Selling Social Darwinism

Robert Reich has a blog that is well worth following. He is a knowledgeable person with the facts and the social empathy to present an honest account of the situation that the 99% find themselves in.

Here is his latest post:

The Republican Myth of Obama's "Entitlement Society"

One of the few things Mitt Romney and Newt Gingrich agree on is that President Obama is turning America into “European-style welfare culture.”

In his standard stump speech Romney charges Obama with creating a nation of dependents. “Over the past three years Barack Obama has been replacing our merit-based society with an entitlement society.”

Gingrich calls Obama “the best food-stamp president in American history.”

What’s their evidence? Both rely on federal budget data showing direct payments to individuals shot up by almost $600 billion, a 32 percent increase, since the start of 2009.

They also point to Census data showing that 49 percent of Americans now live in homes where at least one person is collecting a federal benefit – Social Security, food stamps, unemployment insurance, worker’s compensation, or subsidized housing. That’s up from 44 percent in 2008.

Finally, they trumpet Social Security Administration figures showing that the number of people on Social Security disability jumped 10 percent in Obama’s first two years in office.

They argue our economic problems stem from this sharp rise in “dependency.” Get rid of these benefits and people will work harder.

They have cause and effect backwards. The reason for the rise in food stamps, unemployment insurance, and other safety-net programs is Americans got clobbered in 2008 with the worst economic catastrophe since the Great Depression. They and their families have needed whatever helping hands they could get.

If anything, America’s safety nets have been too small and shot through with holes. That’s why the number and percentage of Americans in poverty has increased dramatically over the past three years, including over a third of families with young children.

One scandal, for example, is that only 40 percent of the unemployed qualify for unemployment benefits because they weren’t working full time or long enough on a single job before they were canned. The unemployment system doesn’t take account of the fact that a large portion of the workforce typically works part time on several jobs, and moves from job to job.

Republicans also object to Obama’s health care law, which covers 30 million more Americans than were covered before. But it still leaves over 20 million without health insurance. They’ll get emergency care when they’re in dire straights — hospitals won’t refuse them — but we all end up paying indirectly.

Regressive Republicans pretend they’re about opportunity. In reality they’re back at what they’ve been doing for years — promoting Social Darwinism.

Go read his blog.

The manipulation of statistics to sell their Social Darwinism is utterly cynical. The political right knows that it is lying. It isn't naive. But it trusts in the big lie technique. They know that if they repeat their right wing lies long enough and through enough media, most people will assume it is true because the message is so prevalent.

I remember being incredulous when I matured and discovered that my father believed that if something was printed it had to be true. In his mind, nobody would go to the expense of printing something unless it was true. I could never change his mind. He proved to me just how effective a propaganda campaign could be. He lived a life believing falsehoods simply because "they were printed" and I could never change his mind because my arguments were "just words" and he refused to look at the printed material I presented to him. Propaganda can be very, very effective.

Quote of the Day

Here is a snippet from the book Debt: The First 5,000 Years by David Graeber, a book with an endlessly fascinating take on money, debt, and markets over the long history of civilization:

Another way to look at this might be to say that the new age [1450-1971, the Age of Great Capitalist Empires] came to be increasingly uncomfortable with the political nature of money. Politics, after all, is the art of persuasion; the political is that dimension of social life in which things really do become true if enough people believe them. The problem is that in order to play the game effectively, one can never acknowledge this: it may be true that, if I could convince everyone in the world that I was the King of France, I would in fact become the King of France; but it would never work if I were to admit that this was the only basis of my claim. In this sense, politics is very similar to magic -- one reason both politics and magic tend, just ab out everywhere, to be surrounded by a certain halo of fraud

I highly recommend Graeber's book for an alternative analysis of money, debt, and markets. You may not agree with his analysis, but he will help you broaden your understanding through his deep understanding of anthropology/history deeply rooted in 5,000 years of human civilization.

Tilting at Windmills

Here is Robert Reich, ex-Secretary of Labor under Clinton making a call from the political left for people to take back control of their government from the corruption of money and power by corporations and the ultra-rich.



Sadly, it looks like the plutocrats have got things pretty well sewn up and only if there is real revolution with blood in the streets will the clock be turned back to a true republic. The US over the last few decades has passed over the Rubicon and like the age of Imperial Rome, there is a pretense of "republican" government, but the real control is in the hands of very few, very very rich people. There is no going back. There is only collapse and decay in America's future. I've given up any pretense of optimism. Dark days are ahead.

Selling Black is White, Up is Down

Here is a bit from a post by Robert Reich that nails the big lie that the political right in the US is selling to gullible electors:

Mitt Romney is casting the 2012 campaign as “free enterprise on trial” – defining free enterprise as achieving success through “hard work and risking-taking.” Tea-Party favorite Senator Jim DeMint of South Carolina says he’s supporting Romney because “we really need someone who understands how risk, taking risk … is the way we create jobs, create choices, expand freedom.” Chamber of Commerce President Tom Donahue, defending Romney, explains “this economy is about risk. If you don’t take risk, you can’t have success.”

Wait a minute. Who do they think are bearing the risks? Their blather about free enterprise risk-taking has it upside down. The higher you go in the economy, the easier it is to make money without taking any personal financial risk at all. The lower you go, the bigger the risks.

Wall Street has become the center of riskless free enterprise. Bankers risk other peoples’ money. If deals turn bad, they collect their fees in any event. The entire hedge-fund industry is designed to hedge bets so big investors can make money whether the price of assets they bet on rises or falls. And if the worst happens, the biggest bankers and investors now know they’ll be bailed out by taxpayers because they’re too big to fail.

But the worst examples of riskless free enteprise are the CEOs who rake in millions after they screw up royally.

Near the end of 2007, Charles Prince resigned as CEO of Citgroup after announcing the bank would need an additional $8 billion to $11 billion in write-downs related to sub-prime mortgages gone bad. Prince left with a princely $30 million in pension, stock awards, and stock options, along with an office, car, and a driver for five years.

Stanley O’Neal’s five-year tenure as CEO of Merrill Lynch ended about the same time, when it became clear Merrill would have to take tens of billions in write-downs on bad sub-prime mortgages and be bought up at a fire-sale price by Bank of America. O’Neal got a payout worth $162 million.

Philip Purcell, who left Morgan Stanley in 2005 after a shareholder revolt against him, took away $43.9 million plus $250,000 a year for life.

...

But as economic risk-taking has declined at the top, it’s been increasing at the middle and below. More than 20 percent of the American workforce is now “contingent” – temporary workers, contractors, independent consultants – with no security at all.

Even full-time workers who have put in decades with a company can now find themselves without a job overnight – with no parachute, no help finding another job, and no health insurance.

Meanwhile the proportion of large and medium-sized companies (200 or more workers) offering full health care coverage continues to drop – from 74 percent in 1980 to under 10 percent today. Twenty-five years ago, two-thirds of large and medium-sized employers also provided health insurance to their retirees. Now, fewer than 15 percent do.

The risk of getting old with no pension is also rising. In 1980, more than 80 percent of large and medium-sized firms gave their workers “defined-benefit” pensions that guaranteed a fixed amount of money every month after they retired. Now it’s down to under 10 percent. Instead, they offer “defined contribution” plans where the risk is on the workers. When the stock market tanks, as it did in 2008, the 401(k) plan tanks along with it. Today, a third of all workers with defined-benefit plans contribute nothing, which means their employers don’t either.

And the risk of losing earnings continues to grow. Even before the crash of 2008, the Panel Study of Income Dynamics at University of Michigan found that over any given two-year stretch about half of all families experienced some decline in income. And the downturns were becoming progressively larger. In the 1970s, the typical drop was about 25 percent. By late 1990s, it was 40 percent. By the mid-2000s, family incomes rose and fell twice as much as they did in the mid-1970s, on average.

What Romney and the cheerleaders of risk-taking free enterprise don’t want you to know is the risks of the economy have been shifting steadily away from CEOs and Wall Street – and on to average working people. It’s not just income and wealth that are surging to the top. Economic security is moving there as well, leaving the rest of us stranded.

Go read the whole post.

Pundits like to push the idea that "you get the government you deserve". But the reality is that the average voter doesn't have the time or resources to follow the political fluff thrown at him and sort the wheat from the chaff. When a corrupt political party like the Republicans in the US (and to a lesser degree the Democrats) deliberately sell a false message, it is very hard for the average person to uncover the truth.

One of Mitt Romney's Houses

He's got a $12 million house in California and all he wants to do is tear it down and build a bigger and fancier house!

Crystal Balling America's Future

Blogger The Big Picture has a post that notes that five years ago the Wall Street Journal had an article by Robert Frank clearly identifying the brave new world of "plutonomy" that the US, UK, Canada, and Australia were entering.

Exactly 5 years ago today, the WSJ published this post (Plutonomics) about a rather fascinating study on wealth inequality.

It was written by of all folks, Citigroup global strategist Ajay Kapur. In 2005, Kapur’s research team “came up with the term ‘Plutonomy’ in 2005 to describe a country that is defined by massive income and wealth inequality. According to their definition, the U.S. is a Plutonomy, along with the U.K., Canada and Australia.”

What are the basic characteristics of Plutonomies? According to Kapur:

1. They are all created by “disruptive technology-driven productivity gains, creative financial innovation, capitalist friendly cooperative governments, immigrants…the rule of law and patenting inventions. Often these wealth waves involve great complexity exploited best by the rich and educated of the time.”

2. There is no “average” consumer in Plutonomies. There is only the rich “and everyone else.” The rich account for a disproportionate chunk of the economy, while the non-rich account for “surprisingly small bites of the national pie.” Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

3. Plutonomies are likely to grow in the future, fed by capitalist-friendly governments, more technology-driven productivity and globalization.

Kapur also noted the impact massive income and wealth inequality had on other aspects of the economy: Savings rates, national debt level, spending patterns, reaction to high commodity prices, and more. All of these, he claimed are substantially affected by the ultra wealthy.

Note that this was from 5 years ago today — circa January 2007 was, ten months before the market peaked, 11 months before the Great Recession began, and 15 months before Bear Stearns, 21 months before Wall Street (AIG BAC C FNM LEH, etc.) collapsed, and about 55 months before Occupy Wall Street began.

Quite fascinating . . .

It is worth your time to go read the entire Robert Frank post in the WSJ. I haven't read his upcoming book The High-Beta Rich: How the Manic Wealthy Will Take Us to the Next Boom, Bubble, and Bust but I've got a hold on it at the library and expect to be entertained and appalled.

Here is a different Robert Frank, this is Robert H. Frank who teaches at Cornell University in a PBS Newshour interview with Paul Solman:



If you listen to 8:00 into the above video you find an interesting straddling of the middle. He argues from the right for the value of the free market and from the left for the importance of government in regulating the market and ensuring a fair playing field. (Funny, this isn't Darwinian. This is Adam Smith who has been misconstrued by the political right to be only the "invisible hand" guy when, in fact, he very much appreciated the role of government in helping to establish the possibility of a market.)

Don't confuse the Robert Frank who writes for the Wall Street Journal with the Cornell professor. Both have something interesting to say, but they are two different voices, but unfortunately with the same name.

As for America's future, it will succeed only if it gets off the destructive path that is creating a more and more unequal society and gets back to something more like the 1950s and 1960s when the middle class bloomed, America was prosperous, and the future looked unlimited. The future requires a more pragmatic politics that isn't dogmatic right or dogmatic left. It needs a politics that overthrows the idiocy of Reaganism and that overthrows the idiocy of a nanny state. The US needs a renewed robust middle, a real middle class, and a real political middle.

An Honest Assessment of the US's Federal Reserve

From a post at the Eschaton blog:

If this really is the Fed's view, then they're saying that monetary policy is generally going to be utterly useless in fighting recessions as they won't be willing to do anything. Time to rewrite all the textbooks. As in, instead of the usual "fiscal policy is less likely to be useful during recessions due to lags in recognition, implementation, and impact" claptrap, we should have "monetary policy is unlikely to be useful during recessions due to the fact that modern central bankers are sociopaths whose only concerns are inflation and the economic wellbeing of the creditor class."

It is clear that all central banks are more concerned about the creditor class than the debtor class. The tragedy of the 2008 financial crisis is that central bankis have shown themselves more dedicated to ensuring the wealth of the rich than the economic well-being (jobs, houses, retirement, education, etc.) of the bottom 99%. Sad.

The Story of America

The great middle class society known as "America" is dead. Dead as a dodo. Buried by the "greed is good" 1980s and the glorification of "me first" family values of the political right over the last few decades.

Here is a nice summary by Bob Lefsetz in his blog The Lefsetz Letter:

What Happened To My Country?

My father was a real estate appraiser.

He started out as an engineer, but that lasted less than a year, he wasn’t an ass-kisser, he couldn’t play the game, he was bounced out.

So he opened a liquor store and tried his hand at commercial real estate. Unsuccessfully, because he didn’t have enough money to purchase property.

Trying to improve his lot in life, he relocated the package store next to an exit by the newly-finished I-95, otherwise known as the Connecticut Turnpike. And when redevelopment hit Bridgeport, his friend Maury Magilnick said no one knew as much about local real estate as my dad, and if he became an appraiser, he’d hire him.

My father spent a week at UConn. Another at the University of Chicago. He got licensed. And with his engineering background and his natural acumen he became a legend in the state, Attorneys General feared him, and my dad garnered the income of a doctor or a lawyer, he sent three children to private universities and graduate schools.

That dream is dead today.

I’m in Vail, Colorado. My family started skiing when I was ten. Used to be an egalitarian sport, you saw Beetles in the parking lot, sandwiches were de rigueur in the base lodge, brought from home. Skiers were not the upper crust, they were us.

No more.

So I’m riding up the lift with a fourth year medical student. I ask him what he’s gonna be.

"An anesthesiologist."

Why? Because he loves it? No, because he can make good bread and vacation and live the high life.

I’d like to tell you I met some musicians on the lift, some regular people, but I kid you not when I tell you the only people I met were in finance. Oh, and there was one dentist.

They traded for the family account. They were "consultants". They worked for hedge funds. They had their own private ski instructors, at $700 a day. They were the 1%.

And everybody in America is scrambling to get into the club.

That’s what’s wrong with the music business. The executives want to be as rich as the bankers, they too want to fly in private jets and tip with hundred dollar bills. What is the right tip these days? For a ride through town? I’m thinking $20, because the bankers have driven up the rate and the employees expect it and they’re struggling to make ends meet.

I grew up in the sixties. We were all in it together. Sure, my dad told me to be a lawyer, so he didn’t have to worry about me, but instead of taking the LSAT, I went to Montreal. There were no corporate recruiters on campus. Life was about personal fulfillment.

But now life is about money.

Either you’ve got it or you’re struggling to get it.

That wannabe anesthesiologist? He’s a Republican. He doesn’t want socialized medicine and he doesn’t want taxes.

Nobody wants taxes. Everybody thinks life is a personal struggle, that there’s no common infrastructure, no freeways, no police department, no power utility.

What’s mine is mine.

And if you don’t watch out, I’m gonna take yours.

No wonder musicians sell out to the Fortune 500. They too want to be rich. But the joke is upon them, they can never be that rich, the corporations laugh at them, they’re pawns in their game.

We live in a completely duplicitous country where no one’s honest, no one does what he believes in, everybody’s just motivated by the money.

And the problem?

PUBLIC EMPLOYEES!

Those teachers ruined the economy. Hell, you can barely make it on a teacher’s salary, you can’t vacation in Vail, Colorado, you’re closed out.

And somehow we accept all this. We shrug our shoulders and say it’s the way it is and will always be.

Why?

I feel like I’ve been asleep for thirty-odd years. While I was pursuing my dream, everybody else was pursuing the dollar. Reagan made greed legitimate and the baby boomers filled that hole and now their kids want more of the same. They just want to play on their hand-helds and feed at the trough. No one wants to innovate, they just want to get rich.

Ever speak to someone in finance? It’s a rare bird who likes it.

They do it for the money.

And with this money they buy up those concert tickets so you can’t get a good seat. They’ve got a shortage of time. When they get to the amusement park, they want to close you out. Get concierge treatment, cut the line…and you think this is okay because you think you’re gonna be rich too.

Ain’t that a laugh.

At least at Middlebury I saw what rich was.

Most people can’t afford a private college education any longer. 50k a year? Hell, public education keeps going up and up. Most people never even get into the game they think they’re gonna win.

There’s a ruling class, pulling the strings, and you’re not a member.

This is not a Democratic or Republican issue. This is a money issue. Money’s corrupted the system. You’ve got to be on the take to get elected. So you’re beholden to the corporations, not the people.

But you’ve read Steve Jobs’s biography and you think you’re gonna make it.

Don’t you get it? The odds of music success are infinitesimal, all the things you want most musicians haven’t got, a house, a spouse, kids, health insurance…

Don’t be angry with me.

And don’t be angry with the music business titans, keeping you out. They’re just worrying about themselves, they don’t care about you, they just want to live in a gated community and vacation where you aren’t.

They’re revolting in Russia. And they overthrew the government in a bunch of Middle Eastern countries. And if you don’t think it can happen here, you’re nuts.

Everybody thinks just because people have flat screens, they’re happy. But have you been following the shenanigans in cable? You’re paying for all this stuff you don’t watch just to keep rich people rich.

Music is a game for the poor. A place where the uneducated with no status can get a bit of notoriety and money. And as long as someone makes it, no one pays attention to the real problem.

The game is rigged.

You’re gonna be left behind unless you start making yourself number one and doing what’s expedient to get ahead.

What kind of country is that?

Not one I want to live in.

P.S. That great middle class of yore? It created the classic rock you’re still listening today. Music was a reasonable pursuit, rock stars were as rich as anybody in America. That framework expired decades ago, rock stars are no longer rich. There are bankers who make $20 million a year every year! So the Grace Slicks of today, people born with a silver spoon in their mouths, don’t go into the arts, it just doesn’t pay. Tom Rush was a Harvard graduate. He revolutionized the folk circuit, he pioneered the singer-songwriter game. Now we’ve just got poor people rapping about Benzes and boats. How fulfilling is that? I get it, they want in. But you used to follow your dreams, not the dollar. But now if you ain’t got the moolah, you’re gonna have a heart attack and no health insurance and you’re gonna be bankrupted. Hell, the dirty little secret is one health episode puts many people in bankruptcy even when they have insurance! But we’ve got to have less corporate regulation and as far as health insurance goes…you’re on your own. Don’t you see, health insurance is a metaphor for our entire country! Can you imagine someone writing "Get Together" today? Come on people now, smile on your brother, everybody get together and love one another right now… Who sings about that? Chumps.

The Occupy movement is trying to raise the dead, get the 99.99% to rise up against the rapacious 0.01% who have bought the politicians and dictate the rules that has put America on a path careening downwards towards doom.

An Indictment of Obama and Most Western Governments

Here is Paul Krugman in a NY Times op-ed laying bare the open secret: Obama and European governments are contemptuous of Keynes, rejecting his advise, and imperiling the tenuous "recovery" that countries have been experiencing by calling for "deficit reduction" which is just another name for austerity:

“The boom, not the slump, is the right time for austerity at the Treasury.” So declared John Maynard Keynes in 1937, even as F.D.R. was about to prove him right by trying to balance the budget too soon, sending the United States economy — which had been steadily recovering up to that point — into a severe recession. Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.

Unfortunately, in late 2010 and early 2011, politicians and policy makers in much of the Western world believed that they knew better, that we should focus on deficits, not jobs, even though our economies had barely begun to recover from the slump that followed the financial crisis. And by acting on that anti-Keynesian belief, they ended up proving Keynes right all over again.

... the real test of Keynesian economics hasn’t come from the half-hearted efforts of the U.S. federal government to boost the economy, which were largely offset by cuts at the state and local levels. It has, instead, come from European nations like Greece and Ireland that had to impose savage fiscal austerity as a condition for receiving emergency loans — and have suffered Depression-level economic slumps, with real G.D.P. in both countries down by double digits.

This wasn’t supposed to happen, according to the ideology that dominates much of our political discourse. In March 2011, the Republican staff of Congress’s Joint Economic Committee released a report titled “Spend Less, Owe Less, Grow the Economy.” It ridiculed concerns that cutting spending in a slump would worsen that slump, arguing that spending cuts would improve consumer and business confidence, and that this might well lead to faster, not slower, growth.

Sadly a generation will pay the price for this obtuse ideological refusal to accept standard economics in favour if the idiocies of right wing economics that created the deregulation fiasco leading to the S&L crisis, the dot.com bust, and the 2008 financial crisis. These are the failures of government by right wing politicians who have sold the public on the idea that "government is not the solution to our problems; government is the problem". For 30 years bad ideas pushed by right wing politicians have enriched the ultra-rich while the bottom 99% have been left to tread water. Wealth has increased but "trickle down" economics delivered nothing to the poor who are poorer now than since the Great Depression when the lot of the poor was to live in Hoovervilles and stand in bread lines.

The common people need to rise up and say "enough!" and vote in politicians who want to grow the economy for the benefit of the 99% and who want to see a profound redistribution of income so that those who work hard in the 99% get the kind of rewards that for the last 30+ years have only flowed to the ultra-rich. Stop the privatization of government for the bottom 99% with the cutting of services and the raising of "hidden" taxes. Stop the socialization of government for the top 1% with the quiet fraud that lets the rich milk the poor, demand and get sweetheart deals from government, and the continued policy of handouts and bailouts and tax cuts and special tax loop holes for those who can buy government via lobbyists.

Krugman perfectly characterizes the failures of politics today:

We entered 2011 amid dire warnings about a Greek-style debt crisis that would happen as soon as the Federal Reserve stopped buying bonds, or the rating agencies ended our triple-A status, or the superdupercommittee failed to reach a deal, or something. But the Fed ended its bond-purchase program in June; Standard & Poor’s downgraded America in August; the supercommittee deadlocked in November; and U.S. borrowing costs just kept falling. In fact, at this point, inflation-protected U.S. bonds pay negative interest: investors are willing to pay America to hold their money.

The bottom line is that 2011 was a year in which our political elite obsessed over short-term deficits that aren’t actually a problem and, in the process, made the real problem — a depressed economy and mass unemployment — worse.

For three years the political right has been screaming "inflation" and called for austerity to stop the devaluation of "fiat money". In truth, there has been no runaway inflation despite the trillions that the Federal Reserve has pumped into the monetary system.

Keynes called for a coordinated fight on both the monetary and fiscal fronts to fight depression. But since 2008 there has been only a monetary policy in place that is now being withdrawn and there was a very, very small fiscal policy with Obama's 2009 stimulus package. The tools that Keynes outlined have not been used. That is why the Great Recession continues to plague the United States.

How to Know That Your Government is Rotten

Here is a bit from a Washington Post article that points out that while the "representatives" of the people have gotten fabulously wealthy over the last 25 years, the common people are either treading water or slowly sinking:

Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home ­equity.

Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.

The comparisons exclude home equity because it is not included in congressional reporting, and 1984 was chosen because it is the earliest year for which consistent wealth statistics are available.

The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers.

...

The growing financial comfort of Congress relative to most Americans is consistent with the general trends in the United States toward inequality of wealth: Members of Congress have long been wealthier than average Americans, and in recent decades the wealth of the wealthiest Americans has outpaced that of the average.

In 1984, the 90th percentile of U.S. families had holdings worth six times the median family’s; by 2009, the 90th percentile was worth 12 times the median family, according to the University of Michigan study, a longitudinal panel survey. These figures include home equity.

This growing inequality, not surprisingly, is seen in Congress. Not only has the median wealth increased, but the proportion of representatives who have little besides a home has shrunk. In 1984, one in five House members had zero or negative net worth excluding home equity, according to the disclosures; by 2009, that number had dropped to one in 12.

When the guardians of the government are stuffing their pockets with money while the people are slowly sinking, things are rotten. There is corruption and incompetence in government.

The Republicans loved to say that "government is the problem, not the solution". That's got it wrong. The problem is that the government politicians are the problem, not the solution. These "elected representatives" have been using their power to feed at the trough of government, taking money from lobbyists, selling their votes, all while they have been telling the ordinary citizens that the problem is "big government", not crooked, greedy politicians.

Rather than pass laws to help their constituents. These pigs have been feasting off tax money while blaming "big government" for everything. They are hypocrites, crooks, and liars. And they and their buddies, the elite 1% are doing this at the expense of the bottom 99%.

Note: From this same article. Here is how the rich view themselves as deserving their wealth. This is what a guy who married into the Phillips petroleum empire says of how "hard work" will make you a billionaire:

In 1973, Kelly married Victoria Phillips, an heir to the oil fortune. Kelly’s financial disclosure forms show that among her holdings is stock in Phillips Resources Inc., which is valued at between $5 million and $25 million and which generated more than $100,000 annually in dividends.

Four years out of college in 1974, Mike and Victoria were able to buy a home for $50,000, roughly twice the median value of homes in Pennsylvania at the time, a large, stately house close to downtown.

In 1997, Kelly bought his dad’s business from him, taking out a $1.6 million mortgage to pay for it.

When discussing his wealth and how it came to him, Kelly, who was called “Millionaire Mike” during the 2010 campaign, grows animated.

“The way my dad taught me was pretty basic: You have to kill more than you eat. You gotta wake up every day before anyone else, you better get to work, and you better stay later than everybody else,” he said. “I’m a rich guy because I’ve worked hard. I gotta work every fricking day. Listen, nobody gives it to you. I compete. I’m not the only guy selling hot dogs at the ballpark, okay?”

I don't doubt he worked hard. But tens of millions of people work hard, real hard. A lot of poor people hold down two jobs at minimum wage working incredibly hard. But they don't "build up" car dealerships. This guy Mike Kelly, a Republican, worked hard. I don't doubt it. But he didn't get fabulously wealthy from working hard. His dad owned a car dealership and he bought out his father (probably at a steeply discounted price) and he married an heiress to a fortune. I bet a lot of janitors would me multi-millionaires if their fathers owned car dealerships and they married heiresses. And I bet they would be millionaires if they only put in an "average day" at work. It wasn't the hard work that made Mike Kelly rich. It was his education, his connections, his charm, probably his "flexible" ethics, and certainly some good old fashioned hard work.

The Sleaze that Passes for Politics in America

Here are some bits from a NY Times op-ed by Paul Krugman exposing the cynical manipulation of truth by Republicans, Romney in particular:

Suppose that President Obama were to say the following: “Mitt Romney believes that corporations are people, and he believes that only corporations and the wealthy should have any rights. He wants to reduce middle-class Americans to serfs, forced to accept whatever wages corporations choose to pay, no matter how low.”

How would this statement be received? I believe, and hope, that it would be almost universally condemned, by liberals as well as conservatives. Mr. Romney did once say that corporations are people, but he didn’t mean it literally; he supports policies that would be good for corporations and the wealthy and bad for the middle class, but that’s a long way from saying that he wants to introduce feudalism.

But now consider what Mr. Romney actually said on Tuesday: “President Obama believes that government should create equal outcomes. In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort, and willingness to take risk. That which is earned by some is redistributed to the others.”

And in an interview the same day, Mr. Romney declared that the president “is going to put free enterprise on trial.”

This is every bit as bad as my imaginary Obama statement. Mr. Obama has never said anything suggesting that he holds such views, and, in fact, he goes out of his way to praise free enterprise and say that there’s nothing wrong with getting rich. His actual policy proposals do involve a rise in taxes on high-income Americans, but only back to their levels of the 1990s. And no matter how much the former Massachusetts governor may deny it, the Affordable Care Act established a national health system essentially identical to the one he himself established at a state level in 2006.

Over all, Mr. Obama’s positions on economic policy resemble those that moderate Republicans used to espouse. Yet Mr. Romney portrays the president as the second coming of Fidel Castro and seems confident that he will pay no price for making stuff up.

Welcome to post-truth politics.

...

So here’s my forecast for next year: If Mr. Romney is in fact the Republican presidential nominee, he will make wildly false claims about Mr. Obama and, occasionally, get some flack for doing so. But news organizations will compensate by treating it as a comparable offense when, say, the president misstates the income share of the top 1 percent by a percentage point or two.

The end result will be no real penalty for running an utterly fraudulent campaign. As I said, welcome to post-truth politics.

If there were any justice in the world, this farce that passes for politics would quickly lead to the complete collapse of America. Instead, the Republicans have been pulling this fraud for 30+ years and the only penalty has been a slow decay within America and a slow collapse of their economy. And the electorate continues like sheep to the slaughter. They don't complain. They keep electing these liars to positions of power, to positions that let them enrich the top 1% at the expense of the bottom 99%.

Justice in America

Here is a bit from a post by Robert Reich in his blog:

— American Airlines uses bankruptcy to ward off debtors and renegotiate labor contracts. Donald Trump’s businesses go bankrupt without impinging on Trump’s own personal fortune. But the law won’t allow you to use personal bankruptcy to renegotiate your home mortgage.

— If you run a giant bank that defrauds millions of small investors of their life savings, the bank might pay a small fine but you won’t go to prison. Not a single top Wall Street executive has been prosecuted for Wall Street’s mega-fraud. But if you sell an ounce of marijuana you could be put away for a long time.

The above is the key issue in the 99% versus 1% fight now going on in the US. There is a "justice" for the poor and a "justice" for the rich. There is a government for the rich and the poor have no voice in government. In fact the US Supreme Court has made it official with its Citizens United case: corporations are "people" with no limits on their political donations, while real living and breathing human beings are limited -- by law! -- in their donations. So the "person" of a corporation is above the law that applies to "mere persons" as represented by the bottom 99%.

Here is the reality of today:

... the four hundred richest Americans, whose total wealth exceeds the combined wealth of the bottom 150 million Americans put together, pay an average of 17 percent of their income in taxes. That’s lower than the tax rates of most day laborers and child-care workers.

Read the whole post.

Growing American Inequality

Here is a bit from an article by MIT economist Daron Acemoglu on the growing inequality in the US:

Inequality is in the news a lot right now. How should we be thinking about it and trying to get our heads around it?

Inequality is one of the things that has changed quite a lot in the United States and other economies over the last three decades or so. A lot of things don’t change radically, but inequality has. Understanding why that has happened and what it implies for our society is important. So it’s a good thing that it’s in the news, it’s an important topic and there is no reason for it to be taboo. Having said that, there is no broad consensus among social scientists about how to talk about inequality, and the average economist probably thinks about it very differently than the average layman. I’m not saying one is right and one is wrong, but the conversation needs to be expanded to bring these different viewpoints to the table.

What’s the economist’s view?

The default position of economists is that inequality reflects the unequal human capital or productive capabilities of different workers. If you start with that premise – that what people earn is commensurate with their contribution to their employer, and also perhaps to society – then greater inequality tells you something about how people’s productivities have evolved over time. This is by no means what every economist believes, but it’s a common view. Economists have cut their teeth on inequality by looking at things like the increase in the college premium over the last 30 years in the US and other economies, as well as the increase in the gap between relatively high earners – the 90th percentile of income distribution – versus the bottom 10th percentile. We’ve seen a big increase in inequality, measured in various ways, and this reflects the fact that the top people, the more educated, high earners have become more skilled. Technology has favoured them, globalisation has favoured them, and inequality has increased for that reason.

So if a CEO is earning $5 million a year, that’s because he deserves that $5 million?

That’s why I put emphasis on the 90th versus the 10th percentile, because once you get to that very high level, the story becomes a little harder to swallow. Economists have, for the most part, not focused on the CEOs for two reasons. This is changing, but one reason is that most of the publicly available data sources don’t have information on CEOs. That’s because there are not that many CEOs, or multimillionaires. So when you take a sample – for example, a 1% sample of all the US households – you’re not going to get many of them. Secondly, data are top coded. You don’t actually see people’s exact earnings. You see that they are at the very top, which might be $250,000, but you don’t see if they’re making $25 million. For that reason, a lot of the labour economics literature has focused on things like, do people with college degrees earn more than high school graduates? Do postgraduates earn more? What has happened to earnings inequality among lawyers or doctors or among production workers?

...

In terms of the actual figures, how bad is inequality in the US and, say, the UK?

Based on the work of Thomas Piketty and Emmanuel Saez, if you look from the 1950s up to the end of the 1970s, the share of total national income in the US earned by the richest 1% was about 10%. If you look at the 2000s, it’s well over 20%. It rose up to nearly 25% and then came down. In the UK it’s at about 15%, up from 7% or so. The trend towards inequality over the last 50 years has been very similar in the Anglo-Saxon economies, though it’s important to say that it’s not just an Anglo-Saxon phenomenon. There are similar trends in many economies, though there are a few that haven’t experienced it to any notable extent.

...

That’s what’s interesting about Occupy Wall Street. Its supporters aren’t just crazy lefties who don’t believe in free markets, but respected economists.

I’m definitely in that camp. I do believe in markets. I passionately believe in the importance of property rights and private property. I think they are absolute sine qua nons for prosperity. But I also believe that these things are very political and the politics shouldn’t be one-sided. Gore Vidal said, “The United States has only one party – the property party. It’s the party of big corporations, the party of money. It has two right wings; one is Democrat and the other is Republican.” If that is true, that’s a real threat to a free market and a fair society. For that reason I think Occupy Wall Street is very important. It’s a grassroots movement that tries to stand up to this tendency of our political system.

Go read the whole article.

The growing inequality is creating class warfare and will lead to the US becoming a banana republic.

Social Protest

Here is a good overview of the protests that are shaking the world and a prediction of more to come. The interview is with Gerald Celente.

My favourite phrase:

When the money on the top stops flowing down to the man on the street, the blood starts flowing in the streets.

While I don't agree with his specific "predictions" (he is no better than most other prognosticators), I do think he has the zeitgeist of the time correct: we are in an era of social upheaval because of a failing economic system with the root cause being a growing economic inequality and a growing marginalization of the bottom 50%.

Who Rules (and Owns) America

There is a nice graphic in the article that helps you visualize the unfair concentration of political power.

The graphic is taken from an article by the Sunlight Foundation on political spending in the US:

If you think wealth is concentrated in the United States, just wait till you look at the data on campaign spending.

In the 2010 election cycle, 26,783 individuals (or slightly less than one in ten thousand Americans) each contributed more than $10,000 to federal political campaigns. Combined, these donors spent $774 million. That's 24.3% of the total from individuals to politicians, parties, PACs, and independent expenditure groups. Together, they would fill only two-thirds of the 41,222 seats at Nationals Park the baseball field two miles from the U.S. Capitol. When it comes to politics, they are The One Percent of the One Percent.

A Sunlight Foundation examination of data from the Federal Election Commission and the Center for Responsive Politics reveals a growing dependence of candidates and political parties on the One Percent of the One Percent, resulting in a political system that could be disproportionately influenced by donors in a handful of wealthy enclaves. Our examination also shows that some of the heaviest hitters in the 2010 cycle were ideological givers, suggesting that the influence of the One Percent of the One Percent on federal elections may be one of the obstacles to compromise in Washington.

The One Percent of the One Percent are not average Americans. Overwhelmingly, they are corporate executives, investors, lobbyists, and lawyers. A good number appear to be highly ideological. They give to multiple candidates and to parties and independent issue groups. They tend to cluster in a limited number of metropolitan zip codes, especially in New York, Washington, Chicago, and Los Angeles.

In the 2010 election cycle, the average One Percent of One Percenter spent $28,913, more than the median individual income of $26,364

At the top of this elite group are individuals such as Bob Perry, CEO of Perry Homes, who gave $7.3 million to Karl Rove’s American Crossroads in 2010 and $4.4 million to Swift Vets and POWs for Truth in 2004, and Wayne Hughes, owner and chairman of Public Storage Inc., who gave $3.25 million to American Crossroads in 2010, and Fred Eshelman, CEO of Pharmaceutical Product Development who spent $3 million in 2010 on his own group, RightChange. Sunlight’s Ryan Sibley writes more about the top donors here.

Go read the original to get more details and access the embedded links.

The US Supreme Court has stated that corporations as "persons" and their money speaks a lot louder than the bottom 99.99%. You are "free" in America to have a "voice" but if you can't cough up $30,000 in political campaigns, your voice is lost in the noise. To are effectively mute.

The Mechanics of Class Warfare

First, a bit of humour:

“Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world.”

Next, here is a bit from an article on how right wing political "consultant" Frank Luntz is advising his clients with techniques to deflect the Occupy Wall Street crowd's message of the 99% versus the 1%:

... here’s how Luntz’s 10-strategy playbook should be annotated for the Super Rich who are the real powers behind Luntz’s political clients.

We began with what Yahoo News reporter Chris Moody heard Luntz tell the 29 governors about how to “fight back by changing the way they discuss the movement.” My re-edits shift the focus to the real problem, the growing economic class war between the Super Rich and the 99%. Hopefully to improve the dialogue. Listen:

1. Capitalism is a bad word, don’t say it

Luntz admits: “I’m trying to get that word removed and we’re replacing it with either ‘economic freedom’ or ‘free market’.” He admits the public “prefers capitalism to socialism, but they think capitalism is immoral.” But don’t mention “capitalism?” Impossible: Capitalism is in the genes of these conservative governors. Has been since Adam Smith, the “Wealth of Nations” and 1776.

Deny capitalism exists? They’ll sound hypocritical to both occupiers and their base.

2. Taxing the rich is bad. Say government’s taking from the rich

Clever, say “taking” not “taxing.” This word play will backfire: Luntz admits “If you talk about raising taxes on the rich,” polls show most voters want to tax millionaires. So shift the focus: Say government’s “taking the money from hard-working Americans?”

Luntz is too clever with his Words That Work. He’s also ignoring the fact that billionaires like Buffett, the new Patriotic Millionaires and others see a need for new tax revenues to feed the recovery.

3. Never say middle class: Call them hard-working taxpayers

Luntz admits that most Americans know the governors are not defending the middle class. He also knows polls show most Americans don’t trust the Republicans to fight for the middle class. But the advantage shifts when the buzzwords become “defending hard-working taxpayers.”

Warning: New buzzwords without new policies will ring hollow to many occupiers who are unemployed, lost benefits, lack job prospects or can’t find a new job for their training.

4. Stop talking about jobs, instead talk about careers

Luntz apparently has a very low opinion of the intelligence of occupiers. Folks, the word jobs just is not going away because of our 16% rate of underemployment. And yet Luntz asked his audience: “Everyone in this room talks about jobs,” but who wants a job? Raise your hands, he asked. “Few hands went up.”

But then “he asked ‘who wants a career?’ Almost every hand was raised. So why are we talking about jobs?” I wonder how many of the 99% laughed at that cruel joke. It really is “the economy stupid.” We really need jobs.

5. Never say government spending, it’s government waste

Luntz’s polling apparently tells him that most Americans are not against government spending, on them. But call it government waste, because that “makes people angry.”

6. Compromise is bad. Never admit you’re willing to compromise

The “no-new-taxes” pledge is a must for these 29 governors. Luntz warns: “If you talk about ‘compromise,’ they’ll say you’re selling out.” Your base “doesn’t want you to ‘compromise … replace it with ‘cooperation.’ It means the same thing. But cooperation means you stick to your principles but still get the job done. Compromise says that you’re selling out those principles.”

Unfortunately, the public, especially the 99%, see past the jargon into today’s economic reality, and an “unprincipled” failure to “cooperate.”

7. Tell occupiers, ‘I get it, you’re angry, we’ll fix it.’ Sound sincere

Luntz definitely has chutzpa: “Here are three words for you all: ‘I get it.’ … ‘I get that you’re angry. I get that you’ve seen inequality. I get that you want to fix the system.’” Then, he instructed, “offer Republican solutions to the problem.” What, more solutions? Better ones? Different from the solutions the 99-percenters believe are the problem?

Warning: America’s problem is not about politics. Not Republican political solutions. Nor Democrat. Too self-destructive. No, this is not about politics. This is a class war, a new American Revolution. Luntz’s sweet talk won’t convince governors. Nor their base. Nor the OWS who’ve been conned too often. So please get it. The 99% will smell the insincerity.

8. Entrepreneur or innovator are bad words, say job creator

From a purely behavioral economic standpoint this one is guaranteed to have unintended consequences and backfire. America’s global competitive thrust is driven by innovators and entrepreneurs. Imagine telling Silicon Valley they’re now just “small-business owners” and “job creators.” That’s guaranteed to make them wonder if these 29 states actually support America’s desperately needed “innovation” and “entrepreneurship.”

9. Never ask anyone to sacrifice, especially not millionaires

Luntz admits that “there isn’t an American today … who doesn’t think they’ve already sacrificed. If you tell them you want them to ‘sacrifice,’ they’re going to be pretty angry at you.” Solution? Luntz says “talk about how ‘we’re all in this together.’ We either succeed together or we fail together.”

Afterwards? Once back home in their states, see who still gets the tax breaks … who’s forced to make concessions … who’s still “sacrificing” in a world of politicians who signed that “no-new-taxes-for-the-rich” pledge.

10. Blame Washington, and never take responsibility

No, Luntz does not get the OWS movement yet. These guys are natural enemies. Governors are also in a class war with occupiers. Yet Luntz tells them to tell the 99-Percenters: “You shouldn’t be occupying Wall Street, you should be occupying Washington … occupy the White House because it’s the policies over the past few years that have created this problem.”

Warning, the 99% have long memories, they recall the Bush years, the massive war spending. They remember the 2008 meltdown. They see Wall Street greed unabated, their spending hundreds of millions fighting reforms. They know this is not about politics.

America is in a class war, the Super Rich versus the 99%. And the occupiers are not going away, vanishing into the cold winter nights. They’re already planning their version of an Arab Spring in 2012.

Finally, a little bonus … never, never say bonus!

Luntz also warned his state governors not to use the word bonus if they give staffers any extra money this holiday season. Why? The rest of America is sacrificing. “If you give out a bonus at a time of financial hardship, you’re going to make people angry.” Reframe your bonuses, call them “pay for performance.”

Yes, Luntz remains one of the greatest behavioral economists ever. He could rewire, debug and reprogram individual and collective brains with just a few verbal flip-flops.

Here is the Wikipedia background on Frank Luntz.

Sadly rhetoric can sway. Demagogues use words to bend people to their will. Without an awareness of the cynical lies used to manipulate people, democracy can be crushed. Think 1933 with the ascension of Hitler, the crushing of democracy, and the unleashing of the horrors of the Nazis.

If you don't believe, then seeing is believing. Here is a picture of the rising Jobbik party in Hungary (more info here in a Der Spiegel article):

Click to Enlarge
The maxim of George Santayana still applies:

Those who cannot remember the past are condemned to repeat it.

Similarly, those who fail to understand demagogues and "political spin" are condemned to destroy democracy.

The War is Over

Here is the voice of the 1% crowing about success against the Occupy Wall Street movement.

From a post by Michael Lewis at Bloomberg News:

To: The Upper Ones

From: Strategy Committee Re: The Counterrevolution

As usual, we have much to celebrate.

The rabble has been driven from the public parks. Our adversaries, now defined by the freaks and criminals among them, have demonstrated only that they have no idea what they are doing. They have failed to identify a single achievable goal.

Just weeks ago, in our first memo, we expressed concern that the big Wall Street banks were vulnerable to a mass financial boycott -- more vulnerable even than tobacco companies or apartheid-era South African multinationals. A boycott might raise fears of a bank run; and the fears might create the fact.

Now, we’ll never know: The Lower 99’s notion of an attack on Wall Street is to stand around hollering at the New York Stock Exchange. The stock exchange!

We have won a battle, but this war is far from over.

As our chief quant notes, “No matter how well we do for ourselves, there will always be 99 of them for every one of us.” Disturbingly, his recent polling data reveal that many of us don’t even know who we are: Fully half of all Upper Ones believe themselves to belong to the Lower 99. That any human being can earn more than 344 grand a year without having the sense to identify which side in a class war he is on suggests that we should limit membership to actual rich people. But we wish to address this issue in a later memo. For now we remain focused on the problem at hand: How to keep their hands off our money.

Go read the whole article. Lewis has written a humour piece, but there is a lot of hard cynicism and cold warning in his words. The ultra-rich are on the deck of the Titanic dancing as the ship is being sheared by an iceberg. Times are changing. Whether there is blood in the streets depends on whether the rich can have empathy for the bottom 99%. So far they have proved themselves to be callous and mean-spirited toward the millions whose lives have been utterly ruined by Wall Street machinations...

The second threat is in the unstable mental pictures used by Lower 99ers to understand their economic lives. (We have found that they think in pictures.)

For many years the less viable among us have soothed themselves with metaphors of growth and abundance: rising tides, expanding pies, trickling down. A dollar in our pocket they viewed hopefully, as, perhaps, a few pennies in theirs. They appear to have switched this out of their minds for a new picture, of a life raft with shrinking provisions. A dollar in our pockets they now view as a dollar from theirs. Fearing for their lives, the Lower 99 will surely become ever more desperate and troublesome. Complaints from our membership about their personal behavior are already running at post-French Revolutionary highs.

We on the strategy committee see these developments as inexorable historical forces. The Lower 99 is a ticking bomb that can’t be defused. They may be occasionally distracted by, say, a winning lottery ticket. (And we have sent out the word to the hedge fund community to cease their purchases of such tickets.) They may turn their anger on others -- immigrants for instance, or the federal government -- and we can encourage them to do so. They may even be frightened into momentary submission. (We’re long pepper spray.)

Hoisting the Republicans on their Own Petard

Here is an excellent post by Robert Reich on his blog. I love the way he carefully lays out the logic so that when you arrive at the last sentence you realize that he has cornered the Republicans by their own screwy logic:

Every time I try to make sense of Republican tax doctrine I get lost.

For example, rank-and-file House Republicans are willing to increase taxes on the middle class starting in a few weeks in order to avoid a tax increase the very rich.

Here are the details: The payroll tax will increase 2 percent starting January 1 – costing most working Americans about $1,000 next year – unless the employee part of the tax cut is extended for another year.

Democrats want to pay for this with a temporary – not permanent – surtax on any earnings over $1 million, according to their most recent proposal. The surtax would be 3.25 percent.

This means someone who earns $1,000,001 would pay 3 and a quarter cents extra next year.

Relatively few Americans earn more than a million dollars, to begin with. An exquisitely tiny number earn so much that a 3.25 percent surtax on their earnings in excess of a million would amount to much. Most of these people are on Wall Street. It’s hard to find a small business “job creator” among them.

Nonetheless, Republicans say no to the surtax.

This puts Republicans in the awkward position of allowing taxes to increase on most Americans in order to avoid a small, temporary tax only on earnings in excess of a million dollars — mostly hitting a tiny group of financiers.

Not even a resolute, doctrinaire follower of GOP president Grover Norquist has any basis for preferring millionaires over the rest of us.

To say the least, this position is also difficult to explain to average Americans flattened by an economy that’s taken away their jobs, wages, and homes but continues to confer record profits to corporations and unprecedented pay to CEOs and Wall Street’s top executives.

So Republican leaders are trying to get rank-and-file Republicans to go along with an extended payroll tax holiday — but by paying for it without raising taxes on the very rich.

According to their latest proposal, they want to pay for it mainly by extending the pay freeze on federal workers for another four years — in effect, cutting federal employees’ pay even more deeply — and increasing Medicare premiums on wealthy beneficiaries over time.

But even this proposal seems odd, given what Republicans say they believe about taxes.

For years, Republicans have been telling us tax cuts pay for themselves by promoting growth. That was their argument in favor of the Bush tax cuts, remember?

So if they believe what they say, why should they worry about paying for a one-year extension of the payroll tax holiday? Surely it will pay for itself.

That last bit should make Republicans squirm. But it won't. They are shameless hypocrites and liars. Being caught in their big lie causes them no shame.

Politics in America

The US is one of the few countries in the world where legal fictions have the rights of citizens and human being have "rights" only insofar they they don't try to exercise them. It is an Alice In Wonderland country.

Here is Robert Reich:

A funny thing happened to the First Amendment on its way to the public forum. According to the Supreme Court, money is now speech and corporations are now people. But when real people without money assemble to express their dissatisfaction with the political consequences of this, they’re treated as public nuisances and evicted.

First things first. The Supreme Court’s rulings that money is speech and corporations are people have now opened the floodgates to unlimited (and often secret) political contributions from millionaires and billionaires. Consider the Koch brothers (worth $25 billion each), who are bankrolling the Tea Party and already running millions of dollars worth of ads against Democrats.

Such millionaires and billionaires aren’t contributing their money out of sheer love of country. They have a more self-interested motive. Their political spending is analogous to their other investments. Mostly they want low tax rates and friendly regulations.

Wall Street is punishing Democrats for enacting the Dodd-Frank financial reform legislation (weak as it is) by shifting its money to Republicans. The Koch brothers’ petrochemical empire has financed, among many other things, candidates who will vote against environmental protection.

This tsunami of big money into politics is the real public nuisance. It’s making it almost impossible for the voices of average Americans to be heard because most of us don’t have the dough to break through. By granting First Amendment rights to money and corporations, the First Amendment rights of the rest of us are being trampled on.

This is where the Occupiers come in. If there’s a core message to the Occupier movement it’s that the increasing concentration of income and wealth poses a grave danger to our democracy.

Yet when Occupiers seek to make their voices heard — in one of the few ways average people can still be heard — they’re told their First Amendment rights are limited.

The New York State Court of Appeals along with many mayors and other officials say Occupiers can picket — but they can’t encamp. Yet it’s the encampments themselves that have drawn media attention (along with the police efforts to remove them).

A bunch of people carrying pickets isn’t news. When it comes to making views known, picketing is no competition for big money .

Yet if Occupiers now shift tactics from passive resistance to violence, it would spell the end of the movement. The vast American middle class that now empathizes with the Occupiers would promptly desert them.

I may be wrong, but if you refuse to give political rights to people, then they will organize and seize those rights by bloody revolution. The words of Thomas Jefferson are prophetic: The tree of liberty must from time to time be refreshed with the blood of patriots and tyrants. It is its natural manure.

Where the Money Is

Here is a bit from a post by Paul Krugman on his blog where he thinks about the choice between taxing the ultra-rich and cutting Medicare eligibility. Guess where you find the bigger pot of money:

So, what we learn from IRS data is that in 2007, before the Great Recession depressed everyone’s income, the top 0.1% had around $1 trillion in taxable income. Now, even confiscating that whole sum wouldn’t eliminate our current deficit, especially since the top 0.1% already paid something like a third of that total in taxes. But then, no single action would close our current budget gap — not even the complete elimination of Social Security or Medicare.

What you want to ask is how much higher taxes on the super-elite might contribute to deficit reduction, as compared with the kinds of things politicians are actually proposing.

So let’s suppose that it was possible to collect an additional 10 percent of that super-elite’s income in taxes, to the tune of $100 billion a year. How would this stack up against the kinds of things on the table right now?

Well, consider the idea of raising the Medicare eligibility age — a move that would create vast hardship. According to the Congressional Budget Office (big pdf), when fully phased in this would save … $42 billion a year.

I could multiply comparisons, but the point is that higher taxes on the very rich could make a significant contribution to deficit reduction. They couldn’t eliminate the deficit on their own, but what could? There’s real money up there, and those making it should be bearing a share of the burden.

The political right says "no new taxes" but are quite happy with cutting Medicare eligibility. The political left is happy with raising the taxes on the ultra-rich but want to keep the health care benefits for the poor.

So who will win this battle? I hope that the left wins. But my cynical side says that the rich have so corrupted politics in the US that the political right will win.