Conservatives say they want to "bring back" the old USA, the one that existed during those decades of the twentieth century they only seem to see through a gauzy golden haze. Whatever its problems, that country was a place where Republicans and Democrats agreed on two simple principles: That the most fortunate among us should pay their fair share, and that our government must invest in the nation and its future.
When Rick Perry says he wants to bring back "the America I where I grew up," he's talking about the era when Dwight D. Eisenhower, a Republican President, built the Federal highway system. One of the reasons Eisenhower was able to do that is that the top tax rate was much higher than it is today. While today's highest marginal today is 35 percent and capital gains are taxed at only 15 percent, the highest tax bracket was 91 percent the year Rick Perry was born.
Whenever I talk about tax brackets I'm attacked by right-wingers who say I don't understand, that high taxes discourage job creators. They'll say things like "You hippies just don't get it! If taxes are too high rich people will stop working and investing. The Job Creators will go away!"
Well, I do get it. When I was spent a student year in Great Britain the top marginal tax rate was 102%. Once a person reached a certain level of income, they had to pay more in taxes than they earned. And a few years before that, George Harrison made a compelling case against the 95 percent tax bracket on the Revolver album by singing "Taxman." (The line is "that's one for you, nineteen for me." I make that a 95 percent marginal tax rate, but you can check my math if you like.)
So I'll come right out and admit it: Taxes can be too high. But that doesn't answer the biggest question of all: What's the ideal top tax bracket? Where can we set the percentage so that it provides the most revenue for the Federal government without discouraging high earners from making more money?
Thanks to a new and very thoughtful paper by economists Peter Diamond and Emmanuel Saez, we have the answer: 76 percent. That's right. The most effective top tax bracket in this country, the one that will provide the most revenue for the Federal government, is 76 percent. Know what that means, ladies and gentleman of Washington DC ? That's the rate that will cut the deficit the fastest.
But for those who believe that protests are only worthwhile if they translate into quantifiable impact: the lack of organizational sophistication or messaging efficacy on the part of the Wall Street protest is a reason to support it and get involved in it, not turn one's nose up at it and join in the media demonization. That's what one actually sympathetic to its messaging (rather than pretending to be in order more effectively to discredit it) would do. Anyone who looks at mostly young citizens marching in the street protesting the corruption of Wall Street and the harm it spawns, and decides that what is warranted is mockery and scorn rather than support, is either not seeing things clearly or is motivated by objectives other than the ones being presented.
What’s important about this protest, to my mind, is not the particular goals, tactics or supporters. While the protest itself has drawn criticism or indifference from many corners, it illuminates two important points. First, the financial sector in this country has been taking up a larger and larger share of the economy as the rest of us have fallen further and further behind. Second, the big banks and investment firms who helped cause the crisis and the recession haven’t been fully reined in or held accountable.
That matters, and people around the country get it. We talk to thousands of Americans in their neighborhoods every week, and they understand the real-life effects of Wall Street’s outsized power: the failure of the economy to create good jobs at good wages, the powerful influence of corporations in our politics, the difficulty of keeping a roof over your family’s head.
However, I think it is also worth noting that this movement provides a great opportunity for progressive organizations, talkers … well to organize around. The amazing narrative being threaded by these protesters against Wall Street greed and corruption seems to be right in the wheelhouse of traditional progressive groups who have always spoken up against too much money in politics.
During the debt-ceiling dust up, Congressman Darrell Issa (R-CA) claimed the U.S. deserved a downgrade if Congress didn't slash spending down to the bare bones. He also claimed the August 2nd date for raising the debt-ceiling was meaningless.
However, Issa doesn't mind turning a profit and availing himself much of government largesse to do so. As he votes and argues for deep cuts to government spending (and jobs) for all of us, he's doing a wonderful job of lining his own purse.
Even as he has built a reputation as a forceful Congressional advocate for business, Mr. Issa has bought up office buildings, split a holding company into separate multi-billion dollar businesses, started an insurance company, traded hundreds of millions of dollars in securities, invested in overseas funds, retained an interest in his auto-alarm company and built up a family foundation.
As his private wealth and public power have grown, so too has the overlap between his private and business lives, with at least some of the congressman’s government actions helping to make a rich man even richer and raising the potential for conflicts.
He has secured millions of dollars in Congressional earmarks for road work and public works projects that promise improved traffic and other benefits to the many commercial properties he owns here north of San Diego. In one case, more than $800,000 in earmarks he arranged will help widen a busy thoroughfare in front of a medical plaza he bought for $10.3 million.
As tempting as it is to answer the title question with the words "Rick Scott", it goes back farther than Scott and paints a picture of what this country would look like if Republicans were able to win back the Presidency in 2012. Three stories today highlight Florida's decline.
Education
Florida's school voucher program was a Jeb Bush special, passed in 2006. Five years later, the Miami New Times is taking a close look at some of the "results". The goal of the voucher program was to give more "school choice" to parents of disabled children, but it appears to be a program that isn't regulated, has few standards, and lines the pockets of corrupt businessmen.
While the state played the role of the blind sugar daddy, here is what went on at South Florida Prep, according to parents, students, teachers, and public records: Two hundred students were crammed into ever-changing school locations, including a dingy strip-mall space above a liquor store and down the hall from an Asian massage parlor. Eventually, fire marshals and sheriffs condemned the "campus" as unfit for habitation, pushing the student body into transience in church foyers and public parks.
[...]
Meanwhile, Brown openly used a form of corporal punishment that has been banned in Miami-Dade and Broward schools for three decades. Four former students and the music teacher Norris recall that the principal frequently paddled students for misbehaving. In a complaint filed with the DOE in April 2009, one parent rushed to the school to stop Brown from taking a paddle to her son's behind.
"He said that maybe if we niggas would beat our kids in the first place, he wouldn't have to," the mother wrote of Brown. "He then proceeded to tell me that he is not governed by Florida school laws."
The school received over 2 million dollars between June 2006 and November 2010 that could have been spent on public schools, with no oversight. Read the entire article. It's worth the time.
This is privatization at work. Take public funds, turn them over to for-profit entities for the purpose of accomplishing a public purpose. The problem, of course, is that profit-making and the public good do not always make harmonious partners.
So I was watching a CNN panel today and the subject up for debate was something along the lines of, "Is Obama shedding constituents? Critics say he's abandoned Wall Street."
My first reaction was, "Wait, critics are saying this? Are you sure that wasn't what his allies said?" But no -- I actually had to listen to a debate over whether Obama was making a huge political mistake by "abandoning" his bestest pals in the world at the megabanks.* You know, the guys whose greed and irresponsibility caused the worst financial collapse since the Great Depression.
(*Obama hasn't actually "abandoned" the banks in the least, but that's a story for another post.)
And then I thought, "Why the hell are we the only culture in the whole goldurned world where it's seen as a political risk to abandon the people who are responsible for causing widespread economic hardship?" And all this got me thinking about the super-weird "We-Must-Be-Nice-to-Rich-People" doctrine that has run through our national discourse since the 1980s.
You see, there was a time when American politicians could say things such as "It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes" (Andrew Jackson) and "Too much cannot be said against the men of wealth who sacrifice everything to getting wealth" (Teddy Roosevelt) and "We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering... They are unanimous in their hate for me — and I welcome their hatred" (FDR) and no one thought anything of it. Indeed, as Simon Johnson and James Kwak show in their excellent book 13 Bankers, hating on financial oligarchs is as American as hating on soccer, dating all the way back to Thomas Jefferson.
But starting in the 1980s, Ronald Reagan began popularizing Randroid mythology about how rich people were necessarily our betters because they were the only ones capable of "creating wealth" in the economy.
(For some reason, Big Ron forgot to mention they were also capable of creating multi-trillion-dollar housing bubbles, overpriced Pets.com stock certificates and made-to-fail synthetic interest rate swaps that bankrupt entire counties.)
And ever since then, every Democratic president and politician has had to reassure members of our elite media that he's just as capable of kissing rich-guy keisters as the Republicans. If you want a prime example of this dynamic at work, check out this Washington Post piece (via Harper's) that places giant red warning lights over Paul Krugman's views but that quotes some sleazeball Wall Streeter as though he were a perfectly objective analyst. First, his take on Krugman:
When you read Krugman on economics, you need to read him through a filter. He believes that the $787 billion government stimulus approved last year was not enough to really kick-start the economy and that much more is needed. You can correctly read many of his columns -- including this one -- as arguments for more taxpayer-funded stimulus. So just know that.
And now, the equity strategist:
I started with Peter Boockvar, equity strategist at Miller Tabak.
My e-mail was short: "Double-dip or slowdown?"
His response was equally abrupt: "Depends on who wins Nov. elections and what taxes get hiked in 2011."
The tax cuts enacted by President George W. Bush expire at the end of this year. President Obama has proposed extending those cuts -- except for families that make more than $250,000 a year. If Republicans win Congress in November, it's a good bet that the wealthiest Americans will keep their tax cuts. If the Democrats hold the Hill, it's unlikely.
"Our fragile economy CANNOT handle any tax hikes whatsoever, particularly on capital and the income of those who invest, save and spend the most," Boockvar wrote, meaning those American families that make more than $250,000 a year. The all-caps are his, but the feeling is shared by many.
Now, I'm of the general mindset that it's daft to raise taxes or cut spending in the middle of a severe economic downturn. But at the same time, note Boockvar's emphasis on whose taxes we should really be opposed to raising: "Those who invest, save and spend the most." In other words, people like Peter Boockvar.
I personally find it highly unlikely that if Mr. Boockvar's taxes were to rise back to the level of the 1990s that he'd suddenly lose all will to work and would instead spend his remaining days sipping Purple Drank outside his local 7-11. People like this are generally addicted to making money and they'd sell penny stocks and junk bonds to special needs children if they thought they could get away with it. What Mr. Boockvar would have written if he were being honest was, "I've already put off buying cocaine and pricey call girls enough during this recession and I CANNOT handle any tax hikes whatsoever."
And that's where we are. Despite the fact that our banking oligarchs destroyed the entire financial system and were only saved from homelessness by the United States government, they still must be treated as "special" people who are "the only ones" capable of creating new jobs for the lesser people. It'd be nice if this particularly insidious piece of mythology were to be sent to the ashcan of history, but methinks it's going to take some time...
Not to get all Shock Doctrine-ish on you or anything, but this interview in the Washington Post got my attention. It represents the very worst that could possibly happen to us all...Republicans winning back the House of Representatives and naming John Boehner as Speaker of the House.
Take a stroll with me through Speaker Boehner's world.
If the GOP were to gain the upper hand, and Boehner were elected as speaker, the question is what he and his party would do with that power. Boehner listed three priorities. First, he said, was a renewed commitment to fiscal discipline -- a test his party badly flunked the last time it was in the majority.
Now, fiscal discipline means different things to different people, but to John Boehner it means something like this with regard to financial regulatory reform:
"This is killing an ant with a nuclear weapon. There are faults in our regulatory system, some in terms of transparency, most as a result of ineffective enforcement by the bureaucracy who have no idea what these financial products look like today.
In Speaker Boehner's world, everything that just took place in our financial markets is the fault of the regulators, not the abusive practices of the industry itself.
This is because Speaker Boehner is the handmaiden and poster child for corporate ownership of politicians. There's a list here of his 2009 Gold donors -- those giving the maximum to his PAC in addition to his campaign committee. Among them: KochPAC, CapitalOne Financial Corp PAC, Bank of America Corp PAC, etc. etc. The list goes on and on.
But let's move on to Speaker Boehner's next agenda item:
Second, he said, was to engage in "an adult conversation with the American people" about the need to rein in entitlement spending.
So...that would be spending for things like Social Security and Medicare? Because, well...it's good to starve seniors and let them die? Who was it who invented death panels again? Oh right...Republicans.
And the final agenda item for Speaker Boehner is a kinder, gentler kind of bipartisanship. Seriously.
And third, he wants to increase bipartisan cooperation in the House.
This is so laughable I'm speechless. Watch the video at the top of this post for an example of the Boehner flavor of bipartisan cooperation. It's a little bitter, and a whole lot hot.
But he does elaborate:
Boehner said there will be plenty of disagreements with the White House if Republicans are in charge of the House. But he added: "A lot of scar tissue's been built up, by both parties, over the last 10 years. It needs to be solved for the long-term good of the country."
Too late for that. The cat is out of the bag and it meows repeatedly: Speaker Boehner wants to cut open the old wound, pour some salt in it, roll it around and then administer poison to the dying patient.
Lest you feel I'm too harsh, I'm glad to report that Speaker Boehner has some kind thoughts for everyone who supported that public option and thinks the health care reform bill stinks without it:
He was explicit about health care. "We believe that the health-care bill needs to be repealed and replaced," he said. Beyond saying Republicans would scrub the budget for wasteful spending, a pledge regularly made and ignored by politicians of both parties, he offered no examples of what programs Republicans would actually cut.
That one needs a translation, too. "Repeal and Replace" really means "Repeal and Die."
And finally, Speaker Boehner wants to remind us all that the nasty rancorous tone of the debate is all Barack Obama's fault.
Boehner also said Obama bears considerable responsibility for the poisoned politics in Washington. "I remember all the conversations with the president about post-partisan politics. He's done nothing to solve that. I remember all the conversations with the president about working in the middle. None of that. It wasn't about the specifics about this, that or whatever. It's about the overall direction he's gone. He has not lived up to his promises."
But it's the President who has killed bipartisanship. Beam me up, Scotty.
(If you're committed to denying cryin' John Boehner the Speaker position, Justin Coussoule can use your support. He's running a sharp campaign in Ohio against Mr. Tobacco Lobbyist Speaker wannabe.)
A while back there was a popular Twitter hashtag regarding "Sarah Palin Perfumes" so I photoshopped a few of the better ones. Several Tweeters came up with "In What Respect Charlie"; click here for "Amber Greed," "IQ One" and "Stupid," the spraying of which is at least one thing she does liberally.
Do you ever get the feeling that the Earth is screaming? That's what it feels like to me. Our short-sided policies and greed have already caused so much damage, and it's possible this time we've simply gone too far. Pray, cross your fingers, send good thoughts that this plug works:
If BP fails to plug its ruptured offshore oil well, intense underground pressure would be enough to pump vast quantities of thick brown crude into the Gulf of Mexico for months, even years.
If even BP’s backup plans fail, it would cause a pollution disaster "heretofore unseen by humanity," said one expert.
It is this rapidly accelerating realization that is giving BP’s attempt Wednesday to cap the well new political and environmental urgency.
The worst-case scenario is hoped and believed to be a continued flow of 5,000 barrels per day, and by some estimates vastly more, until August, when BP completes “relief wells” to intercept the damaged well.
But, experts say, there are no sure things when operating equipment a mile under the water and 13,000 feet below the ocean floor.
Professor Tad Patzek, who heads the Department of Petroleum and Geosystems Engineering at the University of Texas-Austin, gives the relief well a 90 percent chance of success. But he’d rather not consider the other 10 percent.
“As a petroleum professional, I don’t even admit the possibility that that might be possible,” he said when asked about a failure to stop the flow. “That would be an environmental disaster of a caliber that was heretofore unseen by humanity.”
Patzek estimates at least 20,000 barrels of oil and an equal amount of gas would flow daily for years from the reservoir, which he estimates to hold roughly 50 million to 100 million barrels.
