QUOTE OF THE MONTH:
“This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency. Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked - and it won’t work now.”
Rep. Paul Ryan (R.-Wisconsin)
State of the Union Response
Jan. 25, 2011
SENSE AND NONSENSE – CROSSING DANGEROUS LINES
From the editor: To realistically talk about the relationship between ‘power’ and ‘morality’ in future issues, The Compass will devote the next eight issues to a discussion of the lines between living in a civilized republic versus trying to survive in a country threatened by institutionalized chaos. For example, amid the clarion call for “civility” after the tragic shooting in Tucson, very little has changed within the ranks of the power brokers in Washington. If the power brokers were really serious about civil discourse, they would immediately restore the assault weapons ban, killed by Tom Delay in 2004. Instead, our elected representatives chose to hold hands and sing “Kumbaya” during the State of the Union speech. McConnell is still arrogantly threatening President Obama – to do what Republicans want or face the dreaded filibuster. Even Senate majority leader Reid is blatantly warning Obama to “back off” his threat to veto any bill containing earmarks. Reid does make the valid point that cutting earmarks does not save money – it just redirects it within the budget. The Republican boiler plate responses to the President’s State of the Union still pit big moneyed special interests against middle and lower income citizens.
The specific lines between civilization and chaos we will examine are:
- The line between poor and rich
- The line between journalism and propaganda
- The line between critical thinking and magical thinking
- The line between community and the ‘rugged individual’
- The line between defensive war and preemptive war
- The line between a living constitution and injustice
- The line between ideas and ideology
- The line between bridge builders and fence builders
We are starting with an examination of the line between poor and rich in America because the growing gap in income, between the top one percent of Americans and the bottom 90 percent, threatens our very ability to survive as a democracy. It is the single most important trend in America and has a direct relationship to the other lines we are in danger of crossing.
Maynard Chapman, Editor
The Compass Newsletter
THE LINE BETWEEN POOR AND RICH
From the editor: The first conservative rejoinder usually put forth in any debate on the gap between poor and rich is “class warfare.” Multi-billionaire Warren Buffett offered the most succinct and appropriate response by saying:
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
That quote appears in a November, 2006, New York Times column by conservative writer Ben Stein.
The second salvo against any discussion of the gap between poor and rich is that the poor lack a sense of “personal responsibility.” Both arguments by conservatives are simply rationales for greed.
The prejudice against poor- and middle-class citizens in this country has become even more evident in the past month with tirades by Glenn Beck and Rep. Paul Ryan’s use of the language like “personal responsibility” and “lulling people into complacency and dependency.” Ryan did everything but call poor people “lazy” in his response to the President’s four-step roadmap toward “winning the future.”
Radical radio and television propagandist Glenn Beck took class warfare well beyond Ryan’s rhetoric. In January, Beck named nine people (eight of whom were Jews) as prime contributors to the “era of the big lie,” and labeled them enemies of America and humanity. One of the nine was a 78-year-old professor at City University of New York.
Beck named professor Frances Fox Piven as an “enemy of the Constitution” because she published a plan to help poor people 45 years ago. The 1966 article containing the plan, co-written with her husband, is entitled “The Weight of the Poor: A Strategy to End Poverty.” Subsequent to Beck broadcasting her name on “The Glenn Beck Program” carried by Fox News, anonymous contributors to Beck’s web site, “The Blaze,” have called for her death. Professor Piven has also received death threats via email.
Propagandists like Beck and political opportunists like Ryan are using fear tactics to attack those who shed light on the gap between poor and rich.
The Systemic Problem
Concentration of wealth at the top of any society should be considered a more dangerous threat to the stability of that society than any group of freelance terrorists. Terrorists can be, and should be, dealt with by force of law. Concentration of wealth, on the other hand, is enabled by first creating the law that makes it legal.
Kevin Phillips, author of The Politics of Rich and Poor and Wealth and Democracy; Thom Hartmann, author of Unequal Protection and Screwed; and David Cay Johnston, author of Perfectly Legal; have clearly documented the steady transfer of wealth in this country from the middle and lower economic classes to the top one or two percent of income earners, especially, in the last three decades.
Johnston puts the problem in graphic terms in Perfectly Legal:
“Here is the most important news in these pages -- just 28,000 men, women and children had as much income in 2000 as the poorest 96 million Americans. Each group had about 5 percent of all reported income that year. To visualize the enormity of this chasm imagine those groups in geographic terms. The super rich would occupy just one-third of the seats in Yankee stadium, while those at the bottom are the equivalent of every American who lives west of Iowa -- plus everyone in Iowa” (p. 41).
The near financial collapse in 2008 is the most recent disastrous consequence of the unchecked pursuit of wealth at the expense of lower and middle income groups in America.
A 576-page report released in January by the Congressionally-appointed Financial Crisis Inquiry Commission produced a partisan analysis that concluded the financial crisis was “avoidable” but fails to adequately address the “Why did it happen?” question. A more helpful analysis of the crisis was presented by The New York Times with commentaries by six financial experts.
The contributors to the series, titled “Was the Financial Crisis Avoidable?” attributed the crisis to causes such as excessive leverage, financial deregulation, and subprime lending facilitated by issuance of “liar’s loans” (loans in which loan brokers lie about income of borrowers.) All six experts agreed that the crisis was avoidable. And if anyone wants to play the blame-game, there is plenty of blame to assign to everyone, from Alan Greenspan to John Paulson and investors who bet against the housing bubble while urging other investors to bet that the bubble would last forever.
The long and short analysis of “The Great Recession” is that the crisis was foreseen even by the F.B.I., which warned as early as September, 2004, that mortgage fraud was “epidemic.” Professor William Black, one of the series’ contributors, states “Credit Suisse reported in early 2007 that 49 percent of new mortgage originations in 2006 were liar’s loans.”
The most significant reality that can be taken from the financial crisis is that the super rich prospered from the crisis itself, while the lower income groups continue to pay the tab for legalized financial corruption on a massive scale.
The Individual Problem
Notwithstanding the Cato Institute and the Koch brothers’ abhorrence of the word, “greed,” the pursuit of individual wealth is powered by the Machiavellian principle that the ends justify the means.
The question that is rarely asked by analysts is “What is the price of individual greed?” And the question that is even rarer: “What is the price of individual greed when it mushrooms into institutional and systemic greed?”
Whereas the financial crisis offers the prime example of the consequences of institutional greed, the Supreme Court decision, Citizens United v. Federal Election Commission (Docket No. 08-205), is the prime example of institutional blessing bestowed upon individual greed. (Editor’s Note: See The Compass, vol. vii, no. 11, for retired Justice Stevens’ dissent in this decision.)
By assigning the right of free speech to corporations, the Roberts Supreme Court has simply enlarged the playground in which the pursuit of individual wealth can flourish without any allegiance to the principle of preserving the middle class. As Justice Stevens writes in his dissent:
“The Framers thus took it as given that corporations could be comprehensively regulated in the service of public welfare. Unlike our colleagues, they had little trouble distinguishing corporations from human beings, and when they constitutionalized the right to free speech in the First Amendment, it was the free speech of individual Americans that they had in mind.”
After World War II, a progressive tax system established necessary checks and balances upon individual greed. So-called tax reforms have steadily eroded a progressive system of taxation, especially since the Reagan administration, and ushered in libertarian calls for freedom from government, rather than calling for freedom protected by government.
The Solution
There is nothing anti-American about the pursuit of wealth. There is, however, something very destructive and anti-American about access to wealth by the few at the expense of the many. The solution to the gap between poor and rich is to close it through a system of fair taxation that stabilizes the middle class and provides opportunity for upward mobility to those now trapped by poverty.
Copyright © 2011, The Compass Society
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