Bush Tax Cuts Turn 10: Wall Street Celebrates, Americans Suffer
Break out the bubbly, because there will be celebrations today on Wall Street and in corporate boardrooms and mansions all across America. Why? Because today is the 10th anniversary of the big Bush tax breaks for bankers and billionaires and the businesses that bankroll their big-budget campaigns.
Today is an opportunity to ponder these questions: If the Bush tax cuts are so great, why has the economy been so bad since they became law 10 years ago? And how about this brain teaser: If the GOP theology of cutting taxes for the rich brings in more revenue, why is Democratic President Bill Clinton the only president in the last generation to leave a surplus behind for the next president?
In 1980, President George H.W. Bush called it voodoo economics. Bush 41 conveniently changed his position when he became Ronald Reagan’s running mate that year. But the first President Bush was right the first time. The idea that tax revenues will go up when you cut taxes has cast an evil spell over the U.S. economy going all the way back to Ronald Reagan. In 1981, the new GOP math became 1 + 1 = 3. With this kind of fuzzy math, it’s no wonder that President Reagan left behind a massive budget deficit.
George W. Bush may have had George H.W. Bush for a father, but Ronald Reagan was his role model. The latest incarnation of voodoo economics was the creation of the second President Bush. The tax cuts for bankers and billionaires that became law in 2001 quickly turned the Clinton surplus into the Bush budget deficit as big as Donald Trump’s ego. Voodoo is what Republicans do so well.
But Bush 43 did not stop there in handing out goodies to Wall Street. In 2008, the president asked his Treasury Secretary, Henry Paulson, the former CEO of Goldman Sachs, to bail out Goldman Sachs and other Wall Street investment firms to the tune of three quarters of a trillion dollars. Of course, President Bush never even considered an attempt to rescue the millions of working Americans who first lost their jobs and then their homes because of malfeasance on Wall Street.
Last month, the Center for Budget Priorities released a study that demonstrated that the two biggest reasons for the current budget deficit were the Bush tax cuts and the wars in Afghanistan and Iraq. So what do the Republicans do? Do they vote to cut Pentagon spending or end dole welfare for wealthy Americans? Of course they don’t. They gut Medicare. Genius!
Yesterday, Frank Patitucci, CEO and Chairman of NuCompass Mobility Service, called on Republican Speaker John Boehner to increase taxes on Americans making more than $1 million a year. Patitucci explained his position by saying businesses need a strong middle class to prosper.
But I don’t want to be a party pooper or rain on Wall Street’s parade, so party hardy, guys. Don’t scrimp on the Dom Perignon and the caviar. Santa Claus comes only once a year. Let’s worry about the GOP cuts in healthcare for seniors and nutrition programs for women and their infant children another day.
By: Brad Bannon, U. S. News and World Report, June 7, 2011
Not Resting On Their Laurels, Wisconsinites Establish Walkerville
Walkerville, Wisconsin
After the huge wave of protests throughout February and March, the focus of activists in Wisconsin moved to the impending recall elections this summer. The winter actions erupted as a result of an anti-union bill which threatened to remove essentially all collective bargaining rights for public employees as well as hamstring unions by requiring the almost impossible tasks of annual recertification and individual opt-in dues collecting. In response, besides assembling in numbers reaching nearly one-hundred thousand, Wisconsin citizens amassed signatures on petitions to facilitate the recall of numerous state senators who had voted for Governor Walker’s duplicitous legislation.
In the past two months, though a presence of protesters has remained – with their t-shirts, buttons, signs, banners, vuvzelas – around the vicinity of the capitol building, it appeared the united front of thousands had waned. Groups still came to meet for solidarity sing-a-longs and to attend governmental committee hearings on the many new regressive, pro-corporate, anti-human bills being forwarded by the Wisconsin legislature. But with the recall elections on the horizon and with the recent small victory of the Dane County circuit court dismissing the anti-collecting bargaining law (as it had been passed so hastily as to not adhere to common legislative requirements), it appeared that Wisconsinites might be done with the fight, resting on their own laurels and those of the Democrats they hoped to elect via the recall.
Of course, the corporate media, who operate under the same anti-human system that fosters plutocracy and redistribution of wealth from the many to the few, would like nothing better than to make it appear that all is “back to normal” in the cheese state. So, perhaps few people outside of Wisconsin and even outside of Madison realize that we were serious when we said that this was not a protest but a movement. There is much yet to be accomplished.
As of 7pm on Saturday, June 4th, a diverse group of citizens, representing unionists, non-union workers, students, teachers, immigrants, farmers, families and people with no formal affiliation (save for being a part of the empathetic class who truly seeks liberty and justice for all) laid down their tents and founded “Walkerville” around the perimeter of the Wisconsin capitol building. With a nod to the Hooverville tent cities of the Great Depression, these activists are demonstrating that we are not only opposed to the aforementioned anti-union bill, but that we are opposed to the entire regressive budget of this state, which wholly removes the rights and social safeties for the most vulnerable members of our society and shifts all of the state’s bounty to the wealthiest and most anti-social corporate oligarchs. The police state enacted by the Walker administration has severely hampered the lawful and peaceful assembly of citizens in our own statehouse, so Walkerville exists to re-establish the constant presence and occupation by the people of the state, whose voice is being muted within the capitol.
Most importantly, Walkerville demonstrates that we in Wisconsin are not going to let up. Just as we are being attacked on all fronts as citizens, we will be fighting back on all fronts. Though the Democrats in our state legislature have stepped up to the plate and helped to support the will of the people, it is unlikely that they would have done so had their feet not been held to the fire. If we had not gathered in the capitol clearly proclaiming our will, our presence, and our solidarity, it is not clear the state Democrats would have had the impetus to help us fight. Thus we know that simply electing new officials will never be enough to ensure justice for the people from the government.
States like New York and California serve as prime examples of how the Democratic agenda is just as corporate as the Republican. Governor Andrew Cuomo, the son of a man once considered one of the strongest liberals in NY State history, is promoting many of the same brutal and unnecessary cuts to education and poverty programs. The underserved of California are faring no better under Jerry Brown. If we citizens fail to realize that we must pressure ALL politicians of all politician affiliations, and we must be prepared to fight indefinitely against the bipartisan corporate takeover of our local, state, and federal our government, we are sure to lose.
Walkerville signifies the fortitude of the Wisconsin people, and the recognition that our struggles as citizens are not soon to end. Our actions may take new forms or may morph as they are reassessed for utility, but they are far from over.
For those of us in Wisconsin who cannot camp out day and night around the capitol but still want to volunteer with the movement, there are numerous opportunities to be present for more protests and actions against the state budget, which will be negatively affecting all of us. (See Defend Wisconsin for full details.) For those in other states who will likely see similar developments, please know that we are still fighting, as you will surely have to fight too. The more we acknowledge that this struggle against the ruling class will be ongoing, that it affects us all, and that we may not ever be able to “return to normal,” the more likely we may have a fighting chance for our future.
Tennessee Ushers In Era Of For-Rent Politicians With New Campaign Finance Law
During the 2010 election season, we heard Republican candidates from coast to coast run on creating jobs. In the 2011 Tennessee legislative session, the Republican majority forgot that message and went after teachers and teacher unions. Any other year this would have been enough to make the staunchest conservative proud, but in a session where Republican legislators presented bills by non-citizens with corporate interests, according to the Tennessean, the measure of success was also to include rewriting existing campaign laws to lift the ban on corporate donations. The ban was lifted late Wednesday when Gov. Bill Haslam signed into law SB 1915, which allows direct corporate donations to candidates.
SB 1915 changes existing law T.C.A. § 2-10-131 which did read: “No corporation may use any funds, moneys or credits of the corporation to make contributions to candidates. This means corporations are prohibited from making contributions to any PAC that supports the election or defeat of any candidate.” This has been nullified and allows for direct contributions without penalty.
For the first time in Tennessee history, direct corporate contributions to candidates and political parties will be allowed.
“This basically would just level the playing field, because unions are allowed to do this by statute now,” said Sen. Bill Ketron, R-Murfreesboro, according to the Nashville City Paper. Ketron was in the spotlight earlier this year, along with House Speaker Pro Tempore Judd Matheny, for introducing and sponsoring legislation they introduced without reading.
The argument for passing such legislation to allow the influx of corporate money into Tennessee politics was based on fairness. Republicans were quick to point to unions and their political action committees as justification of needing this change, implying that P.A.C. money was unfairly going to the Democrats. This was not the case.
When we examine the numbers, we find that it is the Republicans who are benefiting from PAC money by a margin of $3-$1, reports Knox News. SB 1915 was written to become law as soon as the governor affixed his signature to the bill. So corporate America, Tennessee is now open for business: You are free to directly contribute to any candidate you wish.
The 107th Tennessee General Assembly’s 2011 session was one filled with controversy and fundamental changes to our state’s political structure. While the majority worked to silence one voice in government, they simultaneously opened the door to another. Republican supporters of SB1915 contend that they are complying with the Citizens United ruling that extends First Amendment rights to corporations and lifts prior bans on corporate independent expenditures. Critics of the bill contend that it will lead to a decline in good government and pit legislators against each other for corporate donations.
In a time when citizens are getting more impatient with their representatives, how does allowing corporate influence increase accountability? The financial summary of SB1915 shows that it will actually cost taxpayers money to implement. Not only do the taxpayers get silenced by corporate interests, they get to pick up the tab of implementing the changes. Gov. Haslam has signed the bill and it is now law in Tennessee. Let the era of rental legislators begin. May the highest bidder win.
By: Chris Robison, Associated Content, June 2, 2011
Gov. Rick Scott May Personally Benefit From New Law That Hands Medicaid Program Over To Private Companies
Florida Gov. Rick Scott (R) signed “a landmark Medicaid overhaul” yesterday that will put “hundreds of thousands of low-income and elderly Floridians into managed-care plans.” The proposal “gives managed care companies more control over the program that’s paid for with federal and state money,” a shift the state GOP claims will “hold down spiraling costs in the $20 billion program.” However, as TP Health editor Igor Volsky pointed out, a five-county pilot program in Florida already revealed that such a plan produces “widespread complaints and little evidence of savings.” Under managed care, states “have to ensure that private payers aren’t looking out for short term profits by denying treatments or reducing reimbursement rates” and — given what occurred during the pilot program — the results “are already less than promising.”
But Scott may have another reason to push a dubious bill into law. As Mother Jones reported, one of the private managed-care companies that stand to gain from the new law is Solantic, “a chain of urgent-care clinics aimed at providing emergency services to walk-in customers. Solantic was founded in 2001 — by none other than Rick Scott:
The Florida governor founded Solantic in 2001, only a few years after he resigned as the CEO of hospital giant Columbia/HCA amid a massive Medicare fraud scandal. In January, according to the Palm Beach Post, he transferred his $62 million stake in Solantic to his wife, Ann Scott, a homemaker involved in various charitable organizations.[…]
“This is a conflict of interest that raises a serious ethical issue,” says Marc Rodwin, a medical ethics professor at Suffolk University Law School in Boston. “The public should be thinking and worrying about this.”
Scott’s office dismissed the conflict of interest concern as “incorrect and baseless.” However, Scott’s history of fraud with entitlement programs (in that case Medicare) should certainly raise a red flag here. And it is not as if Scott is completely clean when it comes to the mix between professional office and personal interest.
Incidentally, Scott also just signed a bill that will require anyone applying for welfare benefits to pay for a drug test to qualify for benefits. They will only recoup that fee if they pass. One company that provides such drug tests? Solantic.
By: Tanya Somander, Think Progress, June 3, 2011
The Limits Of Free-Market Capitalism
Until a few years ago, my spiritual devotions were limited to the free market and the music of Patsy Cline. I’m sorry to say it’s just me and Patsy now.
Karl Marx may have been wrong where it really mattered—communism, to paraphrase Churchill, is government “of the duds, by the duds, and for the duds”—but he was spot on about the pitfalls of capitalism, particularly when it came to the entrenchment of social classes, the fetish of consumption, the frequency of recession, and the concentration of industry. Yet, like trained seals, we continue to leap through the flaming rings of a system that is contemptuous of the public good while rewarding those who feed off “free” markets and the politicians who rig them. Nearly three years after the global economy almost collapsed under the weight of a corrupt and inbred financial order, Washington is still mired between the false choice of the state or private enterprise as the proper steward of the general welfare.
It should be clear to anyone who has lost a cell phone signal in our nation’s capital or been denied health coverage because of a pre-existing ailment that capitalism’s endgame is not freedom of choice and efficiency, but oligarchy. Many of America’s top industries—agriculture, airlines, media, medical care, banking, defense, auto production, telecommunications—are controlled by a handful of corporations who fix prices like cartels. As Marx predicted, the natural inclination of players in a market-driven economy is not to compete but to collude.
Reporting in Asia and the Middle East for many years, I prayed to the same kitchen gods of untrammeled commerce that now bewitch the Republican Party faithful and the neoliberals who inhabit the Obama White House. In Asia more than a decade ago, I covered the liquidation of state assets as prescribed by the International Monetary Fund, perhaps the largest-ever transfer of wealth from public to private hands, as if it were a new religion that would transform economies from the Korean peninsula to the Indian subcontinent. Laissez-faireism, I wrote, would liberate consumers and domesticate once overweening state-owned enterprises.
In fact, privatization merely shifted economic control from corrupt apparatchiks to their allies in business, a transaction lubricated with kick-backs and sweetheart deals. That’s what happened in the Middle East, and it became the spore that engendered the Arab uprising.
The corruption of capitalism in America is all the more appalling for its legality. With the economy still struggling to recover from a housing crisis fomented largely by Wall Street’s craving for mortgage-backed securities, prosecution of those responsible has been confined to a single lawsuit filed by the Securities Exchange Commission against a lone financier. The system is still lousy with loopholes, and the Republican Party, which demographically as well as ideologically is becoming a gated community for white, southern males, is calling for more deregulation, not less.
Which brings us to the central failure of American capitalism: the excoriation of the state.
So deep is the mythology of the free market that we ignore the consequences of starving our schools, libraries, public media, and roads and railways. We expect our teachers to assume the burdens of parenthood and then blame them for failing education. We lament our dependence on foreign oil and the aviation cartels, but we refuse to underwrite a passenger-rail equivalent of the interstate highway system. We disparage the coarse reductionism of corporate-owned news outlets while neglecting public broadcasting, an isolated archipelago of smart, responsible journalism.
Our hostility to the public sector—fountainhead of the Hoover Dam, Mount Rushmore, the Golden Gate Bridge, the Los Angeles Coliseum, our national parks, and countless other public utilities and services in addition to the federal highway system—is inversely proportional to our reverence for private consumption. As the economist John Kenneth Galbraith wrote in his 1958 book The Affluent Society, “Vacuum cleaners to ensure clean houses are praiseworthy and essential in our standard of living. Street cleaners to ensure clean streets are an unfortunate expense. Partly as a result, our houses are generally clean and our streets are generally filthy.” Galbraith also noted the uniquely American conceit of sanctioning debt when households and private investors hold it but condemning it when governments do.
Should the feds nationalize banks and appropriate soy fields? Certainly not. At its essence, there is probably no more efficient way of establishing the price of a particular good or service than market economics. Not all transactions are so simple, however, and there are some services—healthcare, for example, or transportation—that often fare better more as public goods than as private commodities. In order to save American capitalism, we must appreciate its limits even as we struggle to harness its power.
By: Stephen Glain, U. S. News and World Report, June 2, 2011
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