Alright, so I'm quite aware I'm being baited on this one. Also, I understand that responding to anything in the magazine[sic] 'Forbes' is basically the equivalent of tee-ball when it comes to exposing it for the moronic, tight-wad bourgeois drivel that it is. Nonetheless I have to say something about their recent "10 most miserable cities in the US" list.
Chicago, according to this list is #3. Why? Well because Chicago is the capital of "lousy weather, long commutes, rising unemployment and the highest sales tax rate in the country".
Rising unemployment, last I checked, was a nation-wide (global, to be exact) trend that is increasing rapidly due to macroeconomic factors. Find me a large city that is not experiencing increasing unemployment. Read about NYC lately? I'm sure Boston, San Fran and LA are surging right now in terms of job creation.
Lousy weather. Alright, point taken. It's cold here. But its fucking cold in Boston, Providence, Philadelphia, Pittsburgh and NYC as well. I hardly hear anyone say "I'm moving to Boston (or Philly, NYC, etc) just for the winter because its fucking beautiful up there this time of year!". The only place that has good weather in the winter is Florida and Southern California. Is this news to anyone? The summers are gorgeous in Chicago, and the fall and springs can be quite nice as well. But I guess I should move to a retirement home in a resort-town in FL so that I can enjoy the good weather and the tax shelter.
Which brings me to the next source of 'misery' in Chicago: the high sales tax. Yeah, its fucking high. It should be exchanged for a progressive city income tax (or better yet: federal funding allotted relative to federal tax revenue generated from the city, so that rich tax-evaders can't simply to try to move away from city taxes). But that's not what the idiots at Forbes would say: They give '#4 most miserable' Memphis 'extra points', for instance, because TN has no state income tax. Bwahaha. Didn't Forbes himself run for President as a Republican on a platform to scrap the federal income tax and replace it with a sales tax on the order of 28-35%? According to this moronic logic, Forbes should be rejoicing at the highly regressive city sales tax in Chicago and praising the city for having no income (or other, more progressive) tax. At least Chicago exempts food purchases from its exorbitant sales tax, which is not something I can say for other 'tax shelter' states like TN, for example, who hits their residents with a whopping 9.25% sales tax on all FOOD puchases. But TN gets 'extra points' from Forbes for having no state income tax. I'm sure the real beneficiaries of TN's lack of an income tax (the schmucks who live in the plantation-mansions in Bellemeade) really sweat paying an extra 9.25% on their food purchases.
Finally, Chicago is miserable because of 'long commutes'. This has got to be the worst complaint o this pathetic 'top ten' list. Long commutes for who, exactly? The morons who drive themselves from the loop to Glencoe (40 min north of city limits) every day? I thought we were talking about the CITY, not the stupid cookie-cutter suburbs surrounding it. Getting around town is extremely easy using trains and buses in Chicago, even if you are going from one end of the city to another. Also -if you are one of the douchebags that actually reads Forbes regularly, then likes are you have the cash to live virtually whereever you like, which means you could very well live quite close to your cushy place of employment. Where's the commute there?
The article also mentions that Chicago is trying to get the Olympics which, they suggest, might help improve transportation in the city. But that's rather vague, isn't it? I certainly hope the anti-tax zealots at Forbes aren't insinuating that the transportation infrastructure (which is all publicly owned) will improve with more funding (i.e. higher taxes). Also -which infrastructure are they talking about? Mass transit (rails, buses), the roads, the prevalence of bike-lanes, the interstates? They don't bother to say. That's because this isn't a serious article... its a largely a thinly-cloaked jab at the city "where one if its own just became the most powerful person in the world". It's almost as though Obama is the reason Chicago is so high on the list, and the rest of the 'knocks' against it are contrived to fit this end. Nonetheless, I dont want to suggest that anything about the criteria that Forbes uses is legitimate: its crude, suburbanite white conservative crap.
In fact, if we apply the criteria Forbes seems to rely upon consistently, it seems to me that the #1 most miserable city in America is clearly New York City. After all, unemployment is on the rise there, the city budget is in trouble, its not warm and tropical, commutes are 'long' and busy if you're trying to drive your Bentley from lower Manhattan to the Hamptons every day, the city has much higher taxes than Chicago, and its pro sports teams didn't win championships last season (the Giants just went 0-1 in the playoffs and the Yankees stunk).
But the only thing, however, that is really miserable here at all is this criteria used by Forbes to evaluate 'cities' (nevermind that they hardly discriminate between alpha world cities and small towns). According to their logic, the place to be right now (assuming you are an old, crusty, filthy rich straight white man) is some unincorporated tropical island that has no taxes whatsoever, nice beaches, no minorities (except for servants, of course) and is conducive to effortless drives from the country club to the beach mansion.
I guess things like the following are not relevant when evaluating a city:
-How walkable it is (fyi Chicago is the #4 most walkable in the US)
-How good the schools are (k-12, amount of Universities in area)
-Intellectual climate (public lectures, events, symposia, etc.)
-Culture (music, art, theater, film, museums, etc.)
-How cosmopolitan and diverse it is
-Architecture
-Natural beauty (umm... like natural bodies of water, for example)
-How Bike-friendly the city is
-Amount of space allotted for public parks
-Political climate
-Safety factor for non-heterosexuals
-Race relations
-Cost of living
-Comprehensiveness of public transit
-Food possibilities
-History
-Pollution factor
Etc, etc...
Wednesday, February 11, 2009
'America's most miserable' magazine: Forbes is the winner!
Monday, December 13, 2010
More Gifts to the Rich on the Way
Evidently, the Senate is poised to vote on Obama's "deal" with the Republicans in which massive tax breaks are extended to the richest of the rich in the midst of massive budget shortfalls at the state and municipal level. Obama and Co. are also entertaining the idea of extending the retirement age and slashing Medicare as they stand poised to deliver this massive Christmas gift to the ruling class.
Let's be clear. Though both of the corporate parties are talking about the "economic benefits" of these cuts, this is utter bullshit (and trust me, they know it is). This is what's really going on. The ruling class has a difficult time directly attacking social programs (though they are making quite a go of it right now). Thus they attack indirectly by eviscerating public social institutions with massive tax breaks for the rich. Now, as I've suggested elsewhere on this blog, they can't do this directly either: more cover is needed. That is, they can't sell tax breaks for the rich in the way that they'd really like to, e.g. "let us take everything we can get our filthy hands on and leave nothing for the vast majority!". They can't speak the language of petty interests; they must talk about "we" and "us" and justify what they do in general, universal language. Enter bullshit about "economic growth" and tax breaks.
Now, I think that every single word about economic stimulus and tax breaks is ideological in the pejorative sense; it takes our eye off of what matters and focuses the debate on an apolitical, dubious point of detail. But let me say a bit about why tax breaks for the rich and economic stimulus are, basically, topics that are best discussed separately. As Krugman recently put it:
The point is that while the deal will cost a lot — adding more to federal debt than the original Obama stimulus — it’s likely to get very little bang for the buck. Tax cuts for the wealthy will barely be spent at all; even middle-class tax cuts won’t add much to spending. And the business tax break will, I believe, do hardly anything to spur investment given the excess capacity businesses already have.This is obvious. If you wanted bang-for-your-buck for each dollar spent (and, make no mistake, these massive tax breaks are tantamount to "government spending" in a sense, to the tune of $850 billion, all of which will be added to the deficit), you'd fucking build roads and hospitals and schools and train tracks and wind-power turbines. You'd actually do something with that chunk of change that really met ordinary people's needs and propped up effective demand.
The actual stimulus in the plan comes from the other measures, mainly unemployment benefits and the payroll tax break. And these measures (a) won’t make more than a modest dent in unemployment and (b) will fade out quickly, with the good stuff going away at the end of 2011.
These tax breaks have nothing to do with stimulus: they are part of a strategy hard-line class warfare from above. The priorities of those in Washington are clear: punish the people and shower the rich with extra funds (as though they haven't done well enough already).
Punishing the people is something Obama is getting quite good at. Now, some Democrat apologists will try to convince you that Obama's having "won" the measly extension of the unemployment benefits somehow represents the best of all possible worlds. Some of these jerks even cheering on the "deal". This is bullshit. As Malcolm X put it, "You can't drive a knife into a man's back nine inches, pull it out six inches, and call it progress." I'm not even sure if it's fair to say that the small, measly extension of unemployment benefits should count as "six inches".
In order to insulate their fantasy world from encroachment by reality, these apologists must convince themselves that Obama has no agency, that the Democrats are always 'forced' by the Republicans to do all of the shitty things they do, etc. But it's about time these apologists faced the music.
The Democrats, at the Federal and local level, are overseeing massive austerity measures at the same time that they are finding creative ways to lavish the richest of the rich with extra cash. They are cutting public transit at the same time that they lower taxes on corporations. They are for raising the retirement age while simultaneously lowering the top marginal income tax rate. They are for Wall Street, not the vast majority of us. They are for the ruling class, not the jobless.
We, the vast majority of ordinary Americans who make up the bottom 95% of the population, can do a whole lot better than this. Those who think we can't are cynics. Progressives need not pay attention to such conservative dullards, whose allegiances lie more with a corporate party apparatus than with the interests of the vast majority.
Thursday, March 31, 2011
How To Argue About Taxes (and How Not To)
"Myopia afflicts the contemporary legislative process in the US in a dramatic and simple way, in the form of tables that set out the distribution of tax burdens associated with various tax reforms. Most government transfers are excluded from these burden tables, including, most importantly, Social Security and Medicare. It seems clear that a tax burden that is matched by an equivalent transfer is not, in the relevant sense, a burden at all... But the problem would not be solved even if all money transfers were included in the burden tables. That too would be arbitrary, so long as we excluded in-kind benefits such as roads, schools, and police, not to mention the entire legal system that defines and protects everyone's property rights. If literally all government benefits were taken into account, however, we would notice that almost no one suffers a net burden from government. We would be forced to conclude that there is no separate issue of the fair distribution of tax burdens, distinct from the entirely general issue of whether government secures distributive justice. This might be described as a question about the allocation of different benefits of taxation, expenditure, and other government policies to different individuals; but that looks very unlike the original question." (pp.14-15, The Myth of Ownership, Nagel and Murphy (Oxford: 2002)).The point is that it is false to claim that we can intelligibly discuss "tax burdens" as an isolated matter apart from the social/economic system of which taxation is but a small part. In particular, it is preposterous and unjustifiable to merely examine or criticize "tax burdens", conceived of as levels of taxation on whatever (income, consumption, etc.) without also looking at the way that taxes are spent.
If, say, my income tax goes up by 5%, say by $1000/yr, and I get unlimited access to higher education (which is worth much more than $1000/yr), it would be absurd to say that my increased rate of taxation means an increased "burden". I haven't been burdened in the slightest- I've just netted quite a lot of value. It would be pointless to debate whether my 5% was, in itself, fair or unfair without considering what we get from taxation: services, a functioning society, basic social institutions, a more equal and fairer distribution of resources, etc.
But that is how the conversation is set up in mainstream "debates" about taxes. It is a discussion merely about "burdens" and whether they should be lifted just a bit or quite a lot. If it's not economists going on about what's most "efficient" or "best for growth" (as though these underspecified goals were the only values relevant to the determination of tax policy), it's politicians blathering about how to distribute the "tax burden" fairly. Now I don't want to suggest that we shouldn't pay attention to the distribution of tax rates. How tax rates are distributed is an extremely important- I've argued many times on this blog that working class tax rates should be decreased while corporate taxes, estate taxes, and the top marginal income tax rate should be steeply increased. It matters a great deal whether we have, say, a flat income tax or a progressive income tax, or whether capital gains and dividends are taxed at the same rate as wages.
Moreover, I'm not saying that taxes can never end up being a burden. For many people in the US, they absolutely are. For working class and poor people, deeply regressive taxes can end up being quite burdensome indeed. But they are burdensome on the assumption that basic needs go unmet despite the fact that people's relatively low income is taxed at a high rate. When a working class person faces high consumption taxes that increases the cost of food, that is clearly a net burden. But say that this same person pays high premiums for health insurance from a for-profit provider every month for inadequate coverage. If we were to institute a single-payer system, this person's taxes might well increase. But it would be false to say that this person is now enduring a new, increased burden. On the contrary, they would no longer have to pay high premiums to a for-profit insurance agency, and they would receive far more extensive care than they received before. What they pay in taxes is less than what they paid in premiums, and they now receive more extensive care for less money. This is clearly a net gain. The language of "burden" here is a red herring. Again, we can't make sense of the justice of tax policies without examining, among other things, what goes in and what goes out. If my taxes go up 2% and I get 25% more in terms of goods and services, it would be bizarre to say that I'm now burdened 2% more than before.
Thus, there is no abstract way to say whether a certain rate of taxation, all by itself, is burdensome or not- we can only know whether its burdensome by looking at the balance of what one pays in and what one gets out of it. We have to examine someone's class position. If we operationalize this in dollar terms, we could say that a particular policy was burdensome if and only if I paid far more into the system than I got out of it. And to calculate "what I get out of it" we have to add up a long list of social goods, institutions and services: roads and infrastructure, legal systems and courts, educational institutions, public parks, libraries, fire protection, Medicare/Medicaid, and so forth.
So, for the vast majority of us, taxation in general will not be a burden in this sense at all. Conversely, for the ruling class, taxation probably will be a "burden". They will, it seems, be required to pay more into the system than they are likely to take out of it in terms of services and public goods. Again, in a narrow sense, if the system of taxation is progressive (i.e. if the average rate of taxation increases with income) the rich will pay more into the system in dollar terms then they get out of it in services. But there are three reasons that nobody except ruling class parasites should worry about this.
First, it isn't quite right that the ruling class puts more in than they put out. In order for them to earn any profits whatsoever, they need a set of basic public institutions (legal system, police, military, courts, infrastructure, anti-trust regulators to guarantee competition, etc.) that make it possible to own property and have a market economy at all. Markets aren't "natural" in any sense whatsoever: they are conventional and require quite a lot of "big government intervention" in order to exist at all. Though we are encouraged to forget this and ignore it, the obvious fact is that private property is a legal convention, not a fact of nature. "We are all born into an elaborately structured legal system governing the acquisition, exchange, and transmission of property rights, and ownership comes to seem the most natural thing in the world. But the modern economy in which we earn our salaries, own our homes, bank accounts, retirement savings, and personal possessions, and in which we can use our resources to consume or invest, would be impossible without the framework provided by government supported by taxes". All of this must be in place in order for a capitalist economy to exist at all: the basic institutional framework underwriting markets are not "free", they must be paid for by tax revenues. So, to be sure, isn't exchanging equivalent for equivalent if we add up the taxes they pay alongside, say, the value of the education they procure from a free public university. But it's a fact that the ruling class needs a lot of government intervention (to break strikes, to intimidate protesters, to thwart social movements, to intervene globally to create a good business climate, to protect property, etc.) to make the profits that it makes. And that intervention is not free: there's a sense in which the ruling class owes the government "rent" for being there to create the conditions for profitability. Of course, power relationships mean that the ruling class is often in a position to get out paying this "rent"; thus they make working people pay it for them. They are, after all, just trying to maximize profits for themselves, even if this means socializing necessary risks and costs. The ruling class way of life is as follows: evade all costs, exploit ruthlessly, externalize risks and wastes, and jealously covet all the earnings that it can get its hands on.
Second, there can be no ethical objection to the idea of taxing the rich at much higher rates. On the contrary, there is something deeply unsavory, morally speaking, about the person with massive surpluses who refuses to relinquish any whatsoever to help those with nothing. The idea of paying according to one's means is a basic ethical principle that seems rather hard to reject. Such a principle correctly abhors the vices of avarice and miserly tendencies to hoard things for oneself. Moreover, it is absurd to ask Bill Gates to pay the same dollar amount in taxes as a working-class single mother. To object to that is to depart from our ordinary moral horizon entirely, so the ethical objection to taxing the rich hardly holds water. But, as we will see below, this moral/ethical element only arises on the condition that the pre-tax income of the ruling class is legitimate. But it is not. It is already tendentious for a ruling class person to say that their pre-tax income is "theirs" in some fundamental way (it is only "theirs" under a particular regime of property relations and public institutions which they willfully ignore in discussions of taxation). But even if it were "theirs", there are still very strong, and quite uncontroversial, ethical reasons to think that the "pay according to one's means" principle is sound. Cough it up, moneybags.
Third, it is false that the ruling class receives in profits exactly what they deserve as a result of their productive efforts. That's not how markets work. Markets aren't conscious, they aren't aware of who deserves what, and they certainly aren't in the business of rewarding people. Some of what determines market distributions is brute luck, some of it has to do with allocating resources in such a way that profit is maximized, some of it is short-sighted irrational craziness (as in the buildup to the recession we're in). In principle, I needn't do anything productive whatsoever to earn profits on an investment. Arbitrage is the most obvious example: this is when someone moves massive amounts of capital very quickly to exploit a small, temporary shift in exchange rates between, say, two currencies. This is how Soros made his billions. There is nothing productive whatsoever about such transactions. This is simply a case of money making money.
So, incomes in a market economy aren't in any sense based on what one "deserves". Often, many deserving people are denied employment simply because there is no way to profitably employ all of them. For the most part, incomes in a capitalist economy are determined by the office or position one occupies in the economy. And depending on the location of that office/position you have more or less economic power- and it is primarily the degree of economic bargaining power that determines your income. For example, if you're an un-unionzed worker in a labor market in which unemployment is high, then employers have a huge amount of economic power over you. They are in a position to push wages down in part because there are many workers competing against each other for scarce jobs. Because of your powerless position as an unemployed worker (you have nothing to take to market but your own capacity to work), your income is liable to be low. On the other hand, if you own large amounts of alienable productive resources (e.g. a factory, large amounts of resources) you are in a position to command a very high income indeed. It's not how productive you are or how hard you work, in the end, but what particular office you occupy within the system that largely determines your income.
Let us not forget that capitalism is a society in which the ownership of the means of production is concentrated in a small fraction of the population's hands. The majority of people in capitalism do not have large amounts of capital or land that they could invest for a profit; the only important productive asset most people have is their ability to labor. This means that those who own the means of production are in a position of power vis-a-vis others in that society, and thus they are in a position "to demand returns in the form of profit, interest, and rent". Most people, therefore, are not in a position of economic power such that they may extract profit, interest and rent from others.
Let me say a bit more about this to drive the point home. Marxists aren't claiming that capitalists and landowners never derive any income from, say, improvements to their land or labor they expend managing their firms. What fraction of income landlords and capitalist receive as a result of their labor is not, strictly speaking, what angers Marxists. What Marxists see as problematic is that fraction of income that capitalists and landlords receive, just because they are owners of capital or land. Their main complaint is about "money making more money" in a society in which the majority don't have such a luxury and must therefore work for every dollar they earn.
The basic problem here is that the ruling class can only earn profits on the condition that there is a large class of people who do all the labor necessary to produce profits in the first place. The ruling class can only make their massive fortunes on the condition that they own and control the means of production, whereas the majority of us do not. Their social/economic power comes from the fact that they control what we need to survive- jobs on the one hand, and goods and services on the other.
And as any child can tell you, if all the workers in a society simply stop working, the whole society grinds to a halt. If they were to stop working indefinitely, the ruling class would wither on the vine- they wouldn't even be able to continue to eat and procure their own means of subsistence. What this shows is that they are plainly dependent on a system of social labor. This is why the ruling class pulls out all the stops to prevent and to break strikes. Ruling class persons, then, are hardly self-created, isolated producers who create something out of nothing. They occupy a particular place in the economic system, and it is in virtue of their place vis-a-vis production that they are able to have the power they have, and earn the incomes that they do. So to say that there is some sense in which they "deserve" their pre-tax income is absurd. To say that they it is an illegitimate intervention into their private affairs for them to be taxed is patently false: their pre-tax income is only possible because of a massive, public system of social labor (which is not ignored at production time, but is happily ignored at tax time). Their income is not a private affair- they need the rest of us who do the work if they are to earn it! When the day comes that the ruling class produces everything they have entirely by themselves, on a deserted island, without the help of anyone else, then perhaps their complaint will have some merit. But of course they wouldn't be a ruling class anymore in such a case- they'd just be some weird person on a island who makes all their own stuff. They'd have no power over us and they'd have no way of exploiting our labor for profit.
But as long as they need the rest of us to have what they have, they should dispense with the bogus talk about the "privateness" of what they earn. It is public in every sense of the word- and it is justly taxed by society in order to fund the basic institutions, services, and goods that are required if any society is to flourish.
But though socialists support the demand to tax the rich, this isn't the goal of socialist politics. The goal of socialist politics isn't to achieve an "optimum" (whatever that would be) level of taxation on the ruling class; the goal of socialist politics is to transform society in such a way that there is no ruling class. The goal is to bring the basic structure of society under the democratic control of the people, rather than leaving it under the dictatorial control of the capitalist class.
Wednesday, April 6, 2011
Don't let it fool you
This is justly derided as reactionary filth.
But the inference that we're asked to draw is that Obama and the Democrats have a "sharply contrasting vision" that must, insofar as the GOP's plan is so bad, be much better. This is irrational.
I've got an idea: Let's not draw any inferences about the Democrats stand for merely by looking at the Republicans. If you want to understand what the Democrats are about, look closely at their policies and compare them to any plausible conception of social justice. What becomes obvious upon doing this is that the Democrats are only disagreeing with the Republicans about how deep to cut, how far to push the regime of austerity. The parties aren't disagreeing about whether to cut. That question is proscribed at the onset. The "debate" among the two parties is entirely internal to the ruling class policy of austerity.
As I've argued elsewhere, the entire discourse surrounding budgets makes it appear impossible that we could do anything but cut. I call this budget-cut fatalism. This is an ideological blinder that shifts our attention away from what matters and instead focuses us on marginal questions friendly to austerity.
In order to see that this is so, we have only to ask two questions. First, why is there a budget crisis? Second, what is the full range of options available to deal with it?
The first question is easily answered: deficits and budget shortfalls are cropping up in states, municipalities, and counties all over the country because of the global economic recession (brought on by the reckless gambling of investors in the financial sector). Accordingly, as in any recession, tax revenues have fallen off a cliff, while unemployment and demand for social services has soared. Moreover, regressive tax policies have (for decades now) have slowly starved public coffers of much needed funds by in large measure exempting the rich and powerful from paying their fair share. . At the Federal level, the deficit is a combination of these factors, such as economic meltdown and big tax breaks for the rich (I note that the Bush tax breaks, which Obama extended, has cost $2.74 Trillion over 8 years) but others as well, namely, the ultra-expensive wars our government has been bankrolling since 2001.
Though this is obvious and basically uncontroversial, it is shirked by the defenders of austerity. They act as though the budget shortfalls were caused by "reckless government spending". Thus they are able to appear credible in claiming that the government must learn to "live within its means". But for that to be true, we'd have to ignore all of the above evidence while also believing that governments (at the municipal, state, Federal level, in various different countries from Greece to the UK to the USA) suddenly decided to dramatically increase spending between 2008 and 2009. Of course, that's not what happened. As everyone knows, budgets weren't in the awful shape that they're in now only 2-3 years ago, so we have to explain the sudden change from then to now. But anyone who's been conscious the last 2-3 years also knows that this thing, the global economic recession, has kinda been a notable economic event. To say that "reckless spending" is the culprit is ad hoc and unjustifiable. Budgets are in the dumps because the floor dropped out when the recession hit, causing tax revenues to drop dramatically.
Having answered the first question, the answer to the second is rather obvious. Our options are as follows. One is to severely cut the living standards of the majority of Americans through austerity, thus forcing them to pay the price of the crisis they didn't cause, the wars which they oppose, and the tax give-aways to the rich which don't benefit them. That's the option pursued enthusiastically by Democrat and Republican alike.
But there are clearly other feasible options. For example, we could end the wars and occupations right now, thus saving trillions of dollars over the next 10 years (we could also drastically reduce the Pentagon budget). Moreover, we could easily raise taxes on the rich to cover the budget shortfalls: chop from the top, as they say. We wouldn't even have to raise them very much (though, I'm for raising them much more). For starters, we could ask G.E. to pay some taxes at all. We could easily institute a windfall tax of 2% on profits, which makes sense given that the ruling class made record profits (amidst a recession!) last quarter. Similarly, we could institute luxury taxes of various kinds, we could reinstate the estate tax, and we could raise the top marginal rate for income taxation. We could increase corporate taxes and sharply increase funding for enforcing the existing tax laws by cracking down on rich tax evaders. There are lots of options here.
All of these options would have no impact whatsoever on 99% of the population's tax rates. Moreover it would hardly "cripple the economy" or anything like that at all; it would simply tap into the vast, unproductive surpluses of the rich (who have become so at the expense of the vast majority of us). The unjustified dogma that high marginal rates of taxation are incompatible with economic growth is just that: unjustified dogma. From 1945-1973, the longest most sustained economic boom in US history, marginal rates of taxation were twice as high as they are now. They were even as high as 90% at times. So it's just false to say that high marginal rates slow economic growth and its groundless to complain that such rates would "hinder the recovery". What recovery? There has been no recovery yet for working people. Taxing the rich would be a way of stopping the lot of the rest of us from getting worse.
This is all a way of saying: if you want to support the Dems merely because they are the lesser evil, then fine. But don't pretend that they're not an evil. Don't talk as though they actually represent a progressive force in the US. Don't pretend that they are looking out for the interests of the vast majority of us. They are a party dominated by ruling class interests and their policies and actions in government make this painfully obvious. If the best you can muster is the lesser-evilist argument, then fine. But you've got to admit that that's thin gruel. So refrain from buttering the Dems up and pretending that lesser evils are something more than what they are. If you, like me, aren't satisfied with the lesser-evil... the answer isn't to project your political ideals onto them. This is wishful thinking, a paradigmatic failure of rationality. The answer is to get up and organize, mobilize, and be part of rebuilding the Left in this country.
Tuesday, March 16, 2010
A Solidarity Tax?
Just to get a grip on how tepid and worthless the Democrat Congress and Obama are, consider the following.
EXHIBIT A
Right now, state governments across the country are facing major budget crises as a result of the economic downturn caused, crudely speaking, by bankers. Working people are being hit the hardest.
California is the eye of the storm, where there is a $42 billion deficit that grew out of a convergence of decades of regressive taxation, crashing financial and construction industries, and the bursting of the housing bubble.
Across the US, all 50 states are facing a combined $180 billion budget gap . What that means is that if they don't get that amount of money, they won't be able to maintain their (already inadequate, as the result of three decades of attacks from Democrats and Republicans alike) public services.
Teachers are being laid off, schools are being closed, public transit is being massacred, tuition is being hiked, public workers are being fired, patients are being thrown out on the street, libraries are being boarded up, infrastructure is rotting. There is mass unemployment all over the country, but the jobless rates for people of color are heart-stopping.
EXHIBIT B
At present, the top marginal rate of taxation is 35%. President Reagan lowered it from 70% to 30% from 1980-83. George H.W. Bush raised it slightly, and Bill Clinton raised it a touch more so that it was 40% in 1993. And W. lowered it in 2001 to 35%.
The current holdings of wealth (not income) of the wealthiest 1 percent of Americans adds up to $21.9 trillion.
Just for the sake of argument, ignore the $1 trillion in military spending alotted for 2010.
ENTER OBAMA
Obama campaigned on the "radical" program of reinstating the pre-Bush Jr. tax rates (top marginal rate of 40%) for the rich in order to pay for more extensive public spending on health care. People turned out in droves to vote for him.
Now, I'm told that a small windfall tax on corporate profits or a one-time 3% tax on the wealth of the wealthiest 1% would more than double the amount of money that state governments have on hand right now.
Moreover, we can do a little mental math and quickly see that a, shall we say, "solidarity tax" that increased the top marginal rate of taxation by 5% would raise the money to stave off all cuts to public services, infrastructure and employment. An increase of 10% could even expand and shore up already anemic services in a time when more and more people are falling back on public services.
This is not even a radical proposal. It's simple math: we could slice and dice public services (education, healthcare, infrastructure, etc.) or we could simply raise the marginal tax rate on the very very wealthiest of the wealthy.
Yet voters are not asked to weigh in on these issues (except in Oregon, where they supported it).
Instead, they are asked to support one of two pro-business parties, both of whom are happy to eviscerate public goods and bow down to the wealthy and powerful.
It is the heavily Democratic Congress who are cutting public transit, slicing the social safety net, busting teachers unions, laying off public workers, raising tuition and closing schools. And before the much-hyped and overblown "Scott Brown Incident", don't forget that the supermajority-wielding Democrats couldn't even put together a stimulus bill that covered the state budget shortfalls since they were so keen on including tax breaks in the bill. And don't forget: Obama has proposed a freeze on discretionary spending (except for, of course, military spending).
I ask you: what is the purpose of supporting the Democratic Party? This is what they do when they wield the largest Congressional majorities I've seen in my lifetime.
What progressive and left-leaning people need to do right now is, first of all, completely divest from the Democratic Party and organizations subservient to it. The next goal has to be to build on (and forge new) movements already under way against budget cuts. If we ever hope to see important reforms like single-payer or fully-funded public transit in our lifetimes, we're going to have to form independent social movements to place demands on the existing order. Asking nicely and sending money to Moveon.org isn't a case of "not doing enough"; on the contrary, this kind of "activism" is precisely what's preventing meaningful change.
Can there be any doubt, even among liberals, that the function of the Democrats, intentionally or not, is to keep existing political arrangements intact?
Sunday, February 13, 2011
Obama to Unveil Deep Austerity Plan
The plan:
- Cut $1.1 trillion deficit over next 10 years
- Two-thirds of savings to come from spending cuts and one-third from tax increases.
- Defence budget: $78bn over five years
- Pell Grant Programme: $100bn over a decade
First of all, Obama only just recently caved in on the Bush tax give-aways and signed over a massive lump sum of cash to the nation's wealthiest taxpayers. The Bush tax breaks for the rich have already inflicted a $3 Trillion loss over 8 years. Given that Obama has extended them, we are set to lose $67 billion over the next 2 years alone in order to pay for these lavish gifts. This is, of course, to not even mention the fact that our top marginal tax rate was already very low before the Bush cuts (well, now, they're the Obama cuts) went into effect. And, of course, corporate loopholes are so bounteous that almost no corporation in the US actually pays at the official rate of taxation.
Now, as if all of the above wasn't awful enough, there's plenty more to add. First off, last quarter corporations posted the highest profits on record, even though the majority of us are still suffering the effects of the recession. As millions are evicted and laid off, the richest are getting richer. This was made possible because of layoffs and work speed-ups, which actually caused productivity to rise last quarter. That makes clear a basic economic truth: more exploitation means bigger profits. So it's false that there just isn't enough money to go around right now.
Second, as everyone has recently become aware, the government spends a massive amount of money doing unsavory things abroad (e.g. propping up (former!) dictators like Mubarak to the tune of several billion a year). Plus, you may have heard of these two wars we're still fighting in Iraq and Afghanistan... yeah, kinda pricey. The bills on those as yet unpaid-for adventures continues to increase every day. I'm not impressed by Obama's plan to modestly decrease the number of $400 toilet seats purchased by the military each year. Ending the wars would free up a massive wealth of funds that could be redirected to meet human need at home.
Third, you may have heard of this thing called TARP. Recall that close to a $1 trillion dollars was suddenly mobilized and distributed, at the drop of a hat, to the financial institutions that caused this crisis. All of that money emerged in an instant when the elite were in trouble- but when schools, public transit, parks, libraries, health-care and scholarships are on the line we're told, patronizingly, to live within our means.
Yet, despite all of this, the folks upstairs are telling us "we" need to tighten our belts. But who the fuck is "we"? Certainly the massive profits amidst layoffs, and the massive tax breaks for the rich amidst school closings aren't felt equally. Some are letting their waistlines balloon as others are literally starving.
Obama has already done more to increase inequality in 3 years than Bush did in 8. He has already overseen more transfers of wealth from the bottom to the top than his widely-despised predecessor. If this isn't a clear indication that Obama, and the Democratic Party, are not progressive, I don't know what is. Progressives and liberals would do well to look at the writing on the wall. Their resources and energies are wasted so long as they are funneled into the Democratic Party, the party of continued war, austerity, tax breaks for the rich, and environmental degradation.
Sunday, March 27, 2011
Democrats Push Austerity in New York
Democrat Governor Andrew Cuomo has "struck a tentative deal" in New York that includes big tax breaks for the rich and deep cuts to health care and education:
The deal would end a temporary income tax surcharge on high-income New Yorkers, which some have called the "millionaire's tax" even though it affects incomes starting at $200,000 annually.Predictably, the NYTimes paints this as a prudent move and speaks of "bloated" health care programs. This is treasonous as far as I'm concerned- to say that our already inadequate public health care and education institutions are bloated is horrifically misguided. If anything is bloated- it is the massive, record-breaking profits raked in last quarter on Wall Street amidst widespread social misery, unemployment, and, as above, steep drops in working class living standards. Chopping from the top is a perfectly fair and efficient approach to balancing budgets that were sunk by those at the top. There's nothing risky about it- it's rather simple actually. Thus we must ask: why is it that Democrats staunchly refuse to pursue such a course of action? Why are they dead set on forcing the majority of the population -who had no hand in the causation of the economic crisis- to clean up the mess caused by Wall Street? Any honest answer would have to include the fact that the Democrats are not a progressive political force. When push comes to shove, they side with their own- the ruling class. So while Democrats are busy breaking their arms patting themselves on the back for not being as extreme as Scott Walker, the rest of the country would do well to recognize that they are still pursuing a program of austerity for working people. They don't bite the hand that feeds them- when it comes down to it they'll pass the tax breaks for the rich before they preserve the schools of the poor.
Mr. Cuomo’s aggressive and strategic approach to negotiations appeared to have yielded significant victories, including a year-to-year cut of more than $2 billion in spending on health care and education, the two largest drivers of New York’s ever-growing budget.
As I keep pointing out, the proper way to assess the Democrats is to ask where we'd like to go and whether the Democrats are a good means of getting there. Crudely put, what the majority of us want is simple: to end the wars, to tax the rich, and to fully fund health care and education. Are the Democrats a plausible vehicle for attaining such goals? Well, they passed a health care "reform" bill written by insurance industry lobbyists when they had supermajorities in the Senate, so that's a clear "no" on the health care front. And, as we know, Obama gladly inherited two wars, sharply escalated in Afghanistan, and has now intervened militarily in Libya. Moreover, the Democrats pushed through a continuation of the Bush tax cuts and have been steadily chipping away at education and health care at the same time. Obama's "race to the top" education policy is a more aggressively conservative program than "No Child Left Behind". At the very least, liberals have to concede that the Democrats are a rather poor vehicle indeed. I would say that instead of an actual vehicle the Democrats are more like a virtual reality ride at a carnival (you know, the ones with screens inside that make you feel like you're flying but in fact take you nowhere at all). The sooner that progressives dump the aptly-described "graveyard of social movements" that is the Democratic Party, the better. What we need are independent left-wing organizations, with political clarity, that are rooted in workplaces, campuses and neighborhoods, which are organized and ready to fight for social justice.
Instead of buying into the "de-escalate and let us handle everything" message of the Democrats, what we need is precisely the opposite. We need to reject the idea that the Democrats are the legitimate leaders of Left movements and we need to embolden the burgeoning progressive fight-back that is growing out of this crisis. Wisconsin was inspiring because of the explosion of ambitious political energy that grew out of the big protests and demonstrations. It has ceased to be as inspiring of late because the Democrats opportunistically jumped on board, extinguished it, and transformed it into an electoral gain for them the next election cycle. This is instructive for the Left. If I were in an organization that dogmatically latches itself to the Democrats no matter what (e.g. like Democratic Socialists of America, Progressive Democrats of America, and others) I would be doing some serious soul-searching right now.
Wednesday, January 27, 2010
Oregon says YES to taxing the rich
Oregon has just passed a referendum measure that increases taxes on corporations and the wealthy in order to stop cuts to education and other public services. Both measures 66 and 67 passed by wide margins (53% in favor, 45% against).
Organizing got rolling in October when the measure got enough signatures to be placed on the ballot. The Secretary of State’s office said then that “[supporters of the measures] filed more than twice as many [signatures]. It’s unusually high for a statewide ballot measure.”
The gist of the measure is as follows.
Measure 66 "raises tax on incomes above $250,000 for households, $125,000 for individual filers. Tax rate increases 1.8 percentage points on amount of taxable income between $250,000 and $500,000, 2 percentage points on amount above $500,000 for households. For individual filers, the rate increases begin at $125,000 and $250,000 respectively. Eliminates income taxes on the first $2,400 of unemployment benefits received in 2009. Raises estimated $472 million to provide funds currently budgeted for education, health care, public safety, other services.Now, can anyone say "duh"? Doing this sort of thing makes so much sense, yet discussions of budget crises are often talked about as though they were natural disasters in which we can't do anything except try to manage damage control.
Measure 67 raises the state's $10 minimum corporate income tax.
Together Measure 66 and Measure 67 are estimated to generate $727 million, which 2009 Legislature has already put in their budget for public schools and other state services.
But the math here is really simple. When there is a budget shortfall, public institutions can do one of two things: (1) Cut services and layoff public workers, or (2) tax the rich.
If you go in for (1), then you hit the hardest-hit even harder by cutting the most essential services when they're need most.
For the majority of ordinary people, that (2) is the way to go should be a no-brainer. The people sitting on top of massive surpluses should cede some of it in the spirit of solidarity so that there are no cuts to education, public transit, and so on.
And if you're worried that you'll have a hard time convincing some of your wealthy friends that this is the way to go... don't worry. You don't have to. That is the beauty of democracy.
Those earning more than $250,000/yr are less than 5% of the population. If everyone else thinks that social justice endorses taxing the rich, that's 95% in favor.
The moral of the story: Tax the rich. And then tax them some more.
Saturday, October 2, 2010
Balanced Budgets are Bullshit
It's been said before, and it's still true.
The ideological function of "deficit hawking" is clear: convince people, especially those who already have a preference for increased social spending, that the government is starving and must be scaled back considerably.
I hear this worry often from leftish-liberal people sympathetic to reforms like single-payer health insurance. They say something like this: "well, we simply can't afford that... what about the deficit and future generations?". Many liberals are obsessed with this: one thinks of the deficit-hawking talking points leveled against Bush by Democrats in 2006.
The political consequences of this widespread belief are deeply conservative. Once you convince people of this lie about balanced budgets, they're prepared to draw other invalid inferences, (e.g. "well, either the government goes into the red or we slash spending... hence we must slash spending). And the people I have in mind here aren't hardened capitalists or right-wingers: they are ordinary left-leaning liberals and "progressives" who actually want to see vastly increased spending on education, health-care, public transit, etc.
There are several important things to say here.
First, we must ask why the deficit is as large as it is. Put simply, the deficit is sizable for two reasons: 1) massive tax breaks for the richest of the rich over the last 40 years, 2) transfer of toxic assets and debt from the private financial sector to the Federal Government (i.e. TARP).
For more on 1) see this. We have much lower top marginal tax rates than many comparable capitalist nations in Western Europe. Also- even if we grant the "deficit hawks" their confused claims, we can still just say: if you want to balance the budget, then tax the rich because the surpluses they hoard are large enough to pay for the national debt ten times over. It has recently been estimated that the Bush tax cuts of 2001 alone have inflicted a $3 Trillion loss. The surplus cash is out there, it's simply being stock-piled by the rich. As Rick Wolff has argued, even a modest tax on "intangible property" (e.g. stocks, bonds, etc.) would easily cover the budget shortfalls facing state and municipal governments:
At the present time, the vast majority of US states and municipalities exempt intangible property from property taxes. That is, stocks and bonds are kinds of property not subject to the taxes on other kinds of property (land, houses, etc.). If we imposed a very low rate of property tax on intangible property, it would cover the present and anticipated fiscal shortfalls of US cities, towns, and states...If coordinated across all states and cities (perhaps levied and collected by Washington and then returned to states and municipalities), intangible property owners would have no incentive to move it from one place to another.For elaboration on 2) read Joel Geier- "capitalist governments transferred private capitalist debt from banks and corporations to the state—losses were socialized for the public to pay for."
The second thing to say is that, contrary to prevailing dogmas perpetuated by both pro-business parties in the US, balanced budgets are not intrinsically valuable. There is no benefit, in itself, to having a balanced budget. If balanced budgets are valuable at all, they must be instrumentally valuable, that is valuable only as a means to fulfilling some other function or task.
Think of it this way: what should the function of government be? Most would agree that the function is to do certain things: provide infrastructure and certain services, create the conditions for people to flourish, lead free lives, whatever. You needn't be a radical to think that (although it's striking how radically anti-capitalist the conclusions are when you take seriously the idea that politics should be about creating the conditions for human beings to flourish.... but I digress).
Now, who in their right mind would say that the function of government is to balance its budgets? That is bass ackwards. It makes no sense. The function of government, even if you ask conservatives, is supposed to be to ensure liberty, provide certain services, etc. Nobody actually thinks, on reflection, that the function of government is just to balance its budgets.
Yet the practice and ideology of "deficit hawking" seems to assume precisely this. It fetishizes something that has no intrinsic value, in order to legitimate the slashing and burning of public institutions and social services.
Third, as I talk about in the link provided at the beginning of the post, the idea that there is something morally suspect about not balancing budgets is preposterous. Often this conservative complaint is made by way of the following analogy. "My family has to pay all of its bills at the end of the month, so the government should as well!" Two things on that: first, the analogy between the state in advanced capitalist societies and a typical bourgeois family unit is not a good one. Second, even if we grant the analogy, the argument still falls apart. As so many people are now realizing with the mortgage crisis, very few Americans actually own their homes (or their cars or college educations for that matter). Almost everyone debt finances those purchases. Likewise small businesses debt-finance much of their undertakings, just as larger firms do as well. Debt-financing is pervasive in contemporary capitalist societies, so it's a little dense to single the government out and claim that it is doing something illicit that "regular people" don't do.
Wednesday, January 12, 2011
Reject austerity, tax the rich
At least one state seems to be recognizing the screaming logic of dealing with budget crises by raising taxes, as the NYT reports, "Illinois Legislators Approve 66% Tax Increase":
Under the legislation, the income tax rate would, at least temporarily, rise to 5 percent from its current rate of 3 percent. Lawmakers had talked about an even steeper increase, but set that aside as the hours went by and the debate grew increasingly emotional. The rate for corporate taxes would rise to 7 percent from its current rate of 4.8 percent. As part of the deal, the state’s spending growth would be limited from one year to the next over the next four years.
Gov. Patrick J. Quinn, a Democrat whose signature would be needed to make any rate increase final, has indicated in the past he believes a tax increase is necessary.
The tax hike irked Republicans in Springfield, the state capital, and business owners around the state. Again and again, Republicans argued that the state needed to make significant spending cuts to solve its deficit before it even began considering a tax increase.
Tuesday, August 14, 2012
Be Afraid. Be Very Afraid.
Well, that's what Obama and the Democrats want you to think, anyway. But how much of it should we actually take seriously?
Now, don't get me wrong. I do think that Paul Ryan is awful. I have nothing but scorn for everything he stands for—more on that in a minute. But why does that admission mean that I should give the Democrats a free-pass, drink the Kool-Aid and engage in a long list of delusions—that Obama and the Democrats will fight the Right, that they'll pass progressive reforms, etc.?
If liberals are right to strongly oppose what Ryan stands for, they'd do well to oppose those same stands when—which is often—Obama and the Democrats take them. Let's do a little compare and contrast.
Here's a paraphrase of what Moveon.org has to say about Ryan in a Facebook meme that you may have seen:
- His economic plan would cost Americans 1 million jobs in the first year alone.
- He'd slash and burn Medicare and Social Security.
- He'd cut taxes for the 1% and raise them for working-class and poor people. And meanwhile he'd give subsidies to big corporations.
- He's an anti-choice extremist.
- He takes lots of money from the 1%.
- He opposes LGBT equality.
But the bait-and-switch here is to insinuate—as Moveon.org surely intends to do—that Obama and the Democrats stand for the opposite of every one of these measures. If only it were true.
First of all, the Democrats and the Obama Whitehouse are highly tolerant of soaring unemployment for the 99%. The fact is that the Democrats are hypocrites on outsourcing and unemployment. Since 2008, Obama and the Democrats have presided over an economy enduring extremely high unemployment—especially high in communities of color—and they took no bold measures to do anything about it except a weak-sauce stimulus package which, besides being weighted heavily in the direction of corporate tax breaks, had already run out of steam by mid 2010. It was like getting a band-aid for a broken limb.
Or take Social Security and Medicare. According to Obama himself, "Democrats do not receive enough credit for their willingness to accept cuts in Medicare and Social Security". Or consider that Obama's failed "grand bargain" in 2009 included a willingness to simply take Medicare away from 65 and 66 year old Americans. Or consider that Obamacare includes a series of cuts to Medicare totalling nearly $500 billion over the course of several years. Or consider that Obama himself—and other high-ranking Democrats—have on more than one occasion broached the idea of privatizing Social Security. A staunch defender of Medicare and Social Security Obama is not. Both Obama and Ryan are of one mind about austerity—their only disagreement is about how deep to cut the social safety net.
Or take the issue of tax breaks for the rich. As everyone knows, Obama campaigned in 2008 promising to let the Bush tax cuts expire for the rich. But as President he and the congressional Democrats warmly embraced those tax breaks and extended them--making them the Obama Tax Cuts for the rich. Of course, liberals haven't bothered to rename them. It is well-known that raising the marginal tax rate on the 1% would be both highly popular and an easy way of saving public sector jobs and staving off the push for austerity. But the Democrats and Obama have no intention of doing any such thing.
Why not? One reason is that the Democrats—like Ryan and Romney—take loads of money from the 1%, if they're not outright members of the 1% themselves. Recall that in 2008, the Democrats pulled in the lion's share of corporate campaign donations—they were, as the LA Times put it, "Wall Street's Darlings". As is well-known, the 1% hedges its bets and always gives enormous sums to both parties. There's a lot of alarmist nonsense floating around in liberal circles these days about how Super-PAC's are funnelling lots of money to Republicans—as if the Democrats are some kind of grassroots underdog that operates on online donations or something. The fact is that the ruling class spends enormous sums on the campaigns of both parties, and the politics of both parties reflects that fact. It takes considerable chutzpah to uncritically support the Democratic Party, on the one hand, and complain hysterically about the corporate money accepted by Republicans on the other.
Now, it is true that Obama and some Democrats are not the out-in-the-open anti-choice, homophobic extremists that the Republicans are. But that doesn't mean that they are allies in the fight for women's rights and LGBT equality. At best, they slowly erode gains on those fronts and compromise with the Right. At worst, they propose many of the same policies as the Right—think of the Stupak amendment, for example. But we can't afford to passively support an entity which barely holds the line, at best, and pushes things backwards at worst. The only time that the Democrats move at all on women's rights or LGBT equality is when movements pressure them to act. We should devote all of our time, money, resources and political energies to those movements—not the Democrats—if we want to carry those struggles forward.
And think of all the things that MoveOn.org meme didn't mention. They might have said that Ryan also supports war and imperialism abroad. But, of course, so does Obama. They might have also said that he supports the destruction of the environment, offshore drilling, and the appointment of high-ranking corporate polluters to regulatory positions in government. But, then, so does Obama. To this we could add other abominations such as the "War on Drugs", the New Jim Crow, the mass deportation of Latin@s, corporatized education policy, keeping Gitmo open for business, and all the rest. And, of course, Obama supports all those things as well. It doesn't do any good to pretend that this isn't so.
So, where does this leave us? We need to build the social movements, participate in the struggles of the 99% and be part of constructing a new Left that can actually fight for our interests. This isn't a new idea. It's how every single major progressive gain was won. Again and again we've seen that the Democrats are a political black hole. They suffocate struggles rather than carry them forward. They take and take and give nothing back in return. The time to cut them loose is now.
Wednesday, June 6, 2012
What's the matter with Wisconsin?
In liberal circles, there is a narrative emerging--reminiscent of Thomas Frank's 2004 book What's the Matter With Kansas?--that suggests that large swaths of the population in Wisconsin "voted against their own economic interests". This kind of talk has been accompanied by hand-wringing and consternation about what this might mean for the November presidential elections. Propagandists for the GOP are putting forward the very same analysis except they rejoice where liberals fret.
The trouble is that this entire way of thinking about what happened yesterday misses the mark.
In reality, the vote wasn't a referendum on Scott Walker. Voters weren't asked to simply appraise Walker's policies in the abstract. As always, they were asked to choose between Democrats and Republicans, between the political lines put forward by Walker and (2010 gubernatorial candidate) Tom Barrett. Yesterday's results must be evaluated in light of what voters took those two choices to represent.
Perceptions aside, what did each candidate actually represent? Those liberals most disturbed by the result tend to almost entirely ignore the politics of the Democrat challenger. They've attacked those who didn't vote for the Democrat as dupes who simply don't understand the nature of their own interests, but they've said almost nothing about whose interests Barrett's politics advance. To be sure, it is quite right to say that the interests of the vast majority of Wisconsin's 99% aren't advanced by the politics of union-busting and austerity pedaled by Walker and the Republicans. But neither were those interests advanced by the positions staked out by the tepid Democratic challenger.
As Socialist Worker noted recently, Barrett and the Democrats conceded to Walker on every single issue that brought people out onto the streets of Madison in the first place:
During the Senate recall races last summer, Democrats quietly dropped restoring collective bargaining and union rights from their campaign speeches
In this spring's primary to choose a candidate against Walker, other Democrats attacked Falk, a former Dane County Executive and the labor leadership's favored candidate, as being in the pocket of unions.
In an op-ed supporting Barrett, former Madison Mayor Dave Cieslewicz jabbed at Falk: "A candidate beholden to big unions is no more appealing to independent voters than one who answers to the Koch brothers."
During a debate with Walker, Barrett made a point to mention that he was not labor's candidate. Rather than put up a defense of unions, the Democrats have treated them as supporters of "special interests" and an embarrassment.
Barrett has ceded further ground to Walker on austerity. Walker's rationale for budget cuts has been a familiar one: the state is out of money and needs to control its expenses. Yet despite the fact that Wisconsin's corporations are taxed at a rate below the national average--and that the current tax burden is primarily on Wisconsin's middle class rather than the rich--Barrett made no attempt to challenge Walker's claims.
Instead, Barrett emphasized that he won't increase taxes on corporations and the wealthy. He told a Milwaukee radio station, "It is certainly my hope that by the end of my first term, at the end of my second term, and at the end of my third term that Wisconsin will take in less tax revenues from its citizens and businesses each year."
While Barrett says he will reverse corporate tax cuts that Walker passed in January 2011, the Milwaukee Journal-Sentinel reports that "he doesn't want to raise taxes beyond the levels they were at when Walker took office." This means that while Barrett could shift some priorities around, he wouldn't be able to restore most of Walker's cuts, including $1.25 billion taken from education and $500 million from Medicare.Now, I was out on the streets of Madison when the uprising was white hot. I was joined by hundreds of thousands of other people who chanted, "How to fix the deficit? Tax, tax, tax the rich!" and "They say cut back, we say fight back!". I saw thousands of people who had no direct personal connection to public sector workers stand up and defend their sisters and brothers who were under attack.
If you'd have said that unions were a "special interest group" on par with corporations you would have been booed. If you'd have said that taxing the corporations is wrong and cuts to social services are necessary, you would have been mocked.
But, as we've seen, these were precisely the positions taken by Democrats in the recall campaign.
Thus, the whole "Thomas Frank" line about how Wisconsin workers betrayed their own interests is absurd precisely because it assumes that the Democrats stand for advancing those interests. As was to be expected, the Democrats cozied up to Walker's line on every single issue that sparked the rebellion in the first place. And Wisconsin Democrats weren't alone in doing this--they were toeing the same line as their pro-austerity, anti-union counterparts in other so-called "blue states" such as Illinois, New York and California. This isn't a problem of this or that Democrat politician; it's a national problem that concerns the entire Democrat edifice.
Seen in this light, I have a hard time getting worked up over the fact that Walker outspent his Democrat challenger 5-to-1. I also have a hard time getting upset about the fact that the DNC didn't allocate as many resources to the election as it could have. The obsessive focus on funding obscures the substantive political questions facing ordinary working people in Wisconsin, such as how to defend collective bargaining and fight austerity.
So, if you ask me, the tragedy wasn't that the DNC didn't match Walker's massive war chest. If anything, the tragedy was that Wisconsin unions spent so much money funding a candidate that had no intention of fighting for them. That money would have been better spent mobilizing their workers and supporters to take the struggle to the next level when hundreds of thousands of people were on the streets of Madison. A labor movement with a self-confident and energized rank-and-file is worth infinitely more than any election victory for the corporate-friendly Democrats.
In reality, the real defeat didn't happen yesterday. The real defeat was imposed on Wisconsin's 99% a year and a half ago when the Democratic Party suffocated the movement, wound down the protests in Madison, told people to stop occupying the Capitol and decreed from above that the panacea was a long, drawn-out recall campaign to elect Democrats with politics similar to Walker. Speaking from the front of the demonstration, Democrats told us to lay down our placards, go home, and operate through the "proper channels" to garner votes for them. This, we were told, would be represent the full realization of all that the movement stood for. But this effectively snuffed out all of the energy that electrified participants and supporters of the Madison uprising in the first place.
The bottom line is this. The Democratic Party is the graveyard of social movements. Leading Democrats are nothing but corporate-funded opportunists who take and take from dedicated, progressive people, but give them nothing in return.
What's more, it's worth pointing out that the Democrats aren't really even a lesser evil. On the contrary, they are an essential part of a two-party system that serves the interests of the 1% and preserves the status quo. They are two factions of one basically pro-Business party. They are both part of a convenient one-two punch that works wonders for the 1%. When one of them draws the ire of the population it's always possible talk about "throwing the bums out" in order to deflect anger from the system onto a particular mainstream party within it. This virtually apolitical back-and-forth between status-quo party A and status-quo party B does nothing for our side. It leaves us powerless and without voice.
In an era where social struggles the world over are heating up, nobody but the most hardened cynic could say that buying into the two-party duopoly is the best the we can do. Accepting the two-party straitjacket means accepting the fact that the Democrats are under no pressure to pass any progressive reforms since they know that left-leaning voters won't vote GOP. It means accepting that the basic political views of the majority of the population will not be represented at all in formal, representative institutions. When ordinary working people give money, verbal support, and political energy to the Democrats, in effect, they consolidate their own political marginalization and further entrench the dominance of the 1%.
What's the alternative? The very sorts of actions that sparked the Wisconsin uprising in the first place; The sorts of possibilities opened up by the Occupy movement; The months-long struggle of Longview workers to fight for their rights; The inspiring struggle of teachers in Chicago to stand up and defend the future of public education. Succinctly put, the alternative is to mobilize the still unrealized potential of ordinary working people to use their own power to stop austerity, layoffs, foreclosures and all the rest. Once that sleeping giant is awoken, previously unthinkable possibilities emerge. In the 1920s, everyone thought the labor movement was dead in the water, but by the mid 1930s the US was experiencing an unprecedented surge in militant working class activism that shattered those expectations and transformed the social/political landscape for a generation.
We forget at our peril that every single major progressive gain in this country--from free public education to the abolition of slavery, from women's suffrage to Social Security--was won through hard-fought struggle by social movements who set themselves on a collision course with both major parties. Without struggle, there is no progress. We can't expect the licit leaders of corporate-funded political franchises to take care of us. We have to rebuild a fighting, self-confident Left and organize independent social movements that can confront the ruling class head on, no matter which of their two teams is in control in Washington.
Saturday, February 19, 2011
All You Need to Know about Budget Deficits
All you need to know about the budget debates, austerity, cuts, and taxes is this: The basic function of the state in capitalist societies is to secure the conditions for profitability at any cost.
In less jargonistic language, that means that of everything the state does, we can almost always say that it is aimed at restoring, maintaining, or otherwise fostering the conditions in which capitalists can accumulate profits. The health of the capitalist economy, after all, depends on the profit rate being sufficiently high. When it is low, capitalists don't invest and hoard their capital: in this way capital "goes on strike" and makes political demands aimed at restoring profits (see the 1970s for an excellent example of this). In such cases, growth withers on the vine, production grinds to a halt, layoffs are implemented, and tax revenues plummet.
We are all in a relation of dependence on the capitalist class in a way that they aren't dependent on us: whereas they have massive reserves of capital that they're happy to sit on in a recession (which they can live off of in the meantime), we have no such reserves. We don't own any substantial productive wealth or capital to live off of in a recession. The vast majority of us rely on our month-to-month paychecks as well as various social services (e.g. Public Education, Pell Grants, fire protection, public transportation, public infrastructure, Libraries, public grants, Social Security, Medicare, unemployment insurance, etc. etc.) to procure the basic necessities of life. Recessions are far more dire, pressing, and threatening to us than they are to the ultra rich.
Every vital service and virtually all social goods depend upon the health of the capitalist economy, and, by extension, our access to all of these vital services and goods depends upon capitalists getting their way. And capitalists only "get their way" when their earning a sufficiently high rate of profit. What they think is "sufficient" is hard to specify abstractly, and depends on history, expectations, and their class power. But this much is true: when capital is not happy, the economy goes into crisis and everyone suffers as a result.
The function of the state is to make capital happy again so that the whole seedy process can resume. Capital, thus, can be thought of as a whiny, spoiled, short-sighted trust-fund baby... whereas the state can thought of as the underpaid nanny, who will do anything necessary to stop the spoiled brat from throwing a fit. That is the basic relationship between the capitalist class and the state.
Why think this is true? Well, let's look at the major things the state has done in the last 2 or 3 years and see how well it is explained by the model.
Take the bailout, first of all. What was the function of TARP? It was, quite obviously, a policy designed to shift massive amounts of toxic assets from "too big to fail" banks onto public rolls. It was a massive conversion of private debt into public debt. Why did the state do this? In order to restore profitability to the big banks since they teetered on the verge of collapse. So, when people think it odd that the banks are able to use the TARP funds to purchase federal bonds and earn money off the difference... what they're missing is that this is an intentionally designed function of the policy. The goal was to make the banks profitable again, the thought being that "what's good for Wall Street is good for Main Street". Policy makers from both parties agree on this whole-heartedly: the way to get the economy running again is to restore the conditions of profitability for big business.
Or, take another example: the stimulus bill. The basic goal of the bill was the traditional Keynesian one: to prop up effective demand. When you layoff millions of workers, cut their pay, force them into foreclosure and bankruptcy, etc... you create a problem for yourself if you're a capitalist: who is it that is going to buy all the commodities you produce if everyone is broke? The goal of the stimulus was to try to increase the purchasing power of workers in order to enable them to go out and buy things so that profitability can be restored to the system. Now, there is certainly a sense in which the stimulus bill wasn't Keynesian through and through: too much of it included worthless tax breaks for the rich, and the spending component of it was much too small. Still, it is a better solution than the neoliberal medicine of cuts and austerity. But let's be clear: the stimulus wasn't pushed through because of some sentimental concern for the well-being of the working class majority. It wasn't pushed through because lawmakers thought it the most just way to go. It was passed because Washington thought it was key to restoring profitability to the system.
Finally, take one further example: the austerity drives to slash basic services. Why is this happening? There are at least four reasons to explain it:
- For starters, it's happening because the recession severely decreased tax revenues. When companies earn less, tax revenues decrease. When companies layoff millions of workers who then have no more taxable income, that hurts revenues. When workers' consumption plummets, so do sales tax revenues. And when you push down workers standard of living and lay them off, they need to rely more on the very services whose present sources of funding are being eroded. Recessions hurt the state's capacity to do what it does, since it is, like all the rest of us, dependent on the engine of profit accumulation.
- Another reason is that the ways of collecting taxes in place before the recession were, in almost all cases, highly regressive and biased against the working majority. Payroll taxes, which the rich don't pay, tended to be high, whereas taxes on productive assets and property tended to be low. Many states rely heavily upon regressive, high sales taxes. Others, like Illinois, rely upon an ultra-regressive flat income tax that taxes corporate fat cats at the same rate as working class single mothers. The top marginal rate of taxation at the federal level is obscenely low. And there are more loopholes in the corporate tax code than anyone could ever hope to count in one lifetime. Finally, we must note that corporate profits reached record levels last quarter. So, it's false that our society doesn't produce enough to pay its bills. We produce plenty. But the disposition over and control of what we socially produce is limited only to a small class who owns the means of production. The simple, socialist thought here is that we, as a society, should have democratic control over what we, as a society, produce together.
- When there is a budget shortfall, there are always at least two things that can be done: one can cut services or collect more revenue. Since the political system is committed, as I argued above, to securing the conditions for profit accumulation at all costs... the preference for cuts is obvious. Think about it: if you're a corporate elite, you certainly don't want to pay higher taxes. And you don't care a thing about the well-being of the working majority, as evidenced by the fact that you've likely laid off hundreds if not thousands of your employees in order to keep your profit margins intact. You're happy to have the state pick up the slack for your layoffs by giving struggling workers unemployment insurance and food-stamps. But you're not necessarily happy to have to contribute to the state in order for it to provide these basic services. When push comes to shove, you want to keep what you have at all cost. Thus, rather than helping to pick up the tab, you do what you always do: protect your own profits and force the working majority to take a sharp cut in its quality of life.
- At the Federal level, austerity also has another function. Insofar as massive private debt was transferred onto public rolls... this puts even more pressure on the budget. In order to finance the bailout, now we're being told that we have to "live within our means" and accept deep cuts to our quality of life.
So, to understand what's happening from Greece, to London, to Washington, to Madison... all one really needs to know is that be basic function of the state is to secure the conditions in which stable, sufficiently high profits can be made by the ruling class. This has nothing to do with "fiscal responsibility", an empty and ultimately meaningless phrase. This has to do with forcing those least able to fight back to foot the bill for a mess caused entirely by those who own and control the basic structure of our economy. This is a class war being waged on us from above. Those occupying the Capitol in Madison recognize this, and their doing something that hasn't been done enough in the last 30 years in the US. They're saying enough is enough and they're fighting back. If the Democrats in opposition in WI are getting dragged along by this movement, we shouldn't be surprised at their opportunism. But we shouldn't make the mistake of thinking that they're unqualified allies in the struggle. When they are forced to act by big movements on the ground, they behave a lot differently than they do in the absence of struggle. This is instructive.
Saturday, December 11, 2010
Democrats and Tax Cuts for the Rich
Just keep in mind, amidst all of the inane debate over Obama's "strategic" moves, that the Democrats had two years to deal with the Bush tax cut fiasco. Two years in which they had, at one point, a filibuster-proof supermajority in the Senate and massive majorities in the House. House Democrats refused to vote on the tax issue before the November elections. Senate Democrats didn't even publicly agree amongst themselves about whether to give more tax breaks to the rich. Obama, as usual, concedes 90% of his ground up front and expects to get lucky and win 10% of what he was after in the first place (which is usually itself weaksauce). Obama won in 2008 in Indiana and West Virginia, in particular, because he campaigned on the idea of taxing the rich and using it to fund expanded health care coverage. It now turns out that he's not going to follow through on either.
There should be no doubt that the tax cuts should expire for the richest of the rich. The conservatism of the Democrats on this question should be a wakeup call to progressives who still feel compelled to apologize for Obama and Congress.
Wednesday, September 10, 2008
Drifting Rightward
In yet another instance of the rightward drift of a campaign that began much further from ‘reformist’ or ‘progressive’ than many of its followers would like to admit, Obama recently embraced a whole slew of conservative assumptions about tax policy.
In the recent statement, Obama said he would “delay rescinding President Bush’s tax cuts on wealthy Americans if the economy is a recession”, because doing so would “further hurt the economy.”
What should ‘progressive’ Obama supporters giddy about ‘change’ take from this statement? The simple, often-repeated neoliberal dogma that: Tax cuts always create growth and tax increases hurt the economy. Reagan, Norquist and Gingrich couldn’t have put it better themselves. Way to totally undermine the rationale for having taxes at all.
In the same statement, Obama went on to assure us that “even if we’re still in a recession, I’m going to go through with my tax cuts…that’s my priority”. Because remember: we can’t talk about how to go about funding irrelevant things like health care, social security, education, national infrastructure, natural disaster relief, etc. The only thing to do is to inject the private sector with some ‘dynamism’ and to find ways to ‘give people’s money back to them’… i.e. regurgitate the policy of the Bush Administration.
Now try this one out. Who said this: “We can get this economy back on its feet… get it going again. Don’t raise their taxes. Americans are hurting in a way that they have not hurt for a long time”… Obama or McCain?
