For those reading this Journal for the first time, i began it with the discovery of a long lost document entitled "The Fred Harris 1976 Campaign Handbook". I attempted to use Fred Harris' words as sort of a mirror to call attention to what is happening in politics today. In my last issue, "Economic Democracy Part I", I tried to highlight the current threat to our fundamental freedoms from from the effort to redistribute wealth from the individual and the productive to the corporation and the transactional. In this "Economic Democracy Part II", I would like to take a step back and focus in this Diary on some of those efforts already underweigh that attempt to counter those threats. They are positive and encouraging but far from adequate.
One of the first and most promising steps towards righting the balance, was the action by Congress and the Obama Administrations to cut middle class taxes. Coupled with the planned phase out of the Bush tax cut for the wealthy, they will restore an element of progressively to the the tax system missing for the last decade and eventually increase governmental revenues.
Now, one can disagree on whether one or another governmental program is necessary. Even if we cut down the size of government to that that satisfies the most libertarian ideologue there remains a cost for those remaining services that needs to be paid. In the past 40 years or so those with the most ability to bear those costs and receiving the most benefit from those services have born an ever decreasing share of the burden to pay for them.
The Obama tax cuts begin to restore some semblance of fairness into the system and halts redistribution of wealth through the tax system from the middle class to wealthy. There is much more to do but it is a start in the right direction.
A second major step was the reform of the US health insurance system. A significant portion of the projected deficit in governmental expenditures over revenues is based upon the expectation that health care costs will continue to rise at a rate far greater than that for the rest of the economy. This has prompted Republicans and the wealthy to use this fact to lobby for additional transfers of wealth from the productive class to the predatory class in the form of reduction in educational, health and public safety services that benefit the middle class, all in the name of cutting costs and growing the economy. It sounds good, but it is a lie.
In is a lie for two reasons. The first is that the Obama health care insurance reform should at a minimum bring the rise in medical costs down to a rate more in line with the economy as a whole.
And the second reason that it is a lie is that the so called deficits have absolutely no relationship to the health of the US economy except as a bogy-man to scare the public into supporting additional measures to redistribute wealth upward.
The third major reason for some optimism is that the economy is recovering due to a great extent to the distributive policies mentioned above (including the stimulus) demonstrating as some commentators have pointed out that there is no evidence that tax cuts that redirect wealth and income from the productive worker to non-productive transaction industry, produces jobs or an expanding economy but that assuring that the wealthy pay their fair share does. The wealth controlled media and economic consultants will contest this vigorously and that is why the fourth trend is so important.
The fourth positive trend is that recently, the internet has been flooded with posts from those who have recognized that a great fraud has been pulled on the public.
Here are just some snippets pulled together after reviewing just one site on just one day:
"The ascendancy of capital formation, tax cuts for the wealthy, as economic cure all has created a global economic trend towards low taxes and government austerity. Tax cuts for the wealthy and austerity for everyone else didn't work to stimulate the global economy, no surprise there. In 1980, when this tax "solution" was undertaken, there was already more idle wealth in the world than could be made use of. Now there is more idle wealth in the world than can be employed by ten global economies. We don't need to form any more capital. There is nothing for it to do."Stephen Herrington, Huffington Post May 13, 2010.
"Even as the banks push back against financial reform, watering down legislation against derivatives, too big to fail banks and even a full audit of the Federal Reserve Bank, the crisis lurches out of control. The NY Times reports that many jobs are not coming back, and debt is on the rise to historic levels. The next crash will be worst.
The Banksters need to be stopped, but only the people can do that--our media and politicians, right center and progressive, are not up to the task. What we need is more than exposes but a major effort to organize like foroureconomy.org. This is the only way to fight back against a one-sided war". Danny Schechter, Editor, Mediachannel.org. Huffington Post May 13 2010
Shechter's article quotes two other sources expressing similar concerns.
The first, is from James K. Galbraith, the economist son of John Kenneth Galbreath who in recent Congressional testimony wrote:
"I write to you from a disgraced profession. Economic theory, as widely taught since the 1980s, failed miserably to understand the forces behind the financial crisis. Concepts including "rational expectations," "market discipline," and the "efficient markets hypothesis" led economists to argue that speculation would stabilize prices, that sellers would act to protect their reputations, that caveat emptor could be relied on, and that widespread fraud therefore could not occur. Not all economists believed this - but most did.
Thus the study of financial fraud received little attention. Practically no research institutes exist; collaboration between economists and criminologists is rare; in the leading departments there are few specialists and very few students. Economists have soft- pedaled the role of fraud in every crisis they examined, including the Savings & Loan debacle, the Russian transition, the Asian meltdown and the dot.com bubble. They continue to do so now. At a conference sponsored by the Levy Economics Institute in New York on April 17, the closest a former Under Secretary of the Treasury, Peter Fisher, got to this question was to use the word "naughtiness." This was on the day that the SEC charged Goldman Sachs with fraud."
The second quotes Cliff Kincaid of the very conservative, Accuracy in Media who writes:
"The Marxists used to be the experts in exploiting human suffering for the purposes of sparking revolution. But the hedge funds are doing better than the Marxists. Consider that the business publication Barron's has an article headlined on its cover, "A savvy hedge-fund manager reveals how to make money on Old World's woes." A better headline would have been "How to exploit human suffering." At a time when people are dying in Greece because of riots in response to economic problems, what kind of publication would openly advertise how to make money at the expense of others and profit from their misery? But this is how the hedge fund short sellers and their apologists work."
Finally Jeff Schweitzer also writing in the Huffington Post that day about the Myths of Wall Street, wrote:
"Major stock exchanges are openly manipulated to favor large investment banks and brokerage houses at the expense of tax payers and individual investors. Note that you missed out on the trillion dollar bailout offered to Wall Street's biggest banks and brokers. Your risk is privatized while their losses are socialized. Bluntly put, Wall Street is institutionalized fraud, an elaborate scam sanctioned by a society eager to believe in financial miracles. A stock exchange is in the end nothing but a casino rigged against small players sold false hope by unscrupulous companies authorized by government to deceive and bilk customers."
These quoted writers recognize and argue that the discredited economic theories that have allowed Wall Street and their fellow travelers to amass so much of the public wealth in the past forty years are wrong, and are a lie promulgated by those with the resources to do so in order to advance their private interests at the expense of the general public and that these discredited economic theories must be rejected and replaced by a fairer more reasonable system of wealth distribution.
They and others like them writing in the modern electric media today stress, as I do, that the threat to our political and economic liberty and freedom is great and our position dire. We cannot wait for a new Keynes or Galbreath to produce a work of such intellectual force it alters the course of generations. I believe that we may need something like a new "Committees of Correspondence" to use the internet to propagate this intellectual coalescence so that this generation can be moved to halt the further unconscionable redistribution of the fruits of society from the many to the few along with it the gradual loss of our liberty and freedom.
A recent addition to the game of "You Must be a Republican if you Believe that:
You must be a Republican if you think you love this country while hating its government and its people. by Dallasdoc.