The Three Card Monte of Republican Tax "Reform"

Republican tax reform [sic] always means tax cuts, first of all.

Tax cuts means tax cuts for the rich, not for working people or the middle class, at least not significantly, and certainly not guaranteed.

So the Republicans negotiate a "Tax Reform" bill with Democrats, who demand that it contain some benefits for working people and the middle class, things that will help restore the economic balance, fixing the imbalances caused by the top-favoring of 35 years of Republican tax and labor policies.

After the bill is passed, if it is passed, there are mechanisms in the bill, put there by “strict budget disciplinarians” to claw back any benefits that are judged "unaffordable." (Insincere Sad Face)

These middle class benefits in the tax reform [sic] bill will be judged unaffordable when, quelle surprise, it turns out tax cuts do not actually result in revenue increases. So obligations to working people are always unaffordable and promises made to working people are always contingent and easily backed out of. Benefits to rich people are always sacred and guaranteed. This became true in the years since 1980 when Reaganomics became an American religion, a fake promise.

This fake promising is similar to the way back-end participation works in Hollywood: you are promised profit participation on the profits of a blockbuster film but these profits are carefully wiped out by the payouts distributed to the producers further up the food chain, after which there is seldom any left. (Insincere Sad Face)

It is also similar to the way Donald Trump’s many many independent contractors were left unpaid by Trump Inc. “Sorry. None left. Sue me.” (Trump doesn't pretend to be sad he can't pay, he just smiles.)

When this kind of scheme enables the Republicans in government to screw the working people and pay off the rich it has twin benefits (for Republicans): it makes the rich clientele very happy and likelier to share their booty in the form of campaign donations and lucrative jobs on retirement, while making working people hate government, which is the second most important objective of the Republicans, who hate government.

There is the phrase Republicans once used to demonize Democratic tax policy: the Two Santa Clauses. The Democratic Santa offers government help to the less fortunate. The Republican Santa offers tax cuts to the more fortunate, but also to the middle classes who feel the tax burden and buy the idea that lower taxes raise dividends.

But the Republicans have turned this on its head. They do deliver like Santa to the rich, but they also benefit by turning the Democratic Santa into a Democratic villain who demands taxes, who gouges the middle classes via taxes, and whose payout to the middle class and working people is unaffordable because the Republicans have already paid it out to their clients. And the Republicans make damn sure the taxes on Democrats rise every year as the taxes on Republicans go down, or at on least rich Republicans. When Republicans see their taxes go up they ALWAYS blame Democrats.

So the benefits of tax cuts and easy evasions and wonderful tax subsidies to the rich are ironclad and eternal whether the federal budget is fully funded or short of cash. Cuts are sacred and guaranteed.

Meanwhile the benefits to the people who work for a living are contingent upon how well the budgets balance out, similar to the way Trump screws his contractors and film companies screw the less preferred classes of producers and profit participants. The phrase “Sorry, but we can’t afford it” is often used. And the middle class being screwed understands the phrase. It's too familiar. It's a part of the game.

The rich are entitled to their tax free ride because their entitlement is figured out first. Once they’ve eaten their fill the leftovers are counted out for the less rich and there is seldom enough left to fulfill those obligations.

Again. Rich entitlements are sacred and guaranteed. Payouts always begin at the top.

Working class entitlements are contingent and often reneged on. The way Trump screws the people he hires. The way the rich have screwed working people for centuries.

Promise and fail to deliver. This is done in a planned and deliberate way.

This ritual doesn’t stain the rich who ate all the working class entitlements (who demanded to eat those entitlements, who demonized those entitlements in careful ways over recent decades) it stains the government, helping to teach generations of working people that government is not to be trusted., that government is a thief, that government is the enemy.

After all, it was the government who stepped in and began passing laws to hoist the workers out of permanent poverty. That is how the rich learned to hate government: because it was a better Santa Claus than the rich employers were who tossed out niggling scraps at Christmastime but screwed the poor the rest of the year. The rich needed to make their benefits immune from workers’ hatred and opposition and needed to kill the liberal/progressive Santa Claus of government, who was more than a gift giver, he was also a Superman, a hero, a protector, a guarantor of fair play in the economy. Fair play was and is anathema to the rich and their Republican agents.

The High-Low On The American Economy

Here’s what Robert Reich had to say this morning about exorbitant executive pay in America:

"Exxon Mobil chief executive Rex W. Tillerson is delivering bad news to shareholders: Profits were down 63 percent in the first quarter financial results, announced yesterday. They were down by half in 2015. Low petroleum prices have forced Exxon Mobil to cut spending, reduce capital outlays, and borrow to meet dividend payments. This week Standard & Poor’s downgraded the corporation’s credit rating.

"But don’t cry for Tillerson. He’s scheduled to retire next March with a nest egg of $218 million in Exxon stock plus a pension plan worth $69.5 million. His salary this year alone is about 500 times the median U.S. household income.

"Even when big corporations and their shareholders lose, their CEOs seem always to come out winners. Isn’t it time CEO pay was capped at, say, 100 times the income of the median household? Shareholders should set this standard, and the government shouldn’t allow a company to deduct any executive pay in excess of $1 million. Alternatively, as I've suggested before, tax corporations in proportion to the ratio of their CEO pay to the typical U.S. worker's pay."

The Washington Post reports on how the CEO of EXXON earns many millions whether the company has a good year or a bad year. How fair is that?

The departing CEO of Yahoo! (is that company still around?) is being paid $55 million to go away.

How we got to where we are now: The Washington Post reports on how "high finance" thinking has warped our values and our policies.

What makes it worse is how our policies are shaped by Big Money and their lobbyists and superPACs. These forces are far more powerful than organized labor, which is shrinking every year, more powerful than the Republican controlled Congress, which the lobbyists carry around in their pocket. Bloomberg reports on how hard the US Chamber of Commerce has pushed our tax policies to the extreme.

This disparity in power is more significant than the disparity in pay. Americans have bought into the myth of Rugged Individualism, that each of us is better alone than as a part of a group. (Because groups are communist…unless it’s the American Legion or the Rotary or the Chamber of Commerce.)

This is a distortion of American tradition. The tradition of barn raising and helping your neighbor, of standing together the way the original colonists did, despite their differences. This idea of individualism has helped the 1% reduce the voice of the rest of us to nothing. It has persuaded millions of working Americans to rush to get the anti-union bargains at Walmart. It has organized the workers to break up the unions that won their parents a middle class life.

Salon explains the rise of individualism and the decline of America's sense of teamwork.

Meanwhile, at the high end of the economy the members of the owning class are paid more in an day than ordinary workers are paid in a year. Some are paid that much every hour.

The Wall Street Journal reports that CEOs now make 373 times what average workers do.

If you wonder why healthcare keeps costing you more, look at the multi-millions their CEOs are paid each year.

At the low end, working people get next to nothing. Millions of low end jobs don’t pay a living wage, so people have to work two jobs, and the workers are subject to rampant wage theft. Still, Republicans block every proposal to raise the minimum wage.

The Wall Street Journal, the favorite newspaper of America's 1%, published a story blaming the sluggish growth in the U.S. economy on the refusal to raise working people's wages. After 30 years of suppressed wages and nothing growing but CEO salaries and investment bubbles you'd think it would be clear that economic energy doesn't come from the people who spend at Cartier and the local Jaguar dealership, it comes from the broad spending of ordinary working people...when they have enough money to spend.

Even the middle class is feeling insecure, a story told in this month's Atlantic.

But the working poor and the unemployed have it much worse.

Why not do what the Republican gods Hayek and Friedman both proposed: have a guaranteed minimum income for all Americans? Why not? Because people who earn money from their money, who own for a living, dislike anything that shares their luck with other less fortunate people. The people who own for a living don’t want to give anything to the people who work for a living. VOX explains the idea of a guaranteed minimum income and how it would work.

The rich are always discussing how they wish the poor were better people. Who really needs to fix that problem? The rich do. They are extremely lucky but they believe luck had nothing to do with it. If they were reminded where their fortunes came from they might be less arrogant and less greedy. They might become better people, to the benefit of all of us. Robert Frank (author of the new book Success and Luck: Good Fortune and the Myth of Meritocracy) discusses this at VOX.

Cognitive Dissonance

Many Americans drive around and see prosperity. Nice shops, nice houses, nice communities. It’s a pleasant sight––but it’s not their life. If you are prosperous and feel your prosperity is secure this is nice and reassuring. Life is good! If you are financially insecure or you have friends or family who are struggling it isn’t reassuring at all. How many of those you see walking and driving amid all the visible prosperity see it as an insult or a threat: “These people are fine and I am not.” Narrow prosperity is all show, and the system––the economy, the justice system, money-based politics, even the larger churches––only serves and protects the few. The economy is increasingly excluding working people from prosperity; for them these visible riches are an insult. We watch the affluent on TV and read about them in glossy magazines. Is this entertainment? They are not us and we will never be invited to their party. We have become the pathetic figures in old movies, the ones pressing their noses hungrily to the window of the restaurant watching others eat. This set piece from old movies is the one that comes just before the hungry individual throws a brick, or a bomb. Vast inequalities are a recipe for violence. But before the violence erupts where we live we spend years ignoring how dysfunctional and impractical and inefficient these disparities are.

After a few decades of Kiss Up, Kick Down economics, the kicked may begin to hit back. Here are some relevant stories from the NC News Observer, The Guardian, The Washington Post and Salon.

In NC black voters are required to take a spelling test to vote; whites aren’t.

In FL the anti birth control crowd think that elementary schools and dentists and podiatrists can fill the gap created by their shutting down reproductive health centers.

The burden of taxes removed from the lucky people who own for a living is shifted onto the people who work for a living in the shape of penalties and fees, which are compounded if they haven’t got the ability to pay.

Want to start a new business? Better be rich.

Before you eat that shrimp cocktail realize that it’s probably the product of slave laborers.

Did The Lewis Powell Memo Create This Mess?

History unfolds from hinge moments. I have been wondering lately about the Lewis Powell memo and what larger things have unfolded from it. If a private memo is a small thing consider its effects if it galvanizes far greater powers and undoes important precedents.

Did the Powell memo (and the doctrine that it made) make corporate and wealthy America immune to their obligations to society, enabling them to levitate away from tax obligations and the necessary support and protection of institutions and infrastructure and the environment? Did it enable them to hoist (permanently, it appears) the justice system and the financial apparatus out of the reach of the vast majority of Americans? Did it then enable the justice system and financial system to be reorganized to prey on the wider population rather than serving it? (Granted, the law has a recurring habit of acting to protect property from people, to become an instrument of property without a primary obligation to people.)

Did the Powell memo make corporations and the belief system of wealthy Americans immune to inconvenient science? Did it make science subservient to the profit imperative? Did the Powell memo obligate all businesspeople to ignore and defy any science that might diminish their profits? Not just reverse their profits but cut into them. Did the Powell memo lead to the mindset that made the profit imperative the single obligation, the only sacred idea?

I got on this train of thought after seeing the story this morning where NASA scientists are now convinced climate change will unfold more suddenly and devastatingly than previously thought. That is moreso than we were previously led to think by the corporate deniers. I began to think how colossally stupid we’ve become in the space of a few decades. What was the off button on the American genius? I think it was the Powell memo’s assertion of money, overruling intelligent discourse. (The assertion of what I’ve called Moneythink on my blog. A dangerously corrupt and corrupting philosophy, if you can call it a philosophy.)

Business and Money and Markets and Corporations and the whole apparatus of our financial side used to obey basic norms to correct folly and regulate the “animal spirits” that cause problems. Those regulators were turned off subsequent to the assertion of corporate power and veto that followed the Powell memo.

One chief example of a useful regulator that was turned off is the insurance industry, which was bought and harnessed by large financial companies and told to make its functions serve the profit of the larger company rather than do its job, which was to place a cost on risks. The insurance business didn’t raise the costs of insuring harbor facilities or coastal properties or the longer term risks climate change represented to our agricultural infrastructure (civilizations are based upon reliable climate, and our civilization is therefore at high risk.) The insurance industry was told to keep its mouth shut and to tailor its charges for risk to suit the profit demands of the shareholders and the corporate parent, which probably was investing decades of premiums in very profitable fossil fuel investments.

If nothing else, the Powell memo gave Money a veto over Reason. It allowed the shareholder class to veto the warnings of scientists in the matter of climate change and to veto the legitimate demands and grievances of people who work for a living because they might limit the return on investment to people who own for a living. The only loyalty was to return on investment, no other obligation mattered. That was the central justification for Lewis Powell’s memo which evolved into a fiat: that concentrated money ought to assert the deciding vote on all of our public decisions, because money had a better brain than people did. This breathed legitimacy into the ludicrous Citizens United ruling that stated Money = Speech. And the similarly ludicrous Bush v Gore decision that stated that equal protection required the Court to intervene to protect the interests of George W Bush from irreparable harm by the voters who had voted against him. Money and patronage (the values the Powell memo places uppermost) were again the pollutant in that decision: how many of the justices who stepped in for Bush Jr. were appointed by Bush Sr.?

Once you make Money immune to intelligent discussion you give it control over the public conversation. Which is why we have a billionaire of low cunning dominating one of our political parties right now. Who are we non-billionaires to question his right to rule us? We have learned not to embarrass Money with difficult questions. The galvanizing moment in Ronald Reagan's presidential run came early, when he faced down the annoying challenge of some journalist, saying: "I paid for this microphone!" Except he hadn't. General Electric and a few decades of other corporate sponsors had. Reagan had been employed as their spokesmodel. He was the political incarnation of Lewis Powell's memo.

Are we all to blame? We voted for Reagan, and all his works and all his ways. We liked him. Half of us still worship him even though he presided over the theft of our prosperity via Reaganomics. He organized the redirection of wealth from the many to the few. Money isn't speech, but it can buy a lot of it. And it can buy the likable voice of an aging actor. Money isn't speech any more than Money equals thought or intelligence. By delegating more of our decisions to our money, which the Lewis Powell memo urged, we stopped thinking. And that is why we are surprised to learn the oceans will rise and there is no longer anything we can do about it. Maybe that is also why a handful of billionaires are using their tax-immune billions to build personal rocket ships.

David Brooks, the Explainer of the Working Class

Today’s Fun Facts. How deeply unfair has the American system become? Read on.

Libertarianism is an invention of a mischievous corporate cabal. It’s about their liberty not yours. Read and Learn Here.

David Brooks: “Bernie Sanders doesn’t get the working class…” Priceless omniscience from Brooks can be enjoyed here.

And David Brooks understands the working class completely. Like God. Underneath that smooth expensively suited Brooksian facade is a true working man, complete with sweat, weariness, worry about paying the mortgage, fears about some venture capitalist looting his pension, concern about his kids’ lives being poorer than his own. Yeah, Brooks is the working man personified. He knows that the triumph of the working man will only come when he realizes his interests are best served by following instructions. People who work for a living are meant to serve the people who own for a living.

Here ends the Gospel.

Why democracy isn’t working has something to do with the antidemocratic unAmerican concentration of wealth and power. Learn more here.

Kiss Up. Kick Down. The Series Continues.

The richest man in Congress explains that poor Americans are the envy of the world. (From CNN Money)

Being Rich is a Game. (From Gawker) (Several years ago I considered turning The Rule of Accumulated Advantage into a board game. I realized only rich attractive people whose parents have powerful connections would want to play it, and decided to price it at $5 million dollars per game.)

This pundit at Jacobin Magazine seems to be looking at the inequality problem with his head turned sideways. Interesting though.)

The Republican Congress wants to tell poor people what they can and cannot eat. (from Wonkette)

Billionaires are advising poor working people to learn to live like the poor people they are. (BlueNationReview) (The rich are so tactful.)

Does this surprise anyone? (CommonDreams reports how the rich don't care about jobs.)

At a certain point, the rules that favor the rich enable them to levitate, tax-free, obligation-free, no strings attached. (from FirstLook)

The rich meanwhile get us to pay their costs of doing business. (From The Guardian)

Really bad ideas that favor a small fraction of Americans (if any) can gain traction if there is a lot of money behind them.

For Profit Prisons are a huge growth sector. (from Alternet)

The rich don't experience failure like the rest of us. (The New Republic) Again, they're immune.

Is it all of our own making? (Robert Reich thinks maybe it is.)

One thing that makes the rich eligible for all the breaks and the perks is this Republican mythology that tells us they're simply better at everything, more competent, more hardworking, more careful, wiser, more honest. And when their party rules the economy it does better. Well, it ain't true. (from Salon)

The Final Sorting

We are distorting the way our economy works, refashioning and refitting it to serve fewer people and thereby cutting more people out of it. The rich are behaving in a completely predictable way. The more we pay them the more they want, and every desire is quickly turned into a basic need.

(I wrote about this over a decade ago and nobody thought it was worth discussing.)

For the rest of us every basic need is redefined an expensive option, a remote "maybe", something we’re not entitled to.

It’s gotten to the point where the word “entitlement" is used as a pejorative term. We, who work for a living, are no longer entitled to anything. And the small minority of people who own for a living are entitled to everything.

We need to relearn what history taught us. We can allow people to grow rich, but being rich must bring obligations too. (Here's a good history lesson about this from the Washington Post. Anybody remember Magna Carta? We should have learned something from how England created its democracy.)

The bad old days were barely a century ago. (Does anyone remember the Ludlow Massacre?) We earned a better living standard the hard way. Our parents and grandparents got fed up and changed things. They organized, and elected a president who believed they had the right to be organized. That has been undone since.

In the past thirty years this has all been taken away and we have let it be taken away.

The Rich Live Larger And Longer Than You And Me

I read an interesting article at the Atlantic and it got me thinking...

The core philosophy of the Republican Party these days is that a problem only exists if you spend money on it, meaning tax dollars, meaning THEIR tax dollars.

If you stop spending money trying to solve poverty (or the healthcare crisis) the problem ceases to exist.

In the mind of the Republican Party, poverty is only a problem because solving it costs rich people money they’d rather spend on another home in another tropical tax haven or on another corporate takeover.

If you stop spending money to alleviate poverty or the ill health of poor people the poor will go away and die and solve the problem more cheaply and therefore more efficiently.

As Scrooge said “Let them die then and decrease the surplus population.”

Why the American public doesn’t find this repugnant is a mystery until you realize that vast wealth also buys a lot of PR, a lot of network time, or, in the case of FoxNews, a whole network. (The Koch Brothers now hold a partial veto power over programming on PBS because they help fund it.) The .1% own most of the media.

The rich are not necessarily fascists, but they benefit from fascist policies so they often aren’t inclined to oppose them. It takes time out of their leisurely existence. Those who donate to liberal and progressive causes are to be applauded. They are acting against their own financial interests, just as the rural poor are voting against theirs, but what use are so few in the face of so many?

There is a meme going around that suggests that poverty is caused by the poor. You hear this on right wing talk radio.

Oddly enough, it’s true. In a way not quite captured by the right wing meme.

The poor who listen to right wing radio and watch FoxNews and nod obediently are helping deepen their own poverty and ignorance and ill health, by cooperating with the rejection of ObamaCare and by disbelieving science, by obeying their masters, by voting for Republican candidates who perpetuate their powerlessness. They are not stupid people, even though they are behaving stupidly. They are ignorant, not stupid. They may not even be ignorant, just ignorant of their predicament. They have been conned and are now invested in that con game, too embarrassed to admit it, because admitting you were tricked is harder than losing what was stolen from you in the process.

You have to reach a very low point before you admit you did something dumb, and, luckily for the Republican Party, most of the poor people who vote for them would rather die first.

Rich Vs. Poor

Keep the poor busy trying to stay alive and they don’t have time to keep you from robbing them.

Here's an interesting NPR story about this syndrome. It's real and has become the dominant living model in the U.S. Poverty makes us easier to impoverish.

This is why people who need help to stay alive are asked to jump through hoops and pee into cups. Workers who see the many who are worse off are far too busy keeping their bosses happy to consider asking for more. It’s too risky and who has the time?

And what do the rich get out of it? Unhappiness they can’t buy a cure for. Scientists have been studying this. All these unhappy rich folks have is the satisfaction of knowing they’ve made thousands or millions of others more miserable than they are.

Silly, isn’t it? It’s worrisome that the most powerful individuals in our society are irrational. Perhaps insane. Maybe even dangerous.

There is a rhetorical device called reductio ad absurdum. Taking the idea to its absurd limits. Just for the sake of argument. Or for shutting argument off.

One person making more in five minutes than his average worker makes in a year? That is absurd, but it’s become commonplace. And it isn’t enough for the person who’s making more in a day than his secretary will earn in a lifetime. He wants more. He earns a decent annual income on one visit to the bathroom. His workers have to punch out to use the bathroom. His retirement package will probably include free dry cleaning for life and lifetime use of an office boy for whatever he likes office boys to be used for. Firewood perhaps.

When money or power or validity is reduced to absurd levels in the large masses of people and increased to absurd levels in a handful of lucky ones at the top, absurd things happen. Things are bad now, but they could get worse. Most of us are worthless, in the current valuation, and a few people who own sweatshop factories and are able to get the taxpayer to feed their workers for them are gods. Absurd.

Then anything becomes possible. When your lords and masters can do what they wish with you, you need to worry about what they are wishing for. Especially because power and wealth makes people insane. Consider what people tell us about the supreme ruler of North Korea. This story may not be true, but, as the Daily Telegraph says, impossible things are happening all the time.

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?

Vast Income Disparity is Bad for Business (Someone Tell Mitt)

In yesterday's New York Times, Annie Lowrey wrote about new findings by the International Monetary Fund economists (not a radical or lefty bunch by any means), laying out the clear and present danger the current disparity in incomes and wealth presents to the American economy and the global economy.

This is what the president was addressing during the debate the other night, and Romney was denying. Romney has built his fortune on the basis of income inequality, squeezing pay and benefits out of company after company, loading them with debt and looting pensions to enrich his small group of investors.

Turns out it's bad for business and bad for the broader economy––no real surprise––because employees of one company are the customers of other companies. It doesn't help the economy when one man's wealth is derived from another man's poverty. It's against the American grain.

Lowrey writes:

Since the 1980s, rich households in the United States have earned a larger and larger share of overall income. The 1 percent earns about one-sixth of all income and the top 10 percent about half, according to statistics compiled by the respected economists Emmanuel Saez of the University of California, Berkeley and Thomas Piketty of the Paris School of Economics.

For years, economists have thought of such inequality in part as a side effect of policies that fostered the country’s economic dynamism — its tax preferences for investment income, for instance. And organizations like the World Bank and the I.M.F., which is based in Washington, have generally not tackled inequality in the world head on.

But economists’ thinking has changed sharply in recent years. The Organization for Economic Cooperation and Development this year warned about the “negative consequences” of the country’s high levels of pay inequality, and suggested an aggressive series of changes to tax and spending programs to tackle it.

The I.M.F. has cautioned the United States, too. “Some dismiss inequality and focus instead on overall growth — arguing, in effect, that a rising tide lifts all boats,” a commentary by fund economists said. “When a handful of yachts become ocean liners while the rest remain lowly canoes, something is seriously amiss.”

But it's worse than "Oh well, bad things happen to some people". Maybe the investor class that is backing Governor Romney will pay attention when the numbers people spell out how their pet tax cuts and cozy pay deals actually harm their outlook. Shouldn't businessmen be concerned when their own behavior is bad for business?

The concentration of income in the hands of the rich might not just mean a more unequal society, economists believe. It might mean less stable economic expansions and sluggish growth.

That is the conclusion drawn by two economists at the fund, Mr. Ostry and Andrew G. Berg. They found that in rich countries and poor, inequality strongly correlated with shorter spells of economic expansion and thus less growth over time.

And inequality seems to have a stronger effect on growth than several other factors, including foreign investment, trade openness, exchange rate competitiveness and the strength of political institutions.

And the kicker...

“What worries me is the idea that we’re in a vicious cycle,” said Joseph E. Stiglitz, a Nobel laureate in economics who has studied inequality extensively. “Increasing inequality means a weaker economy, which means increasing inequality, which means a weaker economy. That economic inequality feeds into political economy, so the ability to stabilize the economy gets weaker.”

Unfortunately, wrongheadedness is a habit with some people. Paying taxpayer funded tribute to rich people is a behavior that's hard to unlearn. It took a long time to convince people the world isn't flat.

Why Income Inequality is Bad for Business

There's a very good, straightforward and powerful explanation of the importance of economic fairness in today's StarTribune, written by David Morris.

Income inequality as it exists in the U.S. today, an extreme inequality which the Republican Party is sworn to continue and increase, is bad economics, very bad for business, bad for the future of private enterprise, bad for our health, bad for our children and grandchildren, downright stupid when you measure its effects on education, and (today being Sunday, maybe we should consider this) it turns Christianity on its head. Why do these "super-Christian" and supposedly pro-business Republicans support policies which undermine everything they stand for? My explanation? It's a shell game, a trick, a sham, a con game. To use a phrase popular in the South "They'd climb a tree to tell a lie." They don't give a damn about the things they trumpet in speeches and commercials. Their loyalty is to money in their own pockets and power in their own hands.

One of the chief lies they tell is this: Democrats who favor greater income equality want everyone to earn the same. This is untrue. What we want is a return to the system which functioned well during the longest prosperity in American history, the period between the New Deal and the inauguration of Reagan, a period when workers' earnings rose as a companies profits rose. Since Reagan it's all been taken apart. Since 1980, the American Dream has been narrowed to the upper classes, to people who own stock for a living rather than working for a paycheck. They forget, and would like Americans to forget, that prosperous working people are the engine of a strong economy. Republicans treat them like the enemy.

Too Big To Arrest?

From the Atlantic comes a timely discussion of the stupid rule that reads (I'm paraphrasing) "if you steal billions of dollars in a complicated way without getting sweaty it's not a crime". Why do really big thieves always get away with it? Answer? Magic. What a victim doesn't understand can't be a crime. Amounts so big a policeman, a hundred policemen, can't count them can be stolen with impunity.

And from Business Insider, this list of the most egregious severance packages. CEOs who screw up aren't fired exactly. They are given so much money they have to leave their jobs to count it. Ordinary employees are lucky to leave fully clothed.

If a they can hire an 8 year-old cheaper your employer will fire you, but they will let a CEO lose them billions and keep him around. If they don't keep him around they will pay him millions to ease his embarrassment and theirs. Why is it if you protest without a permit you are beaten up, if you steal $100 you end up in prison, but if you steal a billion you are rewarded? There is very little proportionate justice. Very little justice at all. Nobody gets what they deserve especially those con artists who steal billions. It makes you want to punch someone or sue someone or see someone perp walked but the ones you want to see perp walked are immune. You've heard of Too Big to Fail. They're also Too Big to Arrest. So the victims are left to take out their frustrations on each other.

As J. D. Hackensacker III said “That's one of the tragedies of this life: that the men most in need of a beating are always enormous.”

(Those of you who don't know who J. D. Hackensacker III was should get acquainted with the films of Preston Sturges.)

The Gingrich World of Aristocrats and Serfs

There's a very cynical calculation that goes through every Republican mind, a dollar calculation. If you're a rich Republican it's how long and hard you can get people to work for how little and how little you can get away with paying in Lincoln's hated income taxes on the earnings your underlings are sweating out for you. If you're a poor Republican you obviously can't do calculations.

John Nichols of The Nation magazine converted Gingrich's calculation about poor children and "overpaid" school janitors to a simple equation using Gingrich's income as a metric. What it boils down to is plain fat ugly rich man's greed and prejudice.

Nichols summation of Gingrich Mathematics is worth posting wherever you post things: "Even in a party where cruelty is now considered a political virtue, there is something unsettling about a man who collected $30,000 each month to offer an hour of historical counsel to Freddie Mac administrators attacking elementary and secondary school janitors who, according to fresh Bureau of Labor Statistics data, earn a mean wage of $13.74 an hour, or $28,570 per year."

So Newt, who earns $30,000 an hour to "advise" bankers and financiers about history thinks school janitors are overpaid. In the old way of things Newt imagines he would have been one of the overseers on a horse watching his peasants till his land, and his peasants' children too, preferably peasants of a different color and owned instead of paid.

In Gingrich's world of aristocrats and serfs with government regulations and taxes happily out of the way, we get back to the world that our Founding Fathers fought the revolution to overturn. The nasty brutish world of European aristocracies and poor people who fled in ships to these savage shores. This country wasn't founded to evade taxes or to "liberate" the rich. Those who think taxes are evil actually think society is evil, or are rich enough to think society is unnecessary. George Washington thought otherwise when he mounted an army to collect taxes from recalcitrant citizens in western Pennsylvania. Education? Jefferson left his presidency off his tombstone but included his founding of the University of Virginia. (He had no grand plans for making poor students work as janitors.)

Thomas Paine had this to say about citizens' obligations to the public good. He took a dim view of the very rich, of people like Gingrich and his clientele:

"All accumulation, therefore, of personal property, beyond what a man's own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came."

Lizz Winstead (the creator of the Daily Show, who by the way grew up in my neighborhood) takes a shot at laughing Gingrich out of the race. Which may be unwise. He's such a monster we could do worse than keeping him around.

6 WalMart heirs worth as much as 30% of all Americans

From Salon comes this news: six wealthy WalMart heirs aren't just "rich" they are worth as much as the bottom 30% of the American population combined.

I will pause to let your head get around that obscene statistic. Six people who don't need to work for a living are worth more than 90 million working class people combined.

Why are rich people a protected species?

What's worse is that poorest 30% of Americans are forced by circumstances to shop at WalMart. Sadly the poor don't see ironies and the rich find them amusing.

A friend just sent me this piece from The Nation, detailing how uncharitable old Mr. Walton was, and how his heirs, while philanthropic, tend to be generous towards PACs and front groups who do what the Walton family wants, to help make the Walton family even richer. Even self-serving "generosity" is tax deductible, so in a sense we are all doing the Waltons' bidding. Concentrated wealth is a positive evil.

Vast Income Inequality Has Its Fans

When each new economics report comes out telling us that the extremely rich have again taken more of the pie and more of the people who do the work are falling into poverty, Wall Street's paid apologists go on TV and lend pithy quotes to columns for the Wall Street Journal.

These apologists are wrong but they manage to hide behind a lot of manipulated data. It isn't unfair to compare their song and dance to one of those three card monte tricksters on street corners, the guys who always win your money. The very rich always win because they use the same kinds of tricks. The money gets manipulated out of working people's pockets into the pockets of the people who win the game. Is it still theft when it's billions of dollars instead of tens and twenties? Let's just say it's complicated enough that it's harder to prosecute. The New Republic's Timothy Noah and Jonathan Chait and economist Brad Delong explain it much better than I do.

MarketWatch: The rich continue to get much richer while everyone else is poorer.

Business Insider: The middle class was losing ground even when the economy was good.

Business Week: the social contract is unraveling in developed countries because of extreme income inequality.

From the Guardian: looking at the data. It isn't pretty, unless you are one of the handful of lucky winners. Imagine a lottery that rewarded winners with money stolen from you...

Think conservatives are pro family? This Guardian writer says "think again".

If you think poverty is all right as long as you have your health, consider that the poorer you are the shorter your lifespan. This BBC report shows this is even true in the UK where access to healthcare isn't restricted to people of means as it is in the US. Is this pro-life? No, it's only pro-life for the wealthy.

The Atlantic has the charts and graphs. Having had personal experience with their rigorous fact checking department I know they are reliable.

Want to see where the big money is? Look here, at the website of the Paris School of Economics.

The 1% Is Fine, Thanks For Asking

The New York Times headline reads "Top Earners Doubled Share of Nation’s Income, Study Finds". The story will spoil your lunch.

The Washington Post reports the same results under a different headline: "Nation’s wealthiest 1 percent triple their incomes, according to CBO report." The Times didn't want to upset the mandarin class too much. Double sounds less unfair than triple.

Either way the upper upper upper class is eating our lunch. And breakfast and dinner. Maybe the message is that once you are so very rich it doesn't matter whether your income tripled or doubled. Who can keep track? Poor them, with all that income to sort out. What a headache; let's give them some more tax breaks to help them deal with it.

Another thing that's making lives more unequal is that so much more of the government's "help" is dished out to people who don't need it but just heard it was available. Imagine if rich people demanded equal access to food stamps. Rich farmers and big farmers get more relief than poor and small farmers. Big companies get more help than the small businesses who stand in as the poster children of the Chamber of Commerce (which has been screwing them for decades.)

The financial rescue was supposed to help all of us, but notice who butted to the front of the line. The too-big-to-fail banks and financial companies and major corporations (many of whom, like GE, have bigger financial services sides than their old manufacturing sides) hogged it all. They are hoarding trillions, refusing to share it, pay it out, invest it or use it to hire people or order inventory.

They are using it instead to give enormous bonuses to their tip top people. Goldman Sachs reported a $393 million loss this past quarter, but that's a fraction of the $10 billion bonuses it will pay to its executives for delivering that loss. Go figure.

Never mind, it doesn't compute. Heads they win, tails they win. The 1% always win, the 99% always lose. At least since Reagan changed the rules.

Income Inequality is Killing Us

This short TED lecture by Richard Wilkinson is worth watching and sharing. You might want to pause the video, as I did, to look more closely at the graphs. The TED lecture series is wonderful, a great place to learn from the best minds out there.

I like Professor Wilkinson's statement at one point, looking at a graph on upward mobility: "If you really want to live the American Dream I suggest you move to Denmark." I don't remember who he was quoting. Income inequality is killing us, but it's also making us miserable while we're alive. This is what is putting people into the streets.

Richard Wilkinson is an epidemiologist and professor at Nottingham University, and founder of the Equality Trust.

Violent Suppression of Peaceful Wall Street Protesters

Lawrence ODonnell gives a rightly angry eight minutes to analyzing the brutality police are meting out to protesters in the Wall Street Occupation movement. He does a judicious and intelligent job of it.

International Business Times posted this short video. Captured from the street, it illustrates the smug amusement of the haves for the hapless on the street below. Drinking champagne and laughing, as if they know the police are working for them.

From the Nation, a welcome rebuke to the New York Times' embarrasingly biased article. The Times sent a columnist instead of a reporter and she casually cherry picked a few odd protesters, using them to discredit the whole movement and its grievances. I've not seen a balancing story from the Times. The Guardian has, so far, done the best job of covering the protests. Here's a good piece in the Guardian by Amy Goodman.

High and Low

Why is our economy so miserable right now? Americans work harder, longer, for less money. Where have the fruits of increased productivity gone? Look up.

As this article in the Guardian reports, CEOs are getting paid big money. It's even bigger when they fire more people (and pay less––or nothing––in taxes.)

Which may explain what's happening to the people in the middle. Middle class workers are becoming extinct. How do we know? Corporate planners are no longer planning for the middle class consumer. New products are aimed at the rich and the poor. High and low. The Guardian has noted this trend, as has the Wall Street Journal.

The middle class is a shrinking market, and it's shrinking because of policies pushed by business and their political allies. For the past twenty years companies have been offshoring jobs––helped by "conservatives" in Washington. For thirty years they've been killing unions. Corporations with cash are buying out competitors and firing their workforce. It's a downward spiral. What's strange is the way millions of American workers are collaborating with their own degradation. And how is it good for business for consumers to have less money to spend?

We are becoming Mexico, Columbia, Nigeria. We are becoming a "Banana Republic", thanks mostly to Banana Republicans. And it isn't the store. It's much less pleasant.

Look at Rick Perry's Texas. The job growth he's touting has a worrisome pattern. The Guardian has a story today on the nature of those new jobs. They pay poverty wages.

The other jobs Rick Perry "created" in Texas, the ones paying a decent livable wage, are government jobs, the kind of jobs Republicans normally hate.