Financial justice

We all know that the very rich have gotten a lot richer these past few decades while most Americans haven't. The exorbitantly paid continue to thrive during this economic crisis, even as the rest of us have continued to fall behind. How have they managed to restructure the economy to reap the lion's share of the gains and shift the costs of their new economic playground downward, tearing new holes in our safety net and saddling all of us with increased debt and risk?

It can be demonstrated convincingly and historically that the usual suspects---foreign trade, financial globalization, technological changes in the workplace, or increased education at the top---are largely innocent as causative factors.

We should indict what most Americans consider an unlikely suspect---American politics. Runaway inequality and our current economic crisis reflect what government has done to aid the rich, and what it has not done to safeguard the interests of the middle class. This avaricious economy is primarily a result of avaricious politics.

Trace back to the late 1970s, under a Democratic president and a Democratic Congress. A major transformation of American politics occurred. With big business and conservative ideologues organizing themselves to undo the regulations and progressive tax policies that had helped ensure a fair distribution of economic rewards, deregulation got underway (S&L scandals), taxes were cut for the wealthiest, and business decisively defeated labor in Washington. This transformation continued under Reagan and the Bushes as well as under Clinton, with both parties catering to the interests of those at the very top. The epic battles waged during President Obama's first two years (the next two will be worse) reveals an unpleasant but catalyzing truth: avaricious politics, while under challenge, is still very much with us. A political system that traditionally has been responsive to the interests of the middle class has been hijacked by the superrich.

Example: During the past two years 32% of our fellow citizens have been unemployed at some time, while big percentages have also suffered pay cuts or painful reductions in hours. Four and a half million of today's unemployed have now been without work for a year or more, amounting to a lost decade for the vast majority of Americans who've seen middle class jobs offshored, wages fall, family incomes sink, pensions looted, college education priced out of reach, and homes illegitimately foreclosed. Corporate chieftains consider low wages, long periods of joblessness, declining homeownership, and other elements of economic insecurity to be "the new norm". Whether people are young, mid-career, or retired, there's a growing sense across America that a middle class future (the glue that holds our nation together) will no longer be available to them, their children, or grandkids.

What the comfortable class (corporate, media, professional, and political) still doesn't grasp is that this festering insecurity is fast metamorphosing from anxiety to anger, creating a politics of anti-ism that goes far beyond the tiny percentage of people hoodwinked into the Tea Party.

Yet, some of the richest, most pampered people on this planet---people who literally wallow in luxury every day, with never a concern about losing a job, a home, health care, or getting their kids into college---these people are wallowing in self pity. They are Wall Street hedge fund operators—which essentially means they are high-flying financial flimflammers. What has stoked them into an elitist fury is an Obama proposal to close off a tax loophole that has let them pay only 15% in taxes, rather than the 35% rate that us commoners pay. These guys’ billion-dollar paychecks have been classified not as salaries but as 'capital gains'---like you earn when you sell your house---and that's what Obama says is absurd. Are we going to see Glenn Beck host a weeping telethon for a "Save the Billionaires' Tax Loophole?"

Another example: Wally, CEO of Walmart (low-wage behemoth), gets $19 million a year. Wally's workers average about $9.50 an hour. Comparatively, Wally makes $9,500 an hour. Wally pockets as much in two hours as his workers make in a whole year.

And I don't understand how so many corporations (Exxon, Halliburton, etc.) don't pay any income tax on their billions in profit, or on their offshore accounts. And how come there isn't a 1% tax on every Wall Street stock transaction (call it a privilege tax) committed to our general fund that would levy $5 trillion per year? We could quickly pay off China and the rest of our national debt, offer college to anyone wanting to attend for free, rebuild our crumbling infrastructure, subsidize green energy production, put photovoltaic roof blankets on every building—think of the employment! We'd be importing labor from around the world instead of seeing it go elsewhere. (Annual Wall Street transaction value, $500 trillion X 1%=$5 trillion.)

One more thing, and then I'm done. Those who think we don't notice America's growing income disparities, should take a peek at a recent opinion survey run by the rightwing, corporate-funded Peter Peterson Foundation. This outfit intended to show that the public backs the teabag agenda of slashing government spending, including balancing the federal budget by putting Social Security and Medicare on the chopping block. B-u-u-u-t, hold on there: the survey of thousands of Americans went badly wrong for the Peterson dialogues.

Far from wanting to gut Social Security payments, 85% of our people favored extending the program, by making the rich pay into the fund at the rate the rest of us do. Six out of ten of the folks in the foundation's 'America Speaks' survey want a new, higher tax bracket to make millionaires pay their fair share of providing for the "common good.”

You can see a good analysis of the survey at the Center for Economic Policy and Research at www.cepr.net.

--Bill Arnold