I can’t imagine anyone arguing that America does not need a healthier, more economically viable, active, and growing middle class. Sadly, I also can’t imagine much argument that the exact opposite is dramatically evident.
The question now is what are we in the middle class prepared and willing to do about it?
I ask that question because I am completely convinced that the decline of the American middle class is reversible. I’m also completely convinced that the responsibility rests almost entirely and exclusively with all of us in the middle class. We can and we must do more to stop and then to reverse our decline.
Facebook posts and yelling at the TV might feel cathartic, but they don’t accomplish much. Let’s resolve in 2014 to do more and to take real action to take our democracy back from the corrupting influence of money.
What Can Be Done
It’s my opinion that we in America’s middle class need to do two things:
1. Stop waiting around for someone else to do something about it for us
2. Stop digging the hole deeper by no longer voting against our own economic self-interests
Let’s Stop Digging
I’ve written a lot over the years about point number 2, most recently here, here, and here.
There’s no other way to say it. All of the responsibility for point number 2 rests with Americans outside the wealthiest 2% who insist on voting against the economic interests of the middle class by voting FOR Republicans and tea party candidates who want to turn over control of our government and our economy to the very people and industries who got us into this mess.
The mess we’re in started with Reagan and his Rand/Friedman/Greenspan-inspired lies of trickle-down economics and the canard that government is somehow the only source of our problems. So long as some of us keep voting for the people representing those lies, we’ll keep digging the American middle class into a deeper and deeper hole.
I’m not saying we should never vote for another Republican. I have voted for Republicans in the past. I’m just asking – pleading, really – that we please just stop voting for the extremists in the Republican party.
We know – or we should know – who’s on that list. We know – or we should know – that it includes people selling us the fairy tales of unfettered free markets coupled with the failed economic and governmental philosophies of Milton Friedman, a.k.a. Reaganomics, a.k.a voodoo economics (thanks, btw, to G.H.W. Bush for that one), a.k.a. trickle-down economics.
Today, this describes one party and only one party. Anyone wishing to offer evidence to the contrary is invited to do so.
The Dangers of Being Kept In The Dark
To some extent and in a world where people still watch, listen to, and believe the likes of Fox News, Rush Limbaugh, Glenn Beck, and a whole plethora of ideologues masquerading as news media and opinion “journalism” (a very liberal use of that term, btw), it’s kind of understandable how so many middle class Americans can be duped into believing the lie of trickle-down economics.
Traditional corporate news media is almost as guilty. (In case you’re wondering, the answer is, “No, outside of a weather report, I do not count anything broadcast by Fox to be unbiased news.”) Corporate media spends almost no time or energy informing us about how and why the middle class is in decline. What time is spent on the subject is spent mostly with people meant more to drive ratings than to inform us about what the decline of the middle class actually means to America and to our geopolitical power and influence in the world on a long-term basis.
The reason for their silence seems clear. It’s not in their corporate economic self-interest for us to understand it, nor is it in the interest of the wealthy and powerful who run those corporations. They are beholden to their investors. Collectively, they exercise control over our government more than ever by funding campaigns with little-to-no oversight thanks to Citizens United.
Even worse for the vast majority of Americans, these are people who already seem to demonstrate little-to-no appreciation for the ramifications of their actions and that of a declining middle class. They are either willfully ignoring or inexplicably discounting in a dangerous and short-sighted way what a declining American middle class means for our economy, our country, and for the world.
If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated. Other superpowers such as Britain or Rome did not have the idea of a perpetually improving condition of the middle class as a core value. The United States does. If it loses that, it loses one of the pillars of its geopolitical power.
Every society throughout history has its ‘winners’ and its ‘losers’ in whatever terms each society chooses to define those words. Of late, it’s perfectly clear who the winners and losers are in America.
When it comes to the American middle class, the facts are in. The data are undeniable. The American middle class is in decline while the wealthiest accumulate even greater wealth and prosperity. This imbalance spells only trouble for us as a people and as a country.
Badly Tipped Scales
The balance that once existed between the income gains and the relative prosperity of the middle class and the wealthy – and which ought to exist again between free market capitalism and representative government – have tipped in dangerous and disturbing ways.
The scale seems to have tipped not between middle class and rich or between “corporatists” and “statists”, but instead in a third direction; Big Money.
Big Money, Bums, and Parties
Take a close look at the following chart. Appreciate and understand that it represents the average wealth of ALL of our representatives in Congress.
As of 2011, that’s an estimated average wealth of $11.7million for a Senator and $6.5million for a Representative.
What, exactly, are we supposed to have in common with these people?
What, exactly, do we think motivates them and what, exactly, should we expect from them when it comes to the resultant policy and law they make?
Isn’t it clear that all of the opportunity, privilege, and entitlements – yes, entitlements – now flow almost exclusively to the wealthy and, by extension, to their Big Money interests in both the private and public sectors?
We need to stop deluding ourselves about whom they serve. Our elected representatives represent the interests of Big Money. That means they do not represent the vast majority of Americans.
And, yes, both parties are guilty but it must be stated emphatically that they are NOT both guilty in equal measure. I’ve also grown weary of false equivalencies like that, too. Again, anyone wishing to offer credible citations to the contrary are invited to do so.
That said, the evidence is clear.
If the average Senator’s wealth is nearly $12million and the average House Rep is worth a cool $6.5million, then it stands to reason that these elected representatives don’t come from and don’t represent the middle class or the lower middle class or the working poor or the impoverished.
They represent Big Money, and without Big Money they can’t fund their campaigns.
The average winner in a Senate race <in 2012> spent $10.2 million, compared to $8.3 million in 2010 and just $7.5 million in 2008. That’s an increase of 19 percent since 2010. Senate Democrats seemed to have to work particular hard to win their seats, spending an average of $11.9 million, compared to the average Republican winner who spent $7.1 million.
On the House side, there was a smaller but still quantifiable increase in the cost of winning. On average, a winner in the House spent $1.5 million, compared $1.4 million in 2010 and $1.3 million in 2008. In the House, it was Republicans who had to work a bit harder: The average winning House Republican had to spend $1.59 million to win a seat, a bit more than the $1.53 million spent by the average Democratic victor. (Source: http://www.opensecrets.org/news/2013/06/2012-overview.html)
Once in office, they are well on their way to amassing serious wealth. It begins on Capitol Hill with legislation and regulation (or more accurately, deregulation) in favor of the very industries they are supposed to be watching over for our benefit and protection. That’s just the start. Much bigger paydays await.
Being elected to office or appointed to one of the myriad departments or agencies is merely the step necessary before twirling through the revolving door that opens onto K Street and the private sector where their real rewards await them.
That is the heart of it. Money that concerns itself only with more money and not with the concerns and well-being of ordinary citizens.
This closed circle of money between government and private enterprise is precisely why a “throw the bums out” or even the dream of more viable third, fourth, and fifth political parties will not work to change anything.
Let me repeat that.
Simply replacing the current crop of politicians with a new group of elected officials – either from the current 2-party system or from a whole host of additional political parties – will serve to change very little if the underlying and fundamental campaign finance process and electoral systems by which these people are elected and reelected does not change.
Where We Come In
If we’re going to make our voices and our concerns heard, if we’re going to have a democracy that works for us, then we’re going to have to take the actions that serve to get Big Money out of politics.
The wealthy, both in and out of government, are continuing to prove that, outside of people like Bernie Sanders and Elizabeth Warren, we have very, very few people in Congress actually representing us.
It’s not just national politics, either. We need to be examining and pressuring our local and state governments about whom they actually represent. Is it us or their Big Money backers?
What we can’t expect politicians to do on their own is to work very hard at tearing down and rebuilding the very systems that got them elected and which make them rich (or richer) in the process.
There are lots of groups and lots ways for you to get involved and to add your voice to growing chorus. The ones that I endorse and that I strongly encourage you to learn more about and to get behind are listed below. Together, we can make our voices heard and we can make a difference.
Perhaps defining Walmart as a “success” and the government as a “failure” depends mostly on how we think about and define words like ‘success’ and ‘failure’ from the outset. Is it only about money and market share and return on investment, or can contributions to society and to the present and future well-being of individuals be part of the definition of both words, too?
How awesome it would be to have a time machine. One of the trips I would take would be to 200 years or so into the future. I’d like to see how our progeny looks back at us. I wonder how they would judge our definitions of success and failure. I would love to see if Walmart, the Post Office, and American democracy are still operating in any way that would be recognizable to us. I suspect it will all look pretty different from today.
I’d also like to go into the past and bring the Founders into the present day. It would be fascinating to get their reactions to what we think and have to say about them, their ideals, and their intended vision for America. I wonder what they’d say about how accurate our view of them actually is.
When it comes to Walmart fixing our economy – a thinly veiled homage to all things privatized – my hope is that they’d consider the idea to be an idea even more preposterous and dangerous notion than I think it is.
It’s preposterous because a company that makes enormous amounts of money isn’t any kind of guarantee that it’s full of people capable of fixing anything at all, let alone something as complex the nation’s economy. It just means they know how to make lots of money. And assuming that what’s meant by the proposal that we “hire” Walmart to fix the economy actually means giving Walmart and private enterprise even greater influence than they already have over politicians and the economy strikes me as extremely dangerous.
It’s an idea bound to only make a bad situation worse, and here’s why.
It’s precisely because of big money’s influence in the governance of this country that we’re in the trouble that we’re in. Money has completely corrupted our democracy, and the objectives and means for maximizing profit versus good public governance are not the same thing. They are not even close.
That’s why comparing business and government is an even more futile exercise than comparing apples and oranges. The two institutions are completely different things. They are populated mostly by two different types of people (a good thing) who are presumably dedicated to two entirely different missions and two different visions of the world. That’s not to say that one is better than the other. They are just different because they serve different purposes.
To propose that one of them could perform the functions of the other indicates to me a deep lack of understanding about how either or both of them actually works. I’ll explain more of what I mean with that comment later.
Sidetrack: The 10th Amendment Argument
First, I want to quickly address the issue of the 10th Amendment and States rights since that was part of the email I received.
“WHAT WE NEED TO DO IS GO BACK TO THE 10TH AMENDMENT…AND ACT ON OUR STATES SOVEREIGNTY..TO STOP THE BEAST NAMED THE FEDERAL GOVERNMENT. OKLAHOMA IS WORKING ON THE 10TH AMENDMENT….AND REFUSING TO SEND THEIR TAXES TO WASHINGTON. KEEPING THE MONEY AND DECLARING WAR ON THE MEDIA WHICH PROMOTES A LYING AGENDA ARE THE TWO WAYS TO STOP WHAT IS HAPPENING TO AMERICA.”
I’m always amazed when people start banging the States rights drum, especially when it comes to big problems like providing assistance to the poor or fixing the economy. States simply cannot solve these kinds of far-reaching problems on their own.
Are the poor somehow different in Oklahoma? Is every state going to start printing its own money, negotiating its own trade agreements, and paying each other duties and tariffs to move goods across borders?
And besides, aren’t state governments still government?
As far as that goes, I don’t believe the elected officials in Harrisburg are somehow “better” (whatever that might mean) than the elected officials in DC. Frankly, I think local and state politicians are mostly worse than federal representatives when it comes to problem solving. They just seem to me to be a lot more parochial and, candidly, backward in their thinking.
They are actually following Palin’s “drill baby drill” mentality. They don’t give a damn about what it does to our forests, streams, lakes, and neighborhoods so long as the fossil fuel industry is making money and those industries pump money back into the GOP’s reelection campaigns.
This is one of many reasons why I have no trust in the current GOP. They simply don’t have any of my interests in mind as an ordinary citizen.
Private Enterprise Is Not Public Governance, and Vice Versa
This is also why, after 3 decades of professional and managerial roles in business, I have to say that the older I get the less I trust private enterprise to do anything more than what they’re created and meant to do – make money. I’m not judging that one way or the other (too much!), but that’s at the core of what a business does. That’s what it must do; otherwise, it’s not going to be in business for very long.
It’s also at the core of the fundamental difference between private enterprise and government. The former is concerned with maximizing profit. The latter is not, and it ought not to be.
I can understand why email chain letters like this one might seem appealing and even reasonable at first. In truth, they are the most futile kind of comparison. To contend that somehow private enterprise and the public sector are the same or similar enough to take over the other’s responsibilities or to be held to the same standards of “success” is proof of a terrible misconception and perhaps a complete misunderstanding of both. They obviously aren’t the same things, and they shouldn’t be measured in the same way.
Let’s look at the Postal Service as an example.
Privatizing The Postal Service?
“The U.S. Postal Service was established in 1775. You have had 234 years to get it right and it is broke.”
The premise that it’s “broke” is the direct result of, “… an onerous 2006 law pushed through a Republican-controlled House at the behest of President George W. Bush. Unlike any private business or other government agency, the law makes the post office pre-fund seventy-five years of future healthcare benefits for retirees over the course of 10 years. The $5 billion annual payments have been piling up in a fund that experts say already has more than enough in reserve. Since 2007, the pre-funding mandate is responsible for $4 out of every $5 in Postal Service debts.” (See more at The Nation)
This is not only treating the USPS like a business, it’s treating it like no other business. It’s not a business.
(Some may argue that that’s actually not entirely accurate, either, and to some degree I would agree. The U.S. Postal Service has some unique characteristics There’s a pretty quick and worthwhile summary of it here.)
The USPS provides a public service to society that only a government agency can. UPS and FedEx will never be able to duplicate the Postal Service and still make money. That’s why they don’t pick up and deliver at every single address in the United States every day.
So if we’re really going to demand that the USPS achieve their requirement of being “revenue neutral,” then we should prepare for more of what’s happening now; rate hikes and service cutbacks, and we ought not complain about it. Whether as a business or a government agency, they simply don’t have very many choices. They’re presumably going to have to implement some combination of price increases and expense cuts. That means charging more for their services and/or delivering less of them. Probably both.
It seems to be on track to mean fewer actual post offices and fewer workers. I suspect citizens living in rural areas and small towns, as well as in inner city neighborhoods, will simply be seen as money losing markets for a more commercially minded and profit driven mail service. Rural Americans and poor city dwellers should expect to have less and maybe even no mail service at all.
Too bad for them, I guess, but that’s the “invisible hand” of the free market for you. Anyone who wants their mail will have to stop whining, pull themselves up by their bootstraps, and get their “taker” butts to wherever the postal service gets closest to them, I guess.
Of course, those people working for the USPS in those markets who now are making a decent living wage will have to find different work once the post offices scale back or close completely. Perhaps the good news for them is that there’s probably a Walmart nearby. They can quit their whining, too, and start making 8 or 9 bucks an hour in a job that isn’t likely to offer 40 hours per week. Even if they do get a full-time job at Walmart, they’ll earn an annual income that’s below the poverty line. Of course, that will put them among the growing ranks of the working poor who need state and federal assistance, and we all know where the funds for those programs come from, right?
I’m being facetious, of course. While I’m not sure that I’d really miss daily mail delivery, I don’t want to see it go away. Too many Americans still count on it too much. The post office serves a useful purpose to society, and it deserves to be regulated fairly and funded – either with taxes dollars or through rate increases or both – in order to keep serving America while it figures out how to change and adapt in an ever-changing world.
Walmart’s “Success” As A Monopoly
As for Walmart and its presumed success, I suspect that the Walton family and Walmart’s shareholders consider the retailer to be a huge success if the only measurement of success is their own personal wealth. The small business and shop owners who closed up after Walmart came to their towns – and the people put out of work or left only with part-time minimum wage jobs at Walmart – might have a different opinion. I know that I do, and that is why I don’t shop at Walmart.
I know that an argument could be made that on some level I’m hurting the Walmart workers, too, but it doesn’t seem to be having any real impact on the Walmart juggernaut. Juggernaut is too timid a word, actually. Monopoly is really more like it.
It’s why I think it might be time for the federal government to exercise some form of antitrust legislation against Walmart. I don’t know if the circumstances actually fit the definition or not, but I’d like to see Walmart broken up somehow and its management be forced by law into allowing workers to form or join unions if that’s what the workers wanted. That strikes me (no pun intended) as a good first step toward the creation of living wage jobs at the nation’s largest private employer. At least it would put them on a path toward an actual living wage.
It just isn’t a very promising indicator of the future when the largest private employer doesn’t pay a living wage to the vast majority if their workers.
Call it government overreach. Call it wealth redistribution. I don’t have a problem with either or with government stepping in to force companies to do things they won’t otherwise do when it’s for the greater good of people and society. I’m pretty sure that’s one of the central missions of government – the greater good of people and society.
Yes, Walmart will undoubtedly resist and respond by laying people off.
Yes, prices at Walmart would presumably go up.
Both of these actions would be necessary if and only if Walmart management, its board of directors, and their big shareholders felt that the only way they could be happy with the rate of return on their investments would be to keep making on the order of $25billion in profits like they did in 2011 on sales of almost $420billion. $25billion is a lot of money. I think they can afford to pay their workers a lot more and still make a very nice return on their investment.
No, I’m not saying that the skill levels required to work at GE and Walmart are anything close to the same. What I am saying is that Walmart is almost three times the size in terms of revenue and is making almost twice as much profit as GE. So, yes, I think Walmart can afford to pay their average store employee more than $8.81 an hour.
We live in a democratic and capitalist country, and I love it. Americans are free to shop wherever they like. They are free to go to Walmart instead of the local merchant or regional store just to save a few bucks. That’s the free market at work.
I do wonder, though, what Americans might think and how they might behave if they gave a little more thought to where they shop, how markets and economies actually work, and how Walmart is actually big enough to have an effect on all of it. A little bit of recent history thrown in could also potentially be instructive.
The Walmartification of America
When we as consumers demand cheaper and cheaper goods and services, manufacturers, distributors, retailers, and service providers have only a few choices for how to respond. They either have to reduce their costs in order to sell for less and still make a profit, get out of the business or the market altogether, or they have to be able to convince their customers why their goods and services are worth the price they are asking whether it stays the same or goes up.
Walmart’s power is the result of their scorched earth approach to market domination. They force themselves on communities everywhere. Just ask my wife and our neighbors who went to zoning meetings to protest the Supercenter here, or the people in Ashland, VA, whose losing fight was documented by PBS.
Walmart’s monopoly power gives them an unfair advantage to sell anywhere for less than anyone. That is why I think the fed needs to step in. The federal government has broken up monopolies before when it was necessary. I think it needs to be done now with Walmart.
So when I see the suggestion that we hire Walmart to fix the economy I see a clear signal that the people proposing this idea may not really understand Walmart’s business strategy or its effects on the economy. That strategy could not be more wrong for the American economy and the American worker.
Call Walmart’s strategy the Anti-Henry Ford Strategy.
Trapped vs Empowered Employees
Here’s how I see it.
The model big companies and big employers during the boom times for the middle class in the 20th century were companies like GM, US Steel, Westinghouse, and the like. Those companies weren’t without their faults and shortcomings, but those companies provided jobs that made it possible for many us Baby Boomers to grow up living a truly middle class life.
Let’s be realistic, though. Despite Henry Ford’s idea of paying workers enough to buy the cars they made, workers really were nothing more than expendable resource until unions came into power and prominence. Without unions, what do you think those companies would have paid our parents? My guess is that it would have been the equivalent of today’s Walmart wages.
The New Gilded GOP Age
History also tells us that unchecked – meaning lax or unregulated – capitalism and weak labor leads to what we now refer to as the Gilded Age. Wealth and power gets concentrated in a few hands, and the standard of living for the majority of Americans stagnates or declines.
I think we’re living in a new Gilded Age now, and the government isn’t to blame for that unless you’re willing to blame the one party who represents big money: the Republican Party.
Since the days of the first Gilded Age and especially since Reagan, the Republican Party has been all about what’s best for the wealthiest among us. They fraudulently cast the wealthy as some sort of magnanimous capitalist gods and goddesses thanks in no small part to the astoundingly bad works of fiction by Ayn Rand which they seem to worship as a religion.
It’s Republicans and only Republicans who vilifying government officials, public service employees, and even union workers (along with undocumented citizens) as the source of all of our problems.
And it’s only the Republican Party who would have us believe that the best environment for the American worker is when the worker isn’t organized and can’t bargain collectively with management for their fair share of the company’s wealth.
I don’t know any other way to say it except that Republicans have become quite skilled at duping some portion of Americans into believing the myths of trickle-down economics and austerity. Both of these are more than myths. They are abject and undeniable lies as paths to prosperity, and they have been tried and proven to be failed approaches to economic stimulus and growth.
Republican policies have devolved into nothing but bad news for anyone outside the wealthiest 1% unless, of course, the scraps from the wealthy tables are considered all that the rest of us deserve and feel is all that we need to live a decent life.
Don’t get me wrong. I’m not saying that the Democrats are perfect by any stretch, but at least they seem to have a more consistent track record of caring about and wanting to implement laws and policies that help the poor and the middle class.
Does some – most – of that come at the expense of the wealthy? Absolutely it does, and that’s just as it should be.
The Debt That Is Owed
Where else would it come from; the poor or the middle class?
What the GOP, the rich, and their defenders seem to forget or ignore is that without a thriving middle class living and working within the structure and governance of a functioning society, the rich would not have the opportunity to generate the wealth that they have.
The wealthy owe a debt to society. They did not build society. WE OWE THEM NOTHING.
And yet some of us go merrily along with a Republican Party who wants us to believe that it’s ok if Wall Street continues to privatize all their gains and socialize all their losses as if that’s how capitalism is supposed to work. Wall Street has been operating unchecked and without regulation or fear of penalty for wrong doing for far too long.
To make matters worse, the rich and their party, the GOP, want us to believe that they have been and still are being taxed too much already when the truth is that taxes are at historic lows. Add to that the travesty that is Citizens United – again, thanks to Republicans – and it’s a complete mystery to me how anyone making less then a few hundred thousand a year can find any common economic ground with the GOP.
The rich simply have not been paying the debt they owe to society in the form of taxes in proportion to the benefits that they get from our society, and the Walmartification of government would only make it worse.
Democrats and Government Are Not Perfect
And before the accusations start to fly that the Democrats are the champions of big government and big spending, the facts ought to be known and understood. The middle class and arguably our country’s greatest economic prosperity came in the decades after World War II when the Democrats controlled Congress and when top tax rates on the wealthy were as high as 70%.
Do waste, fraud, and abuse exist in government? Absolutely, and we should do something about it, but let’s not kid ourselves that the same isn’t also true with corporations. What we need to remember is that we don’t get to vote for corporate leaders (outside of shareholder elections for board members). We do get to vote for our political leaders, and I hope we’ll keep voting Republicans out office at least until they come to their senses.
Facts come in handy when talking about which party does the spending and which party cleans up the messes left behind, too.
While we’re looking at that graph, we should note that federal spending was lower under Clinton than under W, too, just as it was when compared with George H.W. and even more so when compared with the previous high water mark achieved by the Republican patron saint and Mr. Small Government himself, Ronald Reagan.
Tax Subsidies to Walmart
So before we christen Walmart as the new patron saints of economic growth and prosperity for their genius for making money, we should also understand that our tax dollars actually are subsidizing Walmart, along with all the other large companies who employ large numbers of people in part-time and/or low paying jobs.
How? Through our tax dollars used to pay for the benefits their employees need from government just to survive because they are paid so little.
Here’s how this works.
Walmart and companies like them keep worker pay and hours as low as possible. This helps the company to maximize their profits because they keep one of their largest expenses – labor – low, low, low. In Walmart’s case especially, it’s well-documented that this creates a situation where employees earn so little that they can’t avoid having to apply for government assistance.
There you have it. It’s corporate welfare to the largest private employer in the country who is making $25billion a year in profit partly by keeping large numbers of their employees trying to make a living at 9 buck an hour.
Walmart is privatizing the gains and socializing the losses. In their case, the “losses” are really our losses in the form of our neighbors having no choice but to be on some form of public assistance even though they have jobs. We pay for that, and what’s wrong about that is that even their full-time employees need it because Walmart pays them so little. It’s not the employee’s fault they need assistance. It’s Walmart’s fault.
Is that the America we want to live in?
Are Walmart’s leaders the kind of people we want to fix the economy?
Do we want “middle class jobs” that were once associated with the making of cars and steel, the buying of homes, the wherewithal to take a vacation, and opportunity to send kids to college to now become defined by the part-time hours spent stocking Walmart shelves and then buying groceries with food stamps?
That’s fixing the economy?
The GOP Built That
The fault that government has in all of this is easily traced almost completely to Republicans.
There’s no denying that Bush inherited a surplus. There’s no denying that his tax cuts benefited the wealthy. (I challenge anyone to tell me how much they got back.) There’s no denying he launched two wars off-the-books, and there’s no denying his unfunded Medicare subscription drug programs all added up to turning a surplus into a huge deficit.
The fact that the GOP is still demanding that the tax rates remain low while demanding that social safety net programs be cut is indicative of how out of touch with reality people like John Boehner, Mitch McConnell, Eric Cantor, Paul Ryan, Rand Paul, and just about every other Republican politician truly are.
Why don’t I think we have a big spending problem, too, with earned benefits and social safety net programs? Simple. Poverty.
Poverty in America is troubling. 15%, or 46.2 million Americans, now live at or below the poverty line. That’s 1 in 7 people in America who aren’t just struggling; who don’t just have to forgo the second car or the vacation to the beach. That’s 1 in every 7 people who probably aren’t sure that they’ll actually get something to eat every day. That’s 1 in 7 people who may not know for sure where they might be sleeping tonight, or if they might get evicted in the morning, or who have to tell their kids that there’s no money to buy clothes to replace the stuff their kids have outgrown.
How is that the government’s fault, and how can we possibly be considering cutting into the programs that those people need?
How can anyone, including those who vilify government and worship private enterprise, look us and our fellow citizens in the eye and seriously suggest that we must cut social programs and anoint Walmart as the model for fixing the economy at a time when…
Yes, we have problems to address in government spending, too. But when the economy is weak, the worst thing we can do is completely pull the rug out from under those who need it most.
I’d rather have the government be the employer of last resort rather than Walmart.
Suggestions for Fixing the Economy
Now that I’ve made my thoughts known about Walmart, I have a few suggestions. No, I have no special experience or qualifications. I only have suggestions on how I would approach some of the challenges we’re facing.
The US Postal Service
If we want the post office to stop losing money, then we can’t complain about postage rates. Instead, we actually ought to encourage the rates to go up. If we don’t want rates to go up, then we should use the service more so they can hit their “revenue neutral” requirements without having to cut services or jobs.
Austerity will not save the Post Office. More middle class workers out of work will not help our economy to grow. Our economy requires a thriving and consuming middle class. That’s what’s been missing, and more Walmart jobs are not the answer.
Social Security and Medicare
“Social Security was established in 1935. You have had 74 years to get it right and it is broke.”
“Medicare and Medicaid were established in 1965. You have had 44 years to get it right and they are broke.”
Social Security and Medicare are instantly fixed by two simple steps.
First, remove the cap on FICA taxes. That cap is set for 2013 at an annual income of $113,700. Why should someone making $200,000, $500,000, or $5million a year stop paying FICA once they hit some arbitrary income?
Case in point: Lloyd Blankfein, chairman and CEO of Goldman Sachs.
Mr. Blankfein made a total of $16million in 2011. Of that, $5million was salary and bonuses.
If you only consider his $5million in salary and bonuses, he paid his FICA maximum of $4,485.60 in 2011 less than 2 hours into the new year. Had he paid the 4.2% FICA rate on all $5million, Social Security would have had an additional $205,514.40 from just one guy. One really, really rich guy who made 5 million just in cash and would have presumably found some way to make ends meet without the extra $205,514.40.
Remember, that’s only 4.2% of his salary and bonus. His Medicare contribution has no limit but it’s only 1.45%.
Now if we really want to make Social Security and Medicare totally solvent, we not only remove the income cap for Social Security, we bump up the Medicare percentage and add in the other $11million he earned and tax that, too.
The second thing that fixes fix Social Security and Medicare instantly is means testing. Mr. Blankfein and people like him should never see a penny from either program. No one of any significant financial means ever should.
Why not? He paid in, right? Doesn’t he deserve something back from the programs?
For those who have forgotten or ignored history, Social Security is not a savings account. It is a “social contract” that the Americans currently working have with their fellow citizens who, either through old age or disability, cannot work. It’s a measure of our humanity, our concern, and our compassion for our less fortunate fellow citizens. It’s what took the disabled and the aged of the early 20th century out of the literal gutters of the Recession that had been created by that generation’s greedy and unregulated capitalists and bankers. Social Security gave the poor and indigent Americans of that time a modest means to live with some amount of dignity, and that’s what it’s meant to do today and into the future.
It is not a personal savings account, and this is why the next president (most likely a Republican like George Bush) who suggests privatizing it ought to be sat down in a middle school civics class and taught the truth.
That presumes, of course, that Republicans haven’t defunded public education to the point that civics classes are extinct from middle schools. It was, after all, only Republican presidential candidates who talked about doing away with the Department of Education and…..and….now what were the others ones? Oops. (Couldn’t resist.)
So, back to earned benefits or, as Republicans like to pejoratively refer to them as “entitlements”, when the wealthy hit “retirement” age they ought not to be provided with any assistance. They aren’t “entitled” to them because they don’t need them, and it only takes away from those who actually do need help.
This is why I propose means testing for Social Security and Medicare. It would be on a sliding scale based on net worth. No, I don’t know what the exact numbers ought to be, but I’m confident that someone who turns 65 and has a net worth in the millions doesn’t need a monthly check from Social Security or help with their medical bills.
We need to face reality. The need isn’t going away, and it seems stuck on a track to only become greater.
What are we supposed to do with the poor, the aged, and the infirm? Charity isn’t the answer. If it was, the problem of how to feed, cloth, and house the poor and the aged would have been solved a long time ago by all that phenomenal growth among the wealthiest Americans, right?
It ought to be pretty clear that corporate profits, personal self-interest, and greed in general will always get in the way of charity.
“You have FAILED in every “government service” you have shoved down our throats while overspending our tax dollars.
AND YOU WANT AMERICANS TO BELIEVE YOU CAN BE TRUSTED WITH A GOVERNMENT-RUN HEALTH CARE SYSTEM??”
I’m totally for single-payer health care.
I trust the government far more than I trust a profit-driven and zero-value-add middle man like insurance companies. Talk about your death panels. It took government to force insurers to not throw people off their insurance, to allow parents to keep their young adult children on their plans, and to keep insurers from denying coverage to people with preexisting conditions.
As for how healthcare is paid for, it ought to be free and paid for by increases in taxes on corporations and the wealthy.
I’m perfectly fine with a much more progressive tax system like we used to have in this country where the more you make the more you pay in taxes in order to pay for healthcare.
We’re not the best in the world, and I’m not sure that paying a hospital something less than a dollar for an aspirin will drive them out of business or diminish the quality of the care we’re getting.
And as far as tax increases on the rich are concerned, any rich people who want to take their money and leave are free to do so. I just hope that Americans will call that out for what it is – greedy, selfish, stupid, and un-American to turn their backs on their fellow citizens and take their wealth to a foreign country. Besides, where are they going to go, India? Bangladesh? Malaysia? Somewhere where their money goes further? Have at it, I say, and good riddance. They’re not paying their fair share now, and they’re not hiring like the “job creators” the Republicans like to make them out to be.
And besides, it’s not like we’re going to miss Blankfein and his 4400 bucks.
Fannie and Freddie
“Fannie Mae was established in 1938. You have had 71 years to get it right and it is broke.”
“Freddie Mac was established in 1970. You have had 39 years to get it right and it is broke.”
Again, no need to take my word on this. It’s written by a hedge fund manager.
“The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 32 years to get it right and it is an abysmal failure.”
Our country does need an energy policy, that’s for sure.
I’d start by agreeing with Senator Sanders (http://www.sanders.senate.gov/end-polluter-welfare/) and would immediately end every penny of subsidies to the hugely profitable fossil fuel industries. I’d funnel at least some of that money into research in renewable energy.
This is another area where Republicans seem to generally have their collective heads buried in the behinds of the fabulously rich and powerful oil, coal, and natural gas companies.
Science is real. Climate change is real. All the deniers are doing is trying to protect the big money in fossil fuels. To those among the ordinary citizens who buy the malarkey that the science community is divided, I simply repeat the words of Neil deGrasse Tyson.
“The good thing about science is that it’s true whether or not you believe in it.”
We simply can’t keep living like we have another planet to move to when this one is used up. Fossil fuels are dirty. Period. And some day they will be all used up. That is, of course, assuming we’re still here to notice it.
Caring for the Poor and Aged
“War on Poverty started in 1964. You have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to “the poor” and they only want more.”
As for anyone who complains about helping the poor, I just don’t have too many kind words to say. I don’t know what species they’re a member of, but I’d suggest they try living in the poor person’s shoes for a while.
As I see it, those who aren’t poor have two choices if they want to do something to help the poor. Either give the poor a hand up or shut up.
With 6 billion people in the world and over 300 million in the U.S., we can’t all be Warren Buffett or Lloyd Blankfein. Until companies get off their asses and mounds of cash that they’re sitting on and start hiring, I don’t know how anyone can blame the poor for being poor.
“In the last months we have provided aid to Haiti,Chile , and Turkey ..And now Pakistan ……..previous home of bin Laden. Literally, BILLIONS of DOLLARS to say nothing about the handouts to ILLEGAL IMMIGRANTS!!! Our retired seniors living on a ‘fixed income’ receive no aid nor do they get any breaks.
AMERICA: a country where we have homeless without shelter, children going to bed hungry ( a few yes but as a whole NOT TRUE Harold), elderly going without ‘needed’ meds, and mentally ill without treatment etc, etc.
Imagine if the *GOVERNMENT* gave ‘US’ the same support they give to other countries. Sad isn’t it?”
It’s the same tired, xenophobic, and misinformed Republican argument we always here about foreign aid. It’s weakness is math, and is no different than the claims we hear from Republicans about the need to cut “waste” out of the federal budget by eliminating things like public broadcasting or Planned Parenthood.
Unless we want to turn our backs on the rest of the world, I’d say we have bigger problems than cutting into 1% of the budget that’s meant to keep us engaged and a leader to the rest of the world.
Making Walmart the model for economic policy would be the absolute worst of all possible approaches. We need to stop blaming government and start educating ourselves on the realities of how our economy and our government works.
It just seems that people find it easier to complain about the government than about how our economy actually works. I know I’m generalizing, but that seems to be especially true for Republicans and their defenders, especially those among the poor and middle class. It’s a phenomenon which I still can’t comprehend and chock up mostly to Fox News, Rush Limbaugh, and the entire conservative media machine.
Americans are scared because we’re being told to be scared (both sides do it), and we don’t spend enough time educating ourselves about the facts and the realities of our society and our economy. I’m no expert, and I don’t claim to be but it seems to me that the very idea that we’d want Walmart to fix our economy is all the proof I need to think that some people are really, really, really unaware of the facts about how capitalism and government works.
What they seem to be doing is looking for the easiest scapegoats. If they’re viewers and fans, they’re being told over and over again by Fox News, Rush, and the Republican Party at every level of government that government is the problem. Their patron saint of 30 years ago said government was the problem, and 30 years later they still believe it.
By the way, am I the only person who thinks that it’s just a little crazy to repeatedly hear a political party basically say that their function in our society is the problem and yet somehow accept that there’s no contradiction in supporting them and their message, the job they’re doing, and their taxpayer-funded lifetime health benefits and defined pension plans?
Some people find it easier to believe the overly simplified arguments told to them by the very people who have the most to gain from a vilified government. Those people who stand to gain from that are mostly the rich and are mostly their bought-and-paid for political party, the GOP.