David Cay Johnston's "Free Lunch"

If you want to understand the disease that is rotting away the American democracy, this is one of the best books to read. It walks you though case after case of financial corruption that is rife throughout the political system in the US. It isn't about politicians being bribed. It is about how the power of the ultra-rich has corrupted the political process so that they get a "free lunch" through subsidies, tax loop holes, unmonitored regulations, tax audits that never happen, etc.

He traces this corruption mostly from when Reagan took power and systematically destroyed the counter-weight to the political power of the rich. But he also sees evidence of corruption going back further. In fact, he does mention how it has been in civilization from the beginning. But he sees the golden era for an America where the common people got dealt a fairly good deal as running from FDR up until the mid-1970s. But the corruption of politics has gone on since the 1970s through both Republican and Democratic presidencies. And it has gotten worse with time.

Here is the theme of the book that is worked out through example after example of the rich pocketing a free lunch:

It's been nearly 30 years since Ronald Reagan asked, "Are you better off now than you were four years ago?" and tens of millions of American voters responded with a resounding no.

With their votes the citizenry fired not just one unpopular and unlucky president but granted the new president, and eventually his party, broad authority to reconstruct the relationship between the government of the United States and its economic system. By overwhelming numbers, middle-class, well-to-do, and wealthy voters agreed that the economic malaise of the seventies -- inflation, skyrocketing energy costs, deficits, high unemployment -- was the sour fruit of a half-century of government interference with the "invisible hand" of the nation's market-based, capitalist economy.

The promised solution was to get government ouyt of the way -- to let business operate largely free of public oversight in the form of government pgorams, rules, and regulations, or at least with a lot fewer of them. The voters agreed to let the "private sector" of companies, corporations, associations, and charitable organizations take over a smany of the duties of government as practical. "Government is not the solution," Reagan famously declared as the battle cry of his revolution. "Government is the problem."

So it is only reasonable nearly three decades later to ask a new question: Are we better off than we were a generation ago?

...

Yet despite all this success in hard dollars and improved product quality, for the vast majority of Americans the answer as to whether they are better off is again, almost three decades later, a resounding no.

The gross numbers and averages about economic growth obscure one overwhelming truth: The benefits of this bonanza flowed overwhelmingly to those at the apex of the economic pyramid. The base of that pyramid has weakened as average incomes have shrunk and more risks were forced upon them by government policies that favor those at the top.

For the bottom 90 percent of Americans, a group we will refer to as the vast majority, annual income has been on a long, mostly downhill slide for more than three decades. The vast majority's average income peaked at $33,000 way back in 1973. By 2005 it had fallen to a bit more than $29,000. Even with three decades of economic expansion, the vast majority has to get by on about $75 less each week than it did a generation earlier, tax return data show.

While the book is concerned with presenting case after case of a systemic bias toward the ultra-rich in this Reagan "revolution", the items that catch my eye are the general principles. For example, this discussion of the role of government versus "free enterprise":

Individual purchases can make things worse, not better, as shown by our history with fire insurance. There was a time in this country when people paid commercial fire companies to protect their property. But instead of replacing lost property, as we do today, these policies insured that firefighters would fight any fir at hour home or business. A problem arose when the house abutting yours caught fire. If that owner had paid a different fire company, or none at all, your fire company would not put out the blaze even though it was a threat to your property. Only when your building was ablaze was your fire insurance company obligated to act -- and that could be too late. That system died when we recognized that fires are a public problem, not a private one. Our solution was to have government provide fire-protection as a public service. People relinquished having their choice of fire-fighting companies, but saw that government monopoly on fire-fighting service saved far more lives and protected property much more efficiently than the market did. Accident and illness are, like fires, public and social problems, not individual ones, that are mostly efficiently treated as public service.

In America we do not speak of police insurance, or education insurance, or when vacationing at the seashore, ilfeguard insurance. Rather we pay taxes for police, education, and lifeguard services because these are essential services for a civil society.

Here is David Cay Johnston with an example of how Bush shoveled the public's money to rich drug companies via his prescription drug bill:

One key provision prohibited the government from enegotiatin for the lowest possible prices. Negotiating for low prices when buying in bulk is standard practice. That is what Veterans Affairs does. That is what every business owner does. So does every other industrial nation for their universal health care plans for their citizens. Negotiating for the lowest price would seem to be an obvious choice for those in both parties who talk about running government like a business, promising voters that if elected they will work tirelessly to replace waste with efficiency.

The corporatists say that negotiating for lower drug prices was an abuse of government power. They called negotiating a euphemism for government price controls. And they said it would mean less money to invet in new drugs, delaying advances in pharmaceuticals.

To the peoplists, the ban on price negotation was a stealth plan to make the drug benefit so costly it would cause the whole system of socialized medicine for the elderly to collapse. This political paranoia was not without some basis in fact.

Here is Johnston's assessment of the thirty years of Reagan revolution:

We now have almost three decades of experience with the idea that markets will solve our problems. The promised results are not there and there is no reason to believe that they are over the next horizon, just a few more subsidies away. Electricity costs more and its delivery is less reliable. Many hundreds of billions of tax dollars have been diverted to the rich, leaving our schools, parks, and local government services starved for funds. Jobs and assets are going offshore, sometimes to the detriment of not just the economy, but national security.

What Johnston didn't know when he published his book in 2007 was that the deregulation and lax regulation of banking and real estate was about to explode in the 2008 Great Recession. No better proof of the moral bankruptcy and money-besotted corruption behind Reagan's "revolution".

Johnston has a very simple solution for the malaise brought on by "free lunch" mentality of the Reagan revolution:

... we created a nation of laws, not of men. We set forth the principles for this bold experiment in 52 words whose eloquent wisdom we too often forget:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Belessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

These concepts inform our guideposts: Society, Justice, Peace, Security, Commonwealth, Freedom. What did not make the list was a purpose of our nation? Individual riches. That we may each become rich, if we choose and luck is with us, is a by-product rather than the purpose of our system of government.

Yet for more than a quarter century, we have acted as if economic gain is the great purpose of government.

This is an excellent book to make you aware of the depth and breadth of corruption in America. The corrosive ideas of right wing ideologues has nearly destroyed the country. Sadly, despite the Great Recession, the message has not gotten through. The public gave the Republicans a majority in the Congress in the 2010 mid-term elections. Democrats and Republicans continue the charade of concern for "waste and fraud" while shoveling taxpayer wealth to the ultra-rich through tax cuts, deregulation, loopholes, special "laws", pork barrel politics, etc. It has to end. The longer it takes, the more ravaged the economy will be and the longer it will take to crawl out of the hole, the cesspit, created by the "free lunch" mentality.