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When John Steinbeck said “Socialism has never taken root in America because the poor view themselves not as an oppressed proletariat, but as temporarily embarrassed millionaires” he struck at one of our most deeply held cultural paradigms: the American Dream. Though made 65 years ago, this comment still holds true today, and is clearly visible in the heated debate going on in Washington over this so-called “fiscal cliff.” As the expiration of the Bush Tax Cuts and the end of the fiscal year draw near, Democrats and Republicans in Washington have once again hit a snag over whether or not our economy is best bolstered from the bottom up or the top down. Democrats have taken the position that the top priority should be investing in America through stimulus funds, while Republicans claim the deficit should be the focus. While this debate should be a cut and dry case of dirty politics, America's middle class is once again divided.

The Bush Tax cuts cost the federal government 1.6 trillion dollars. The theory was that giving the wealthiest Americans more money in their pockets would incentivize them invest in American jobs and businesses. This same logic was put to the test under President Ronald Reagan and the outcome was the same: the wealth gap exploded, the middle class was made to pick up the slack, and the money pooled at the top. There was no benefit to this policy: no jobs created, no wealth dispersion, and no economic boom. So what exactly is the big deal with allowing the expiration of the cuts for the top earners?

Democrats see a chance to not only reduce the deficit, but also to increase revenue to reinvest in infrastructure and social programs, but the Republicans see an opportunity to score political points. The 2012 election is now being hailed as a full on realignment by many political scientists, which is an election that signifies a shift in the general political awareness, relating to how people perceive issues of government. Following the New Deal the Democrats were the majority party, winning most presidential elections and congressional races until the 1960's when the pendulum began to swing the other way. The Republican realignment began during the Civil Rights movement and culminated under Reagan. From then until now we've in between shifts. The Reagan legacy is slowly dying thanks to the failure of laissez-faire and of course, tax cuts for the rich, and new ways of thinking are prevailing. The Democrats campaigned on a platform of leveling the playing field and swept the election, winning the majority of votes cast in the House, the Senate, and the Presidential races. The House remained Republican due to heavy gerrymandering.

The GOP is aware of this shift. Conservative pundit Bill O'Reilly said the reason Obama was reelected was due to the fact that the “white establishment is now the minority.” Republicans were faced with 2 choices: accept the realignment and work with the Democrats to build a better future, or be wholly oppositional, hopefully drive America deep enough into the ground that the Democrats get blamed, and turn the country back to the GOP. As much as I would like to say they went with the nobler intention, the latter prevailed. Using the guise of concern over the debt, Republicans in the House have staked out a firm opposition to President Obama. Ultimately this scheme will fail as it did during the election.

If the House does not concede to letting the Bush Tax Cuts expire, and they force the country over the fiscal cliff, every working American's paycheck and pocketbook will suffer.  Taxes will increase for everyone, and automatic cuts will occur to both social and military programs. The safety net millions of Americans rely on would shrink. Social Security, Medicare, and Medicaid would all be on the table. The Democrats have offered a compromise to reduce the deficit but in doing so, keep the tax cuts for the middle class while raising 1.6 trillion in higher tax revenue and leaving the safety net alone. The GOP on the other hand, offering just 800 billion n tax revenue and proposing a 600 billion dollar cut to Medicare, has drawn a line in the sand: its tax cuts for the rich or tax cuts for none, and cuts to social programs or no compromise. What this means essentially is that working families are being held hostage for political gain.

Of course this entire situation is a canard. Our deficit isn't even the issue its been made out to be. Interest rates are low, inflation is virtually nonexistent, holding at .2 percent, and investor confidence is so high that people are paying the government to keep their money in the United States. The return on every dollar borrowed is greater than the amount it costs to borrow it.  What's more, modern economists agree that when in times of recession spending on credit is not only acceptable but necessary to boost the economy and create jobs. Driving America off the fiscal cliff would deny President Obama more stimulus money to do just that. The GOP is not really concerned with working class/middle class Americans.

So why then are Americans not completely up in arms over the debate about the fiscal cliff? Why are America's working and middle classes divided along party lines when we stand to lose programs we all benefit from? The answer get's back to John Steinbeck's quote. We Americans have this idea that one day we'll be rich, and when we get there we want to pay low taxes. We also like to feel responsible for ourselves—The idea of sacrifice for the greater good does not jive with our frontier mentality. We want to believe that everyone is a victim of their own limitations rather than potentially a victim of their circumstances. The GOP likes to encourage this kind of thinking as it allows them to cut social programs, disenfranchise labor, and give handouts to big business and the rich. In the recent election conservatives referred to the “haves” and the “soon-to-haves.” As ridiculous as this rhetoric is, and as impossible as it is for every American to be rich, it does tickle that feeling of endless possibility every American holds in their heart. As Steinbeck was pointing out so long ago: we need to reevaluate the American Dream.

Originally posted to WalkerBragman on Thu Dec 06, 2012 at 04:20 PM PST.

Also republished by In Support of Labor and Unions and Community Spotlight.

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Comment Preferences

  •  First of all, our federal government is the (7+ / 0-)

    source of our currency, the U.S. dollar, and the Congress is tasked with managing it, as it is supposed to manage our natural ans man-made resources. But, for some reason, the Congress has set up this convoluted system where the Federal Reserve Bank, a federally chartered private corporation draws dollars out of the Treasury, doles them out to other banks so those banks and their cronies can lend money back to the Treasury and collect a dividend. Then the Congress argues that there is not enough money to do what needs to be done and, on account of this evidence that Congress has not managed well, citizens have to tighten their belts and do without food, shelter, medical care and education in the richest country on earth.
    Talk about a scam.
    How to explain what the Congress is up to? The answer is really quite simple. They're into power and power, to be felt, has to hurt. So some larger or smaller segment of the population has to be made to suffer. For a long time, it used to be various minority populations and recent immigrants that got exploited and dumped on. And, until the advent of universal suffrage, there was nothing anyone could do about the sovereign rule of the petty potentates. Indeed, for the next three decades, power-addled politicians managed to manipulate the electorate so as to keep themselves in office and in power. The political,parties had a common interest in keeping the population divided and intimidated by focusing on various threats and periodic recessions in the economy to induce the sense that, all things considered, it could be worse. And then they made the mistake of actually making it worse.
    The crash of 2008 was just supposed to provide a scare to insure that changing "horses" in the middle of a crisis would seem too risky. But, the American electorate didn't buy it and voted wrong. Then the threat had to be carried out and, all of a sudden, forty trillion dollars of American wealth was made to disappear. Except, of course, while Katrina and other weather events resulted in the destruction of some real assets, most of the wealth supposedly lost must have been not real in the first place. Which, if nothing else, makes it pretty clear that if so much money can evaporate, the reality of it in the first place is questionable. Indeed, when you come to think about it, money is worthless, a figment of the imagination, a tool for measuring exchange and trade, whose absence or rationing is a great inconvenience, but man-made.
    And if man has made it, man can unmake it. Which is what we should demand from the makers. Put up and shut up and do your jobs.  

    There is one other question we might consider--whether rationing has the same effect on money as it does on other commodities. That is, does making money artificially scarce lead to hoarding and aggravate the problem?  If so, that might account for why, even though the quantity of money in circulation has steadily increased in the last twenty years, the rate at which it moves through the economy has steadily decreased. Some economic theorist refer to the propensity to save. I think that is a mis characterization. If money is made to be spent, as script is to be writ, then holding on to money is abusive. Which may be what is meant by "the love of money is the root of evil."

    We organize governments to deliver services and prevent abuse.

    by hannah on Thu Dec 06, 2012 at 05:14:30 PM PST

    •  There's history written on the Federal Reserve (0+ / 0-)

      and its operations. Ignorance and bad economic thinking can be cured directly.

      "But, for some reason, the Congress has set up this convoluted system..." implies that doing the research did not reach a result that included understanding this history of The Fed and its results.

      Similarly, "propensity to save" is a descriptive term in economic statistics that relates personal saving rate with personal income and other factors.

      Such as "holding on to money is abusive" ??? Well, if you don't save then you don't have the means to invest. Collectively, as a society, we need savings to drive investment, which then creates new jobs.

      "4% propensity to save gets you to 4% unemployment" has been the common observation over the years.

      Saved money goes to bank accounts. That money is returned to the economy through business and durable goods loans. Those loans drive down the unemployment rate.

      •  We can lower the unemployment rate directly (2+ / 0-)
        Recommended by:
        a2nite, NoMoreLies

        as we are currently doing by lending to college and technical school students directly so they are educated and teachers are employed and paid to share their skills and information. Indeed, the volume of student loans administered by the Department of Education has increased from $93 billion in 2007 to $509 billion in 2012.
        How many employees does that half a trillion account for? People who argue that only the private sector provides jobs would argue none. But why should employment by public corporations be different from employment by private corporations? It is a distinction that makes no sense, unless one presumes a basic antagonism towards satisfying the public interest instead of increasing the private wealth of people who don't have any salable skills.
        People who "make" other's work for them may think they are makers or managers and the people who do the work, transforming raw materials into useful stuff, are "takers" for whom they have great disdain because they themselves can't take and follow orders to save themselves, but that's an illusion. The manipulators aren't really needed. If we keep them around, it's because we are generous and, when you come right down to it, if they don't use our surplus, it will only to to waste.
        Creative people producing a surplus is what prompts and promotes trade and exchange. Our incompetent friends don't want to believe that, because it would make them feel useless. So, they have convinced themselves that their demand gets everybody hopping -- not unlike a suckling concluding that his sucking makes the milk flow down his gullet. It's a self-centered perspective that some people apparently never grow out of.

        We organize governments to deliver services and prevent abuse.

        by hannah on Fri Dec 07, 2012 at 08:46:08 AM PST

        [ Parent ]

  •  Interesting (6+ / 0-)

    A friend's family has had to rely on unemployment, food stamps, and having their mortgage refinanced twice now since the recession hit, yet her husband keeps supporting the Republicans who want to do away with all this. And he's even benefited from Pell Grants to go back to school.

    I asked my friend how he could vote against his interests, when these things were all that were keeping them from being homeless and starving. My friend's explanation was exactly like that Steinbeck quote: she said that he didn't look at himself realistically in the situation they were in; instead, he felt like this was just a short-term temporary situation, and before long he was going to be a rich guy who would need those tax breaks.

  •  There's a racial hypothesis to this (2+ / 0-)
    Recommended by:
    bontemps2012, a2nite

    Why has the United States become a backwater stupid suffering compared to other industrial democracies?

    Racism.  Americans may dream of being rich, but they damn well will make sure those other people don't get a damn thing.  Even if it means significantly degrading their own human and economic environment.

    The South Had Done It, if you will.  I don't know, not even close, but this hypothesis has always held a lot of sway with me.

  •  I am not sure what Hannah is talking about. . . (1+ / 0-)
    Recommended by:

    Does she think the banks were bailed out under Obama?  Does she want to get rid of the Fed?   Her message is unclear.    

    Old Hippies Never Give Up!

    by ravenrdr on Fri Dec 07, 2012 at 04:06:39 AM PST

  •  What are you saying? (1+ / 0-)
    Recommended by:

    Looks to be there's points being made.

    These two?

    -- We Americans have this idea that one day we'll be rich, and when we get there we want to pay low taxes.

    -- We also like to feel responsible for ourselves—The idea of sacrifice for the greater good does not jive with our frontier mentality.

    I don't think that anyone believes the former, any more. Also, the pioneers did little that wasn't sacrificing for the greater good of their families and local communities.

    Community barn raisings, for one example, were essential processes for economic survival.

    What happened, in fact, is that the GOP got smart in 1980 and ran a winner named Ronald Reagan. A genius at politics, if not at much else.

    Reagan screwed the pooch at taxes and war. He was a disaster playing at Commander in Chief. For example: slaughtering 5,000 Arab civilians and getting 392 of our people killed and then encouraging large-scale Arab terrorism by running away and all of this during his mindless adventure into Lebanon (1983/1984.)

    Democrats had no idea how to trash this guy. They played 'possum. You'd have thought that criticizing Reagan's failures would get you labelled as a Lyndon LaRouche nut case.

    The GOP played "The Party of Reagan" card for 20 years. Got "Reagan Democrat" votes by the millions.

    Same time, abortion remains the single-issue driver for 15% of the population. This correlates heavily with Whiteness. "Librul Baby-Killer" themes play well on hate-radio.

    Economic fantasy has been a minor factor.

    Try reading Obama's books. Reality is what matters and what we make of it. And he's a genius at politics and rather more.

    Anyone who can take a side in an Arab civil war such as Libya and end up losing four people -- more or less accidentally -- has the gift for these matters.

  •  The fiscal cliff returns us to the (1+ / 0-)
    Recommended by:

    way things were under Clinton, right?

    Economically, that wasn't so bad for "the workers" - they should jump at the chance.

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