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“America Is A Democracy, Not A Plutocracy”: It’s Time To Show The Rich And Powerful Who’s Boss

Who is in charge here, anyway? That, more than sequestered spending or how much we raise in new taxes, will be the most important question resolved by this “fiscal cliff” stand-off between President Obama and the GOP.

More than Republicans and Democrats forging an elusive consensus on shrinking the nation’s deficit, the real question before the country in these debates over debt is whether the American Republic has within it the will and the means to make its most powerful elites pay “just a little bit more,” as the President likes to say, at a time when those elites are determined to resist. And as we sit here today, the jury on that question is still out.

The power to tax may be the power to destroy, as the old saying goes. But as historian Francis Fukuyama reminds us, the reverse is also true: “Scandalous as it may sound to the ears of Republicans schooled in Reaganomics,” he says, “one critical measure of the health of a modern democracy is its ability to legitimately extract taxes from its own elites.”

Those who have ever been to places like Jamaica and seen ramshackle shacks side-by-side with mansions behind their high, stone walls and iron-barred windows know Fukuyama is right when he says the most dysfunctional societies are those in which elites are able to either legally exempt themselves from taxation or evade it and thus shift the burden of public expenditure onto the rest of society.

There is another old saying among students of American politics: “The President proposes and Congress disposes.” Well, the new rule, as Bill Maher might say, seems to be that in America today the Plutocracy proposes and Congress – or at least that part of Congress that is Republican – does as it is told.

Listening to the supposedly sensible Republican Senator Tom Coburn on MSNBC’s “Morning Joe” program earlier today dodge and weave every time the show’s hosts tried to pin him down on whether Republicans could agree to increasing income tax rates on the rich, it quickly became apparent that when Republicans say we shouldn’t raise taxes on the rich what they really mean is that Republicans can’t.

When Republicans say taxes on the rich cannot go up, that is not a bargaining position. It’s an admission of weakness that Republicans literally can’t make it happen — either because their rigid ideology won’t let them or because Republicans have lost control of their own party. Maybe both.

Republican heretic David Frum helps shine a light on why Republicans are so boxed in on tax rates and why they are reduced to vague talk about closing loopholes and deductions with no specifics or numbers attached.

According to Frum, it’s okay for Republican lawmakers to advocate raising “revenues” by closing unspecified loopholes because upper-income Republicans in red states, like Texas, don’t really have that many deductions to begin with.

Deductions for state and local taxes don’t interest wealthy Texans because Texas doesn’t have a state income tax at all, he says.

“Nor is the mortgage interest deduction a matter of life or death,” says Frum, since housing prices are comparatively cheap in the Lone Star State, unlike blue states like New York or California where housing is more expensive, as are taxes.

“What Texas does have, however, is a lot of very high incomes who care a great deal about tax rates,” says Frum. And so the GOP’s big donors are willing to throw loopholes over the side, says Frum, since in the battle between the “ordinary rich” and super-rich, deductions matter a lot more to people earning $400,000 than to people earning $4 million or $40 million.”

That is why the Republican Party’s billionaire backers have sent the word out that there will be hell to pay if Republicans let tax rates go up even a fraction of a point on those making more than $250,000.

Republicans do their best to disguise their emasculated feebleness by whining that raising tax rates 4% would only bring in about $50 billion a year – chump change, a drop in the bucket, they say – while promising to bring in lots more dough by closing unnamed loopholes or through that fog bank of imprecision known as “tax reform.”

But rates going up on the richest Americans is off the table as far as Republicans are concerned. It is a non-starter, with violators punished by no-nonsense warnings of a leadership coup or, even worse, an intra-party civil war as conservative secessionists carry out their threats to abandon the GOP, en masse, and form their own ultra-right party.

One manifestation of the dysfunction affecting American politics is that once the Republican Party has dug in its heels and decided not to do something, their obstruction sets the terms of debate and the starting assumptions for the rest of the Washington Establishment.

When Republican’s wealthy benefactors decide they will tolerate no compromise on rates – none – the rest of us are expected to accept that recalcitrance as a “given” and work around it.

To confront that presumption head-on and challenge it directly, as President Obama has done – to declare that America is a democracy not a plutocracy by insisting that no deficit-reduction package will be signed by him unless Republicans agree to increase tax rates on top income earners – that is what Republicans mean when they say the President is “politicizing” an issue or “failing to show leadership” by either capitulating to Republican demands or neutralizing the negative consequences of the Republican Party’s own intransigence.

“President Obama has an unbelievable opportunity to be a transformational president – that is, to bring the country together,” said Speaker Boehner lieutenant Pete Roskam of Illinois. “Or he can devolve into zero-sum-game politics, where he wins and other people lose.”

You can tell Charles Krauthammer understands the Republican’s inside game here because the master propagandist accuses President Obama of playing it.

The President’s insistence Republicans put their big donor’s money where their mouths and show they are serious about deficit reduction “has nothing to do with economics or real fiscal reform,” says Krauthammer. “It is entirely about politics.”

How true, about Republicans I mean. Likewise, in response to news the irreconcilable right intends to launch a leadership coup or third party challenge should Republican leaders go along with the 70% of Americans who say they want taxes raised on the top 2%, Krauthammer accuses the President of bargaining in bad faith by making offers “designed to break the Republican opposition and grant him political supremacy.”

This is why, for example, Krauthammer says Obama sent Treasury Secretary Geithner to Republicans “to convey not a negotiating offer but a demand for unconditional surrender.”

Accusing ones opponents of that which you are most guilty of yourself is a well-traveled tactic on the right. And what’s obviously got Krauthammer most incensed is the dawning realization from the President’s less conciliatory posture since election day that two can play at the Republican’s give-no-quarter game.

The seeds for America’s political dysfunction were sown 30 years ago when Ronald Reagan and the Republican Party made the fateful decision to favor Wall Street over Main Street, finance over manufacturing, as America’s signature industry.

The inevitable concentration of wealth this favoritism produced empowered a narrow economic elite with the financial resources to capture a political party and then use that party to capture the nation’s government.

It was just as those early Jeffersonians foretold more than 200 years ago when they worried about those “Anglomen” who stood to profit from Alexander Hamilton’s scheming over the National Bank and a Commercial Republic far more entranced by pecuniary promises of profit than the public-spirited virtues of civic republicanism.

And since 1980 all of these ancient fears have come to pass as a greater share of the nation’s wealth has fallen into fewer and fewer hands – 25% of income and 40% of assets controlled by 1% of the population – with the predicable distortions this concentration of economic power has had on the American political system.

A GOP that is the wholly-owned subsidiary of that super elite “may no longer be a normal party,” wrote David Brooks at the height of the debt ceiling crisis 18 months ago.

Brooks was outraged when Republicans passed on what he called the “mother of no brainers” by turning down a perfectly good deal with Democrats to resolve the impasse because, in Brooks’ view, Republicans a.) have been “infected by a faction that is more of a psychological protest than a practical, governing alternative;” b.) do not accept the logic of compromise, no matter how sweet the terms; c.) do not accept the legitimacy of scholars and intellectual authorities; d.) have no sense of moral decency if they can talk so “blandly of default” and their willingness to “stain their nation’s honor”; and finally e.) have no economic theory worthy of the name since tax levels are all that matter to them.

There are sound economic arguments for reducing debts and deficits – maybe not now while unemployment is still high and interests rates low, but over the long term. But there is none – none – for taking upper income tax rates off the table as part of the final deficit-reduction agreement. And the only reason we are hung up on taxes for the top 2% is that this powerful special interest thinks it can flex its muscles and vacate the verdict of a national election by getting its demands met regardless of majority public opinion.

“The conservative insurgents of today argue that their anti-tax cost cutting agenda is designed to revive the economy, boost the job market and get America on the move again,” writes Thomas Edsall in The Age of Austerity: How Scarcity Will Remake American Politics.

“There is, however, another equally probable motivation,” he says, “that this cashiering of moral restraint on the Right reflects its belief, conscious or unconscious, that we have reached the end of the American Century.”

In that event, says Edsell, the “adamant anti-tax posture of the Right” can be seen as “an implicit abandonment of the state and of the larger American experiment — a decision that the enterprise is failing and that it is time to jump ship.”

The real news on the American right, agrees professor Mark Lilla “is the mainstreaming of political apocalypticism” led by people he calls “redemptive reactionaries” who think the only way forward “is to destroy what history has given us and wait for a new order to emerge out of the chaos.”

Once there was a conservative Golden Age, these reactionaries believe, where the world was ruled by the “Best and Brightest,” the “job creators,” Ayn Rand’s “makers,” and the top 2% who now threaten punitive action against Republican leaders or civil war within the party if their non-negotiable demands against tax hikes are not met.

But then came the New Deal, the Great Society and the civil rights movements of the 1960s that emancipated heretofore marginalized minorities of all kinds – in other words “an apocalypse” so horrible in its consequences that the only sane response was “to provoke another in hopes of starting over,” says Lizza.

And ever since, these reactionaries have been working toward a counterrevolution “that would destroy the present state of affairs and transport the nation, or the faith, or the entire human race to some new Golden Age that would redeem aspects of the past without returning there.”

Grover Norquist’s “no tax pledge” perfectly captures the Judgment Day spirit of this reactionary mentality. So does the Senate filibuster. So does the so-called “fiscal cliff,” which itself is the apocalyptic can Democrats were forced to kick down the road to escape the calamitous consequences of the first Doomsday can Republicans constructed 18 months ago by refusing to raise the debt ceiling and allow the government to pay its overdue bills, thus pushing the nation to the brink of insolvency for the first time in US history.

And so, when Republicans assail President Obama for trying to make a political “statement” when he insists that taxes on the wealthy must go up as part of this deficit-cutting deal that Republicans demanded in the first place, it’s good to remember that this is a valuable statement to make, since every once in a while it’s important to remind these rich and powerful “redemptive reactionaries” just who’s boss.

By: Ted Frier, Open Salon Blog, December 7, 2012

December 8, 2012 Posted by raemd95 | Politics | Conservatives, Economic inequality, Fiscal Cliff, GOP, John Boehner, Plutocrats, Republicans, Tax cuts, Tax Rates | 3 Comments