Category Archives: Tax legislation

I Was an Eighth Grade Communist (and Other Reasons to Vote for Bernie Sanders)

bernie

This really happened. In the eighth grade, prodded by Ms. Spiver, an enthusiastic teacher with an enlightened vision for an open classroom, I had the opportunity to research different governing systems.  I chose communism because the name sounded cool and appeared to frighten everyone. I read about Marx and Lenin and the proletariat of the state and the main idea which I glommed  was to ensure everyone’s basic needs were met. This seemed grand, generous and even beautiful. I quoted the Encyclopedia Britannica at length, and with a flourish, scribbled out three pages in long hand, ending the paper with a makeshift version of the iconic hammer and sickle.

I thought Ms. Spiver would be proud.

The next day I was called into a parent/teachers conference.  This was in Raleigh, North Carolina circa 1976 when the rabid anti-communist Senator Jesse Helms graced the Channel six news editorial spot which my father listened to every. single. night.

Ms. Spiver was all ‘tender mercies!’ and ‘Lord child!’ and ‘where did you get such ideas?’ and I wasn’t sure if she was as concerned about my paper and my education as the possibility that Mr. Creigh, who  substituted as an insurance agent on days when he wasn’t playing the principal, might take serious offense. But I explained, and even defended as best I could the idea of equality, and everyone getting what they needed, these all seemed like fine goals. What was the problem?  Ms. Spiver, to her credit, did not try to correct my initial interpretation, but merely advised that my opinion on the matter was somewhat out of step with the adult population of Raleigh, North Carolina circa 1976. Mom and dad ushered me home, silent in their Buick. Dad finally parked the car in the lot and turned and proceeded to give me the low down. “Communists are bad because they represent a totalitarian system. They don’t allow freedom.  You understand?”

I nodded my head.

“Okay?”

“Okay.”  That sounded like something to avoid. And the tone in my father’s voice was enough for me to forget my flirtation with alternate political systems until high school when we began looking at the social democratic governments, and I found myself once again intrigued by the idea that a government would be based on people getting what they absolutely needed; regardless of their jobs, social stations or life situations.

Denmark, Finland, Sweden, England, to a lesser extent, Germany and Spain. If all these countries pursued such programs, why didn’t we?

My father, with the patience of Job, once again explained what he thought should have been obvious.

“What if I just gave you a dollar every week instead of letting you earn a dollar by mowing the lawn? Hmmmm?”

“I’d have a dollar but I wouldn’t have to mow the lawn.”

Yes, he conceded, okay, but that’s not the point. The point is if you give people something for nothing they’ll take advantage of it. Like all those welfare queens.

By this time, Ronald Reagan was running for high office and was denouncing shady welfare queens that rode around in Cadillacs and bought caviar with tax payer’s money. This activity rankled the hell out of Jesse Helms who never missed an opportunity to denounce the welfare moochers.

Do you want to be a welfare queen?

I decidedly did not want to be a welfare queen. I gathered from my father’s tone that I was not supposed to like the idea of riding around in a Cadillac, eating caviar at the tax payers’ expense, no matter how much fun it might appear.

By the time I entered college, Reagan was in his second term. Taxes had been slashed and the poorer residents of mental homes were dumped onto the city streets.  Despite the loss of tax revenue, billions were being funneled into such patently absurd pursuits as an armed space shield; a so called ‘star wars’  shield that would provide cover for the Western Hemisphere by shooting down missiles aimed to blow up our cities. Since there were none and since billions were being funneled into a useless and unworkable program while the homeless and mentally handicapped were left to fend for themselves, (many times I stood in line with them at the local 7-Eleven), I wrote a few college paper editorials suggesting this kind of activity was ill-advised. I proudly signed my name.

My college Spanish teacher, a middle aged Cuban exile, caught up with me one day.

“I have read what you have written,” she whispered, “You are part of this nuclear freeze movement, too, no?”

“Yes.” I said. Sure I was. Who wouldn’t  be opposed to nuclear weapons lying around waiting to obliterate the world 200 times over?

“Are you a communista?”

Of course I wasn’t a communista! What had that to do with the nuclear freeze movement? But, for her, the nuclear freeze movement was loaded with fellow travelers and communist sympathizers and what not. I tried to ease her mind by telling her I wasn’t a communist, closer to a  democratic socialist, really. This did not appear to help matters.

“You know I come from Cuba. There, when Castro came to power, he forced my family into exile. We had a mansion and servants in Cuba, but when I came to this land, I had to cut my hair and sell it, just to survive. Can you imagine?”

I really couldn’t. “So you were very rich,” I said, “That must have been nice.”

“They stole everything!”

“Right. But now Cuba has much better infant mortality and death rates. It has one of the best medical systems even by Western standards. Cuban doctors help poor people all over the world.”

“So you are a communista!”

“No, I’m not. If I’m anything, I’m a social democrat, like in Finland.”

“It’s the same.”

“No, they’re really different.”

And so I went on to explain to her that one could be a social democrat without falling in lockstep with state run economies like in Cuba or the Soviet Union.  In fact, one of the best examples of social democracy operates as the capitalist heart of Europe: Germany. “They have what they like to refer to as a social market economy. They try to combine the virtues of a market system with the virtues of a social welfare system. You can get a free education, even free higher education, free healthcare and free retirement. Some of your basic essentials are guaranteed by the government, but other stuff, like where you work or what you make is dictated by a private sector economy. Of course, you pay taxes for these things, but the government operates to redistribute the money so it benefits everyone. That is social democracy in a nutshell.”

“It will never work,” she advised me, predicting Germany’s downfall by the end of the decade.

That was 1987. Germany’s still around. It’s 2015. Germany still provides free healthcare, free retirement and free higher education and it is still one of the strongest economies in Europe.  Our economy, conversely, is dogged by huge gaps of inequality, a dysfunctional healthcare system moderately improved by the ACA, insanely expensive higher education costs, and a retirement system whose paltry offerings are even now threatened by reactionary politicians. Our incarceration rate is the highest in the world. Our homicide rate is one of the highest. Our infant mortality rate is higher than Cuba’s and is comparable to Serbia. You read that right, Serbia. None of these things are natural or necessary. They are by design because we refuse to grow up like the rest of the civilized Western world and insist on the fairy tale version of capitalism that doesn’t require any funding for public infrastructure or social services beyond the absolute bare essentials. The only thing we want to pour money into is our vastly over sized military which has caused many more problems in the last few decades than it has solved.

The  majority of the Western industrialized world embraces some form of socialized democracy. In our own country the most successful government programs are inherently socialized: Medicare, Social Security. And, of course, our own Defense Department is an almost entirely socialized bureaucracy.  We have patches of socialism all over the place, but the rightwing has done an excellent job demonizing the term. In fact, the last time someone claiming to be a socialist ran for President was nearly a 100 years ago.   His name was Eugene V. Debs. He famously said when he was convicted of violating the Sedition Act in 1918, that “while there is a lower class, I am in it; while there is a criminal element, I am of it; while there is a soul in prison, I am not free.” Ringing words that beautifully encapsulate a social democrat’s world view.

It’s become increasingly obvious that a strictly free market agenda is disastrous for a people and an economy. One only need look at Kansas under Brownback’s ideological leadership. The state’s surplus has been turned into a catastrophic black hole of debt through a combination of tax cuts for the wealthiest and slashing of public funds. One could see the same disastrous pile up under George W. Bush’s leadership.

The Spanish teacher who accused me of being a communist told me that I needed to ‘grow up.’ The nice thing about Bernie Sanders candidacy is that it  is already grown up.  It assumes responsibility for everyone in the nation, not just those that manage to make the cover of Forbes.  He has tirelessly advocated for the poor and the underclass and, unlike the vast majority of American politicians, assumes it’s okay to travel coach class.  But don’t take it from me that Sanders knows what he’s talking about or that social democracy is a mature governing principle. Take it from that flagship of capitalism, the Economist. In a 2013 article, that magazine declared the social democratic Scandinavian countries, “probably the best governed in the world.”

So there’s no need to carry on with this charade that the ‘socialist’ option cannot win.  We can. Actually, in many areas, we already have. Si, se puede, baby. The only real question is, how soon before the rest of us grow up?

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‘Death’ and the Austerity plan

Death Of A Salesman, Opening Set Rendering by Jo Mielziner, 1949(Death Of A Salesman, Opening Set Rendering by Jo Mielziner, 1949)

Last night I saw the Richmond’s Fire House Theatre production of Death of a Salesman—a riveting performance by a nearly flawless caste. This morning I woke to news that the ‘Washington consensus’ was forming around a compromise for the so-called fiscal cliff that will involve raising the Medicare eligibility age to 67.

That means while the wealthiest 2 percent of Americans will have to pay a bit more from their slush funds, millions of Americans will be required to work an extra two years in order to retire without fear of losing their savings or home because of an unanticipated illness. They could have retired at 65, using early retirement, but without affordable healthcare how is that feasible? Where does a person turn if they are 65 years of age and Medicare eligibility age is 67?

Perhaps for those with desk jobs or a relatively untaxing work life, those extra two years won’t mean that much, but for many Americans, this is an extra two years of hard labor, arbitrarily tacked onto a lifetime of sweat and struggle—and an extra two years can amount to a life sentence when you’re over sixty. Ask Willy Loman.

In the political calculus, let’s not forget him. Our Willy Lomans are still out there. Hammering in nails, petitioning on the street corners, working in the grocery stores and fast food restaurants, waking up sore with headaches from the night before, not sleeping well, worried about their children’s future, worried about their own. Many are not salesmen in the traditional sense any longer. The jobs and the demographics have changed since Arthur Miller’s play debuted nearly 70 years ago. Today our Willy Lomans are poor parents, single fathers or single mothers (in fact, females make up the majority of Medicare recipients), stretching to make ends meet when the car breaks down and they have to use their grocery money for repairs. Shall we make them work an extra two years so that a millionaire may preserve a bit more of his on hand cash?

Many others are immigrants who work all day landscaping our corporate scenery or toil in our fields to bring us cheap lettuce, tomatoes and grapes. They sweat under the sun, survive in crowded corners of our cities, or further out in dirty shacks provided for day laborers, stacked one on top of the other, far from our eyes and our thinking. Those are our Willy Lomans, too. With this deal, we’re telling them to work another two years in the sun, digging ditches, pounding nails, living like animals so that our millionaire congress can ‘save face’… That’s fair, right?

At the heart of Miller’s play is the cry of the dispossessed, of those who do not ‘make it’. Willy goes to his manager, exhausted beyond words, tells his young boss—who he helped name as an infant—that he just can’t continue traveling anymore. But there’s no place in the system for a Willy Loman who doesn’t travel 700 miles in a day, wearing holes in his shoes, lugging his valise. The young boss blows him off at first, and then finally fires him. The moment breaks Willy’s heart, and ultimately his mind. The question Miller asks is still with us: what do we do with our used up citizens, our jobless, our elderly, our permanently poor who will be shunted aside and ignored once again, our perennially homeless? They will find no new hope in this deal. Rather, what little help they might have received will be bartered away on the altar of an ill-timed austerity fix. Hundreds of thousands are still without work, millions who work must take jobs they find both demeaning and demoralizing because their chosen career path is no longer viable. Yet we will require two more years of their service; and no extra help for anyone who can not manage to be so lucky. That’s fair, right?

Death was the only escape Willy saw out of the cruel necessities of the system in which he was immersed. “What’s the secret Ben,” he asks his brother plaintively in one of his dream locutions before the end of the play. Ben, ever the adventurer, answers with a non-answer, “You go into the jungle and you come out rich. You go into the night, Willy and you come out with diamonds.”

It’s a nice thought, a romantic thought, probing the heart of the American dream, but in the end it’s the idea whose dissolution dooms Willy—and millions of Americans  like Willy every day. The question is: do we as a society soften the lives of those who will never find diamonds in the jungle? Or do we tack two more years onto their already hard existence in the name of a meretricious austerity that benefits no one but the very wealthy? It’s an important question that defines us as a society. Attention must be paid.

~ Jack Johnson

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There is no fiscal cliff and Erskine Bowles helped to create it.

There is no fiscal cliff and Erskine Bowles helped to create it.

Yes, the title is a wee paradoxical, but so is the logic behind the so called ‘fiscal cliff.’ A little history: the term ‘fiscal cliff’ was first used this year by Fed Chairman Ben Bernanke when he warned of a “massive fiscal cliff of large spending cuts and tax increases” that would hit us on January 1, 2013 due to a deal cut by Republicans and Democrats to raise the debt limit last year. But, as Paul Krugman has suggested, contrary to the way it’s often portrayed, the looming prospect of spending cuts and tax increases isn’t really a fiscal crisis. It is, instead, a political crisis brought on by the Republican’s attempt to take the economy hostage.

Last year the Republicans essentially extorted congress to agree to the ‘fiscal cliff’ by holding the (usually automatic) rise of the debt ceiling hostage. Erskine Bowles, Alan Simpson (who headed up the National Commission on Fiscal Responsibility and Reform a.k.a. The Cat Food Commission because its recommendations would lead to our seniors eating cat food) and other ‘deficit scolds’ enabled them by beating the drums for ‘deficit reduction’ at a time when deficit reduction was the last thing our economy needed. Central to their ideas was a conservative framework for limited government. They proposed three dollars in spending cuts for every dollar increase in taxes, instead of splitting savings equally between the two. Simpson and Bowles also appeared on MSNBC’s Morning Joe to discuss their proposals and at one point, Simpson explained his view that balancing the budget would require going “to where the meat is. And the meat is health care, Medicare, Medicaid, Social Security.” They were both in favor of cuts, either explicitly, using privatization or implicitly, by raising the age limit to enter Social Security to 69. They also favored lower tax rates across the board as a ‘guiding principle’… They didn’t get their way, but Republicans were able to use the deficit reduction fervor they helped to generate as cover to negotiate their draconian ‘fiscal cliff.’

So now, on January 1, about $400 billion in tax increases and $200 billion in spending cuts will take effect. That’s $600 billion, or 4 percent of GDP, and that—everyone agrees– would be a drag on the economy.

Like most economists, Bernanke thinks that serious budget reduction in the middle of a recession / depression is a bad idea. In fact, turns out MOST rational people on Earth think budget reduction in the middle of a recession is a bad idea, too. Except folks who have another dog in the hunt, folks who aren’t so much interested in deficit reduction as they are in so called ‘entitlement reform’ (that would ultimately translate into the privatization of Social Security) and corporate tax relief; folks like Erskine Bowles.

Here’s something we need to understand –there is a Wall Street Wing of the Democratic party, and one of its most eager representatives is Erskine Bowles. According to Bill Black, noted economist and blogger at Naked Capitalism, Bowles along with Alan Simpson is allied with Republican Wall Street billionaire Pete Peterson who has pledged a billion dollars in the effort to privatize Social Security called “The Third Way”.

Black writes, “The Third Way represents the Wall Street wing of the Democratic Party and has pushed successfully for the worst domestic failures of the Obama administration, including continuing the Bush administration policy of granting the elite banksters whose frauds drove the crisis de facto immunity from criminal prosecution. … Third Way is also useful to Wall Street’s pursuit of other major priorities, including austerity and gaining access to tens of billions of dollars in freebie profits from beginning to privatize social security. Third Way’s specialty is spreading the faux “moral panic” that the safety net is the great threat to America.”

But here’s the thing. The safety net is no threat to America. The great threat to America is gutting our safety net, or, to put it more simply, the Third Way itself.
In fact, according to Jon Chait, the hazards of the fiscal cliff are greatly over rated in the short term. Going over the fiscal cliff and then doing nothing for another year would mean a huge tax hike and spending cut. But waiting until January would mean extremely gradual tax increases and spending cuts, ones that would not even begin to take place immediately, because Obama has the ability to delay their implementation. And even after they’re implemented, the effect would be gradual, and could subsequently be canceled out. “It’s like saying if you go three weeks without food you’ll die so if dinner isn’t on the table at 6 o’clock sharp terrible consequences will follow.”

So here’s how this could play out. On January 1, the Bush tax cuts disappear and everyone’s taxes automatically revert to the higher Clinton-era rates. At that point, the conversation changes: Suddenly we’ll be talking about cutting taxes on the middle class and maintaining them where they are now on the rich. And Obama can basically go on TV every single day and say that he’s ready to sign a middle-class tax cut any time, but Republicans are refusing to agree unless their rich pals also get a tax cut. Exit polls show that the public—both Democrats and Republicans– DO NOT want to give the rich a tax cut, and they are going to be angry that the GOP is holding their tax cut hostage unless Donald Trump gets a tax cut too.

So there’s no real reason to fear the fiscal cliff, at least not in the short term, unless, of course, you listen to the loud drum beating by folks like Erskine Bowles who recently wrote a hand wringing op-ed in the Washington Post deeply concerned about jumping off the cliff.

“Going over the fiscal cliff would mean allowing a massive and immediate cut to nearly every major government agency and activity, including those vital to our national security or economic growth. It would mean a large and immediate tax increase on nearly all Americans, not just the highest earners. It would mean a double-dip recession at a time when the economy is still very weak and many Americans are struggling to find work.”

Some of this simply isn’t true—the cuts would not be immediate. They would be gradual. The tax increase wouldn’t be paid until taxes were due and much could change—in fact would change— if the political calculus is handled correctly. The double-dip recession isn’t likely to occur, again, unless the Republicans remain intransigent on tax cuts for the middle class—which would be political suicide. But even if Bowls hyped paranoia was the case, why not simply punt on the fiscal cliff and continuing to add to the debt? Who exactly says the debt is such a great problem that it has to be dealt with NOW in the middle of a recession? Not Ben Bernanke. Not Paul Krugman. Not Joe Stiglitz. Not Bill Black. Not the vast majority of respected economists out there. Not anyone I know of reasonable intelligence. In fact, it’s only Erskine Bowls and his Wall Street buddies that think this is so important it has to be tackled right now.

Says Bowls: “simply punting on the fiscal cliff and continuing to add to the debt would be an even bigger mistake. It would show markets we cannot put our financial house in order.”

Did you catch that? The ‘markets’ –that is Wall Street brokers– might get nervous. I’m wondering at this point, how many friends in the broader community these Wall Street brokers currently have. One suspects Bowles has an interest in shading the truth. He was an investment banker before he entered politics, and he currently serves on the board of directors for both Morgan Stanley and GE. He was chief of staff under Clinton from January 1997 to October 1998, during which time he tried to broker a deal on Social Security with Newt Gingrich and would have succeeded if it weren’t for the Lewinsky affair. Opening up a grand bargain on what he refers to incorrectly as ‘entitlements’ is one of the fevered dreams of Wall Street denizens—and Erskine Bowles, both for profit and personal legacy. So Erskine may not be exactly impartial on this matter.

Luckily, we also have such noted impartial parties as the Wall Street Journal itself wailing about the dangers of the ‘fiscal cliff’ and opining that the President should take John Boehner’s generous offer “ to maintain the Bush tax rates for at least another year, ease the sequester for defense in particular, and in return GOP House leaders will be open to giving the President new revenue.”

Got that? Accept Bush tax cut for another year on the promise of ‘being open to… new revenue’ from….somewhere…but where? Apparently, that’s to be figured out later.

Sounds like quite the bargain.

The Journal also offers some advice to Obama as to how he can prove his good faith — by appointing a well-respected figure to succeed Tim Geithner as Treasury Secretary. You’ll never guess who the Journal has in mind:
“On the other hand, the choice of someone like Erskine Bowles, who led Mr. Obama’s deficit commission in the first term, would signal a desire for serious negotiations. Especially after the fiasco of the “grand bargain” talks of 2011, Mr. Obama needs a point man whom Republicans think isn’t a political hit man.”
But, in his own way, Bowles is certainly an opportunist, if not a political hit man. He’s a close friend of Peter Peterson, and the entire Third Way movement see him as key. That’s exactly the person you don’t want in office, or anywhere near these negotiations.

One of the most important reasons why more Americans support the Democratic Party than the Republican Party is the conventional wisdom that the Democrats guard our social safety net. If Obama and the Democrats, led by the likes of Erskine Bowles or other so called ‘centrist’ offer a grand bargain in which paid benefits programs like Social Security are in play it will be more than a political disaster; it will amount to a betrayal of all those who have elected him. The only people who win in such a ‘grand bargain’ are the denizens of Wall Street and their Third Way lackeys.

~by Jack Johnson

‘Bi-Partisanship’ just another word for nothing left to lose…

Before the ink is even dry on the election newsprint that declared a major victory for Democrats this week, Thomas Friedman, the New York Times liberal poster boy is claiming that now—right now!—is the exact moment the country needs to embrace (wait for it) ‘bi-partisanship’! With the exception of a few annoying facts—like a Democratic sweep of nearly every close toss-up state—the column could be the same he’s used for the last 5 years. It’s rather like the Republicans ‘ideas’ surrounding tax cuts. If the economy is booming cut taxes, it will boom more! If it’s ailing, that’s okay, cut taxes, that will stimulate the economy! It doesn’t really matter what the illness is, the cure is always the same. I had a friend in college who claimed smoking weed held the same magical properties. He eventually dropped out. Thomas Friedman should follow his lead.

Compromise, in particular unilateral compromise (which seems to be a Democratic specialty) with the current crop of far right Republicans is a preposterously bad idea for at least two reasons.

1—Although it might sound pretty (and all the beltway folks clamor for it like heroin) it’s bad politics. Any compromise with folks to the right of Attila the Hun will not be favored by a majority of Americans. How do I know this? We just gave the Democrats another 4 years and expressly denied Republicans that option based on this question. Winning a national mandate doesn’t mean we want to compromise with a bad idea from Republicans we just rejected; that means we want good ideas from Democrats implemented. That’s what election are about. And as some Republican famously said, ‘elections have consequences’.

2—It enables bad behavior. The Republicans are right now in the position of an addict or alcoholic that has finally hit bottom. Ever since Rove famously taunted the ‘reality based’ community, Republicans weaned on the ephemera of Fox News have preserved a kind of alternate universe of facts and ideas. Just as an addict or alcoholic will skid through life until something breaks– the car, the kid, their head—Republican’s alternate universe was shattered on November 6th. There’s probably no better sign of the cognitive dissonance in play than Karl Rove, the Republican’s rain maker, arguing with a Fox News pundit over the reality of losing Ohio. He just didn’t get it. He might never get it, but I suspect quite a few of his colleagues (and donors) have. So Republicans can either kick the habit or go back to their delusional ways. ‘Bi-partisanship’ at this point enables them to continue with the illusion that their ‘ideas’ are actually workable solutions. They are not. Neither politically nor practically. The core Republican idea—maybe the only real domestic idea they have had in the last 12 years–tax cuts for the wealthy– has created a disaster for our budget, a windfall for billionaires, and havoc for the middle and lower classes. Compromising on tax cuts for the wealthy is like being an enabler. As Nancy Reagan so calmly cautioned us years ago, ‘Just say No’.

Finally, even if a ‘compromise’ of some degree is necessary to avoid the artificially created ‘fiscal cliff’, you don’t start negotiating by conceding the need for ‘bi-partisanship’…You start with a firm assertion of what the majority of Americans want: Increase taxes on the wealthy (popular with Mitt Romney voters as well exit polls have shown), preserve cuts for those making less, get out of Afghanistan, safe guard Social Security, create and fund an alternate energy infrastructure that will grow jobs in the US and lessen the impact of man-made climate change, etc. If Republicans have ideas that will make these plans possible, by all means listen to them. But Obama needs to be firm in the referendum that has been delivered by this country. It was quite clear going into the voting booth that there was a fundamental choice between two ideas of governance. Obama and the Democrats represented the idea of the commonwealth, that our government was to be used to further the public good. The Republicans represented a call for limited government and further privatization. They lost—and, more importantly — their core idea of a diminished government in the public sphere lost. Americans want a government that helps them in times of need and emergencies, that protects them in old age, that provides healthcare and retirement benefits. Now, it’s time the party we elected acts like it.

~by Jack Johnson