunami of clueless tactless and gormless remarks about every group that doesn’t include billionaires.

To even things out, here’s Jeb in his own words...

"Americans need to work longer hours” ~Jeb Bush (And some feedback from Americans, via the Guardian)

“The American economy needs more immigrants because they’re more fertile.” ~Jeb Bush (There’s been less feedback on this one, possibly because people are laughing...via the Washington Post)

That’s enough Bushism for one meal. There are commentators who are less gormless than Bush. Here are a few:

Robert Reich writes about the biggest myths about poverty.

Paul Krugman writes about the myth that Americans are “living on welfare”. You know, moochers.

Interesting fact: most of those lazy selfish folks living off food stamps are white and living in Republican districts. (Via a recent report in TIME magazine)

The whole Trickle Down Philosophy that has shaped post Reagan America has created enormous prosperity among a tiny percentage of very rich people ––you know, the people who own for a living––and an epidemic of anxiety among the rest of us who work for a living. (Courtesy of the Atlantic)

Even in the Magic Kingdom life is getting very mean. Before they fire you they ask you to please train the imported worker who will be replacing you. (From the New York Times)

In case you’ve bought the propaganda about Climate Change being a “good thing,” consider this (and it’s fairly big): Scientists are now predicting mass malnutrition because of the warming climate. (Via the Washington Post)

Kiss Up. Kick Down.

The massive shift of wealth upward is being engineered as if it’s a war on debt. Make the working class feel pinched, get them in debt, and use that fear of debt as a rationale for paying them less and less, and cutting public efforts to ease the unfairness and relieve distress.

Paul Krugman wrote an excellent piece about The Austerity Delusion for the Guardian.

Another Nobel economist, Joseph Stiglitz, has been warning about the same things. But concentrated wealth can create its own reality.

The class who own for a living use large amounts of cash (they have trillions) to create ads warning about the debt being placed on the children of the people who work for a living.

But this is a bogus warning. They are placing the debt on working people by shifting their tax burden onto working people.

They say public debt will burden our children, but they only want to stop the spending that helps working people.

They are gung-ho about corporate military contractor spending and private prison spending. They oppose education funding and infrastructure funding, calling it wasteful. They oppose fairer taxation that would place the tax burden where it was when we actually had a prosperous working class and functioning infrastructure.

They oppose public spending, calling it a burden on our children. This is as insane as saying we should starve our children to protect their inheritance. It carries enormous social costs. This kind of narrow, self-serving greed is what erodes civilizations. It ultimately leads to collapse. Of course, the wealthy will have offloaded their wealth to remote islands by then.

Even in Kansas, working people are talking back. One waitress has caused quite a stir.

Would you like to see a picture of vast wealth on parade? They always gather to watch two persons of color beat each other up. Now they come in luxury jets instead of limousines. Who paid for that airport? The working taxpayer.

The Republican solution is to give the small class of people who own for a living (whose irresponsible behavior caused the Great Recession) a big fat bonus. A bonus that will perpetuate their wealth and eliminate their obligations to the society that made them rich.

Their hubris is breathtaking. Perhaps because their billions will buy ads to persuade the public to do what they want the public to do. They have only contempt for those who dislike concentrated wealth. People like Pope Francis. In this political climate Jesus wouldn’t have been let near a microphone.

How Is A National Economy Not Like A Household Budget?

Krugman is especially good today. He makes some crucial points, one in particular, that most Americans don't understand, and that the conservative power structure, the banks, the 1%, are determined Americans never understand:

"Let’s start with what may be the most crucial thing to understand: the economy is not like an individual family. Families earn what they can, and spend as much as they think prudent; spending and earning opportunities are two different things. In the economy as a whole, however, income and spending are interdependent: my spending is your income, and your spending is my income. If both of us slash spending at the same time, both of our incomes will fall too."

The Austerity mantra tells us that nobody should spend more than they have in their pocket right now. No homeowners, no car owners, no college for you.

Unless you are a member of the 1% who have accumulated all of America's earning power over the past 30 years.

What income and savings ordinary working and formerly middle class consumers used to spend now belongs to the very rich and adds to the leverage that the 1% has to manipulate the economy.

The 1% also uses this leverage to manipulate Congress to ease their taxes and increase ours, to get our tax dollars to bail out the big banks but not help the homeowners who were wrongfully foreclosed, to get government to protect corporate earnings and CEO pay from taxes but cover any losses they might suffer through their own risky behavior.

The concentration of wealth also buys a lot of media, a lot of punditry, a lot of "expert opinion", a lot of public relations that can be used to persuade the mass of Americans that they don't deserve what they used to deserve, that austerity is good for them, that Americans should settle for less and quit grumbling.

Austerity policies take trillions out of the middle class consumer economy and put them into the well-stuffed mattresses of the 1%.

To what purpose? The rich can afford to play a long game. (Call it a long con if you like.) Their goal is to suppress working incomes to their lowest possible degree. They own for a living; they see working incomes as an evil. They have been suppressing working incomes for the past 30 years. What will eventually happen is the U.S. economy will begin to resemble a third world country, with large slums full of workers desperate enough to work for pennies and small gated enclaves of very wealthy people and their bodyguards.

Interestingly, the Austerity preachers give us Greece as an example of what happens if a country doesn't act according to the wishes of the very rich. But Greece is an example of the opposite. The Greek economy fell apart because its extremely wealthy stopped paying taxes and the consequences (unwise austerity policies) were forced upon the working population. But economies are made up of people who work and spend money, not just people who own for a living, who are rich for a living and do nothing productive. Why are the latter group made immune to taxes? What happens when trillions are taken out of a nation's economy and put tax-free in offshore banks? What happens is a Greek style collapse.

The Foolishness of Austerity Economics

Paul Krugman has been writing about the stupidity of austerity economics. Here's his column from this morning.

Also, there's a new book by David Graeber that fills out the long history of debt, explaining the usefulness of debt on a societal level, shared public debt. The national debt so hated by Republicans and FoxNews fulminators was created by a founding father named Alexander Hamilton. You can see his picture on the ten dollar bill in your pocket. How did we get to where we are now? The recent past is more dramatic and foolish and catastrophic than the longer more rational, more prosperous period between FDR and Reagan. We may be emerging from the catastrophe, but there are powerful people who hold our economy hostage: call them the Austerity Economists. The debt haters who also (no coincidence) created the most damaging debts we're dealing with now.

In the mid nineties, after Clinton had raised some taxes on high earners, fostering a period of sustained growth, there was also an effort made to balance the federal budget, to pay our debts down. Good timing, really. It's good to do this when the economy is up and revenue streams are steady. Keynes said this. But there was a worry among large investors: what would happen when the safest investment of all, the US Treasury note, became less plentiful, became rarer because the government was borrowing less? There was serious concern. Nothing bad happened.

Then Bush Jr. was appointed president, and the prudent Democratic money policies were thrown out. Taxes were cut and spending exploded. Unnecessary wars were declared and pursued profligately. War was paid for outside the budget. More taxes were cut. New security bureaucracies were created. A huge unpaid benefit was given to seniors. Regulations were relaxed on speculators. Huge pools of cash were sloshing around in the pockets of corporations and hedge funds, which was wagered recklessly. We experienced an investment class bubble. It wasn't a housing bubble really, it was driven by rich people with too much money chasing too few plausible investments during a period when average households were feeling stretched and losing buying power.

Then the economy collapsed. The last catastrophic gift from the Bush years. Obama was elected. Responsible people came back to the helm. Why has the economic recovery been so sluggish? Financial sector collapses take longer to recover from. The financial sector itself recovers––look at the profits of the large banks and hedge funds––but the damage to the wider economy, collateral damage done by their crimes to innocent people and households takes a long time to repair. Millions of people will never recover. Their incomes will never recover. Their future will be significantly diminished because of the foolish greedy things done by cowboys in the financial sector, and the millions of households harmed will never be able to earn and spend like they could before, like they might have if President Gore had been able to continue the more responsible policies of the Clinton administration. (The man was elected, after all.)

The most frustrating thing is the foolish Bush policies still have a lot of influence. His advisors took well-paid and highly influential positions in the large financial institutions that Bush failed to regulate, where they continue to influence financial thinking and coerce policy. Bush people still have hands on the financial tiller because our economy is largely controlled by large private entities. Even the public institutions are influenced by large financial players.

The most damaging and weirdly contradictory policy Bush's Boys have pushed, and they've pushed it hard, is Austerity.

Imagine a person is admitted to the ER with massive bleeding. The Austerity policy would dictate the doctors not waste blood donors' blood on this person. BushThink says it's better to give this blood supply to people who already have enough blood, who aren't in danger. If those healthy people don't need it now, it's best to store it in case they'd like to have it in the future. Austerity policy preaches restricting help. Hungry children are helped best by withholding food. It is a do-nothing policy.

The rationale is that households restrain spending when revenue stops. A responsible thing for a household to do. But an economy is not a household. Alexander Hamilton created the national debt to help the economy grow. The debt was an engine for infrastructure investment. It turned the U.S. from a backward nation into the largest economy in the world. Deficit spending bought the western half of the country. It laid the railroads (Republican president) and built the interstates (Republican president.) Why have Republicans turned from prudent and productive growth policies to unproductive and stingy ones? Possibly because their large donors no longer feel invested in this country––they're not as invested because they bank in Switzerland and the Caymans and Bahamas and they don't pay the same percentage of taxes the rest of us do. Massive deficit spending for WWII hoisted us out of the last Great Depression, something FDR's more cautious deficit spending failed to do during the 30s.

Another medical analogy: imagine a patient comes into the ER. His heart has stopped. Austerity policies would say Do Nothing. Wait. Pray. The more Keynesian doctors would use a defibrillator to jolt the heart back to life. Austerity doctors would say that's a waste of electricity. We had an economy in 2008 and 2009 that needed a jolt. TARP gave that jolt but subsequent stimulus was blocked and watered down by Austerity believers, do-nothing purists. These foolish ideologues, BushThinkers, also steered most of the stimulus into the pockets of the perpetrators of the collapse rather than into the households that would have spent the money. The bankers who got it banked it. They sat on it. They didn't see enough opportunities for profitable investment so the money didn't enter the consumer economy where it would have created opportunities for productive investment.

We have a political reality that gives veto power to the big banks through their proxies in the Republican Party. So we do nothing. There is a tacit veto preventing help from getting to the households that most need it, who would quickly spend it and stimulate the economy, who would spend that money at stores down the street. What's happened instead is the Big Money people, the BushThinkers, have taken the American economy and buried it in their backyard, waiting for their private opportunity to exploit it profitably, but an economy dies when it's buried. The BushThinkers think there are only two ways to invest money: in their offshore accounts or on split second wagers on the movement of the markets. This oscillation between ancient economics and casino economics isn't good for us.

The other rationalization for the Republican Do Nothing Austerity Policy (and you've heard it recited over and over again by the hedge funders' Republican proxies in Congress) is that to deficit spend now would swell the national debt and place a burden on our children. Which sounds rational to households without any money... but it isn't. It's not what we do as a community. Republican policies begin and end with the individual and damn the community.

Scrooge has become the dominant philosopher of the moment. "Let them die then, and decrease the surplus population."

Don't deliver money where it's needed; deliver more where there is too much already.

Don't deliver help where it's needed; help the people whose houses are full of underpaid help already.

Don't feed the hungry; feed the well fed, feed the overfed.

Don't supply medical care to the unhealthy; insure the healthy, treat the healthy.

America needs to get its head around the basic and necessary logic of the public sector. The thinking that sends policemen and firemen and paramedics and soldiers and rescue personnel toward danger instead of away from it.

Our national wealth should help in an emergency rather than hiding under the bed.

The Republican mindset that is blocking our national recovery says "don't help" and "think only of yourself". This thinking is what is keeping us down right now. It is defunding every effort to lift us out of the ditch using community effort and community investment.

To say, as the Republicans say, and talk radio and FoxNews repeat endlessly, that using government spending to stimulate the economy would place an unbearable debt on our children, really is saying that the best way to protect our children's inheritance is to give our national wealth to the wealthy so they can put it safely in the Cayman Islands where it can lie safely idle the way the wealthy lie safely idle. They're saying that the best thing to do with our nation's wealth is to put it back in the hands of the people who wagered it foolishly prior to 2008.

What the Republicans are saying is "Austerity is a good thing for the poor." And we're all more poor than we were in the Clinton years.

Austerity, though, is like starving your children to protect their inheritance.

Whose inheritance is it? Are these Austerity economists really telling us to give that inheritance to them? Are America's grandparents deciding to spend their grandchildren's inheritance on themselves? Is there a feeling among seniors that the younger generations screwed things up and can't be trusted with spending money? The victims are not the perpetrators here.

Whose bad choices created this lousy economy? Do we really blame the very households the bad economy destroyed? Was it really the bad decisions of the wealthy bundlers and resellers of mortgages? Was it the predatory lenders? Was it the hedge funds who diverted investment away from productive categories into bizarre financial wagers? Was it the wealthy exporters of jobs, whose export of jobs is still subsidized by Bush era policies we haven't been able to end?

Was it the older generation of Reagan worshippers who decided the economy could be left unregulated? The same generation who voted themselves ample retirement but have decided to remove that prospect for their children and grandchildren? The same generation who now have free healthcare but seem happy to withhold healthcare from their children and grandchildren? We can understand their reasoning a little if we realize that once people retire they cease to be workers and become reliant on investments; their loyalties change. You could say they become different people, at once powerless and powerful. They exist in the pocket of their investment groups. They might not even be aware of the shift in their mindset. They're conflicted because they need government but they're owned by the bankers who manage their investments for them, and lobby Washington for them.

Meanwhile, because of the Republican veto of any sustained stimulus, the economy sits and waits. The generations who are still working, whose jobs are insecure, whose incomes have been flat since Reagan flattened workers' incomes, wait, and put off plans, and curb their spending, and worry. And the generation that has graduated and found its careers stalled since 2008, waits too. This last group may never recover because the generations who benefited from the long, sustained, secure and broad prosperity created by the policies of FDR, Truman, Eisenhower, JFK and LBJ, have spent their waning years supervising the dismantling of those policies and the degrading of the American economy. They decided to follow the wealthy speculators who sold the American economy and banked their gains offshore.

Inequality Is Bad For Us

In scientific tests animals reject inequality. So do children. Why do adults keep silent on it?

Maybe because the beneficiaries of inequality punish criticism. In grade school, teachers reward fairness. In the real world the controllers of income and markets reject fairness because they can get away with it, and they suppress dissent (as shown in this National Journal piece). They get away with it because they hold power. They hold us hostage because they have the money.

Joseph Stiglitz, one of our great Nobel Prize winning economists, says inequality is holding back our economic recovery. (Here's his piece in the NYTimes.)

Paul Krugman, our other Nobel economist, also liberal, doesn't disagree exactly but he doesn't see how Stiglitz's argument works out.

This is how liberal economists are different than conservative ones: they are skeptics. They demand you show them the math, which is not true of the economists who gave us the economic collapse.

Just ask Glenn Hubbard. (This Rolling Stone article does a good job dissecting his conflicts of interest.) He was one of the midwives of the economic crisis. He built the car that drove us over the cliff. He was a Bush economist while he was also earning money rationalizing what the large financial institutions were doing that caused the crisis. (Watch the documentary Inside Job if you want to see Hubbard talk himself into a corner.)

Closed systems that self-justify tend to make the same mistakes over and over again, and they do this because no matter what mistakes they make the people who run them find ways to keep their money and their power.

Krugman has a neat seven minute tutorial on inequality that's worth watching.

Inequality is not natural, it is not common sense, it is not good for us. It is, however, good for the people who keep telling us it's natural, sensible and good. Ask yourself this, what kind of a businessman works to impoverish his customers? That is what Reaganomics has done over the past three decades. The engine of any strong economy turns out to be workers who earn a good living. See Krugman's video above.

But now even conservative economic journals like the Economist are beginning to see the damage inequality does. For one thing it insulates the rich from negative consequences and healthy skepticism. It also is just bad economics on a fundamental level, never mind what economic yes-men say to their wealthy clients.

Inequality, I'm speaking of vast inequality like we have today, isn't fair, isn't inevitable, isn't natural, isn't sensible, and isn't a good thing. It's holding us back. It's even holding back the rich who think it benefits them. What would happen if our politicians understood this?

Krugman Explains the Ryan Plan

Paul Krugman points out the hypocrisy and dishonesty in Paul Ryan pretending to be a deficit hawk. But he also points out the eager gullibility and laziness of the Washington opinion writers and policy thinkers who are supposed to study and analyze plans like Ryan's. They haven't done this. All they've done is seize Ryan as a plausible "conservative" (which he isn't; he's a radical) and a thoughtful policy person (he isn't; he only pretends to be) with a substantive plan to attack the deficit (it isn't and it doesn't; quite the reverse, it makes the deficit much worse at the expense of working people, while slashing taxes on rich people who own stocks for a living, Friends of Mitt who have already profited enormously from the economic crisis.)

Ryan promises to share key details, crucial mathematics that his plan doesn't explain, at some unspecified future date. I've not seen such empty promises since Nixon's secret plan to end the Vietnam War. Nixon had no plan, and the war did not end until we surrendered Vietnam after he left office in disgrace. What Nixon did do (and it's similar to what Romney and Ryan and the other Republican leaders have been doing for four years) was sabotage LBJ's peace talks, promising the South Vietnam government a better deal if they refused to participate. There was no better deal. In similar fashion the Republicans in this Congress have spent four years sabotaging every effort to repair and restore the economy and their motives are the same: if they can foul the economic gears and talk about secret plans they hope to regain power. There is a word for this kind of cynicism: criminal. Another word comes to mind: treasonous. Like Romney's business model which made him a billionaire: buy companies promising to help them, loot their pensions, gut their employee pay and benefits, borrow heavily against the worth of the company, take enormous management bonuses, then send the shell of the company either to Asia or the bottom of Boston harbor.

Good Economics vs. Bad Economics-You Choose

It's time to choose sides. Despite what you hear on the money programs and from the Wall Street cheerleaders, there are very good economists who think austerity economics is a bad idea. Paul Krugman and Joseph Stiglitz, our most recent Nobel economists, are on the Democratic side of this argument, the side of the 99%. Others are stepping up too.

"On November 13th 2011, economists from the University of Massachusetts Amherst drafted an open statement to the Occupy Wall Street movement pledging their support. Since then, more than 250 economists from around the world have added their names. Read more at econ4.org "

To be fair, there are two sides to this argument. Having watched the documentary Inside Job, I know that some economists know exactly who butters their bread and it isn't working people. It's the people who now have all the money who butter their bread. Some economists are happy to tailor their ideas to suit their benefactors.

Then there are the mouthpieces for the 1%, who earn a lot of money just by being mouthpieces. For instance, there's Ann Coulter, who said recently that she thinks the horrible dirty worthless people of the Occupy movement should be gunned down by the police. It worked on the Vietnam protesters, she says.

Larry Summers, who led Obama's economic team, doesn't come off very well in Inside Job, but he is on the right side of the argument now, favoring aggressive stimulus and tax cuts to working people––instead of more billions thrown at the rich, at corporations and banks. He's no fool.

Concentrated wealth got us here. It made our economy topheavy and fragile. It sucked the life out of the consumer economy by making working people less prosperous and less able to make ends meet.

Our economy will only revive when working people feel prosperous again, confident that their jobs are secure, that their health and their families are secure, that their children have a future. We need to shift from the Reagan economics of concentrated wealth. Those economic policies promoted and exploited broad insecurity and vulnerability rather than broad prosperity and strength.

Today, more than 2 million Brits took to the streets to protest their government's austerity policy. What is Austerity? It's the rich elite's answer to global recession. "We have money so we get to buy. Everybody else is poor, so they should live that way."

AUSTERITY IS HOW THE RICH AND POWERFUL TEACH WORKING PEOPLE TO BE POOR.

That is where austerity measures bite. They bite the poor, the working people, the middle class who are getting poorer every year. Austerity bites the victims of the global collapse which was caused by the very rich.

In this country it's the Republican economic policy. They want most Americans to be a lot poorer, a lot less secure. When Americans are afraid they work harder and longer for less. That's the long term Republican goal. In the short term the Republicans simply want Americans to suffer, figuring an unhappy populace will vote for Republicans next year. They are happy for Americans to fail in order for Obama to fail.

Do you want to see what effect Republican policies have? Look at the map of the British austerity measures put in place by their Conservative government.

Austerity doesn't work during a recession. It hasn't before. It won't now. Imagine an airline pilot in a stalling aircraft. Does he see the emergency as an opportunity to save fuel? No. He pushes the pedal down and accelerates out of the dive.

Here are some sound commentaries from economists on the intelligent side of this argument, setting out the dire consequences of these ugly conservative policies. From EconMatters.com

From CNN

Here's Robert Reich's useful and persuasive debunking of the Republican austerity policies.

Sadly, cable television is dominated by a Republican network and talk radio is all Republican all the time. And a lot of Americans are easy to fool.

Today's Must Read-The Panic of the Plutocrats

Krugman won a Nobel Prize in Economics. So did Joseph Stiglitz. Why, instead, do Americans believe the stock speculator "experts" who dominate FoxNews and CNBC and CNN-Money? Krugman nails it again today. Now I know what the P stands for in GOP: Plutocrat.

What's alarming and disgusting is how much of our broadcast air is devoted to these Plutocrats, these puffed up aristos, many of whom have "earned" their fabulous lifestyles by speculating with mommy and daddy's money, playing with inherited wealth. America has changed in the past forty years from one that values and rewards work to one that worships and protects the few people with great wealth. Teddy Roosevelt called them "malefactors of great wealth". He was a Republican, but not today's kind of Republican.

The modern Republican Party caters to wealth. Working people don't have it. The financial system and the post-Reagan decline of the middle class has seen to that. The system has skewed so radically because of Reaganomics (the "trickle-down" fairy tale) to the point where owning is now more honored than working. Those who own stocks for a living pay a much lower tax rate than people who work. And anyone who doesn't like this is called a Marxist or a Hitler.

Nonsense.

The Wall Street protesters are protesting unfairness and the kind of Old World aristocracy America was created to get away from. (Think Louis XIV) We 99% are angry about the restoration of the Old World model––except for those still hypnotized by the Murdoch media. If the Tea Partiers would think about it, they belong to the 99% too. We have common cause.

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.