Friday, February 27, 2009

The Obama Budget: A Return to Equality

by Doug Drenkow

Stoked by the changes going on in DC, I just had to share with you, below, a few excerpts from today's most-e-mailed article in the New York Times online. And remember: This isn't about "class warfare" -- even though that is what you'll continue to hear from those on the Right who, as the article reports, for some 30 years have been effectively looting the national treasury and all the other wealth created by the hard-working, anything-but-rich people of this great nation.

No, this is simply about restoring fairness and wisdom to our economic policies. Why, even the rich will ultimately be enriched if the poor and middle class have more money, since it is the "anything but ordinary" Americans (as Obama so wonderfully put it) who buy most of the goods and services sold by the companies the rich are invested in. There's a word for that phenomenon: It's called "progress."

Our nation, plundered by greed, will be restored by hard work and common sense. And I don't know anything more American than that.

A Bold Plan Sweeps Away Reagan Ideas

By David Leonhardt

The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters. ...

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational
gains. ...

[T]he average post-tax income of the top 1 percent of households has jumped by roughly $1 million since 1979, adjusted for inflation, to $1.4 million. Pay for most families has risen only slightly faster than inflation.

Before becoming Mr. Obama’s top economic adviser, Lawrence H. Summers liked
to tell a hypothetical story to distill the trend. The increase in inequality, Mr. Summers would say, meant that each family in the bottom 80 percent of the income distribution was effectively sending a $10,000 check, every year, to the top 1 percent of earners. [emphasis mine]

Mr. Obama’s budget reflects that sensibility. Budget experts were still sorting through the details on Thursday, but it appeared that various tax cuts and credits aimed at the middle class and the poor would increase the take-home pay of the median household by roughly $800.

The tax increases on the top 1 percent, meanwhile, will most likely cost them $100,000 a year. ...

And if the economy remains weak into next year, as many forecasters expect, Congressional Republicans will try to pin the blame on the looming tax increases on the affluent.

It was Chris Matthews (or perhaps his likewise great MSNBC colleagues Keith Olbermann or Rachel Maddow) pointed out, can you even imagine a U.S. politician on the national scene, let alone in an address to a joint session of Congress, unabashedly calling for higher taxes on the wealthy even just a couple years ago?

It's horrific that it took a financial crisis that has us not just "on the brink" but actually going over -- The GDP shrunk by 6% last quarter! -- but finally it seems like some common sense has finally been pounded into the American psyche. 69% of the public thinks Obama's doing the right things on the economy; and after watching the Obama speech, over 80% think the economy will get better.

But like any wounded animal, the Right is now more dangerous than ever. And you and I know they are capable of anything to keep their power. However, what they don't seem to realize is that the people at large -- the everyday households whose consumption accounts for two-thirds of the GDP and whose votes put the hands on the levers of constitutional power -- are the real "powers that be" ... as long as we are properly informed and not misled.

And that is precisely why I am surely stoked by the events ongoing. We have an extraordinary leader in Mr. Obama -- Damn my slowness in finishing my Web site / portolio; I need to apply for a job with his administration! -- and in this economic crisis unlike any we've ever seen -- comparisons to the Great Depression may even be inadequate if things continue unabated -- eyes and minds are being opened, unlike I've ever witnessed before. As Obama says, we have great challenges but also a great opportunity to do a lot of good.

But just remember, it was 30 years of lower taxes on the rich -- and fewer regulations on their financial shenanigans -- that got us into this mess in the first place. The only thing that will get us out of it will be tax breaks targeted to and investments in the things that help the other 95% of the population. As the song says, This Land Is Your Land!

Media Conglomerates, Mergers, Concentration of Ownership, Global Issues, Updated: January 02, 2009




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Unknown said...

Doug, you've hit the nail on the head. The REAL axis of evil --the GOP/MIC/CIA/K-street --have literally ROBBED the people of the US blind since at least 1982, the year of Reagan's tax cut. Since that time --but for a brief respite in Clinton's second term --wealth has not trickled IT HAS FLOODED UPWARD EXPONENTIALLY.

Today --an increasingly tiny elite owns more than 90 percent of us COMBINED. This elite most certainly owns AS mush as 99 percent of the entire population.

Other nations throughout history have waged bloody revolution for much less.

If the right wing tries to play the 'CLASS WARFARE' card, I say: BRING IT ON! Thanks to their own stupid policies, we outnumber them!



tiago said...

However, what they don't seem to realize is that the people at large -- the everyday households whose consumption accounts for two-thirds of the GDP and whose votes put the hands on the levers of constitutional power -- are the real "powers that be" ... as long as we are properly informed and not misled.

Great caveat; ‘as long as we are properly informed and not misled.’ As long as Joe 6 pack gets his news off the TV or the ditto heads from Fox, they will be ill informed and misled. Even listening to some of our elected officials, we can be misled.
I would like to share with you this;
The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.

This was written in 1949 by Albert Einstein and is pertinent today as it was then.

Of course, the dumbing down of our society is a help to those elites in power to keep the underclass from understanding the issues.
You have to reverse what Bush said to make any sense of the legislation, as in ‘No Child Left Behind’. It actually means, every child of the underclass left behind.

Greg Bacon said...

We have an extraordinary leader in Mr. Obama

That remains to be seen. Obama is continuing the disatorous War on Terror policies enacted by the Bush-Cheney Junta.

Including putting those poor bastards stuck in GITMO thru even more pain and misery.

We're not going to be able to bomb our way to peace or victory in Afghanistan, but we'll sure keep trying.

We're going to keep up our incestous relationship with Israel, even to the point of sounding like Bush when it comes to Iranian war mongering.

We don't need another war in the ME, we need some common sense.

Obama also tried to block that warrentless wiretapping lawsuit from going forward, but so far, has failed.

A move to reinstate the Fairness doctrine was squashed by Obama.

As for the tax thing, part of the money he's going to save/collect will come from Medicare.
Cheating the elderly out of decent health care is not the way to save money.

None of these "tax the rich" plans will start until 2011??

If we are in a true mess and we definitely are, why wait so long to get his plan up and running?

2011 will be too late. The 2010 mid-term elections usually go to the party out of power, which means that the Republicans will be able to craft legislation to nullify Obama's plan, so why wait?

If it's that important to our recovery, don't wait till 2011 to let it go into effect.

And appointing some of the same swindlers responsible for the Wall Street bailout, like Tim Geithner, to posts doesn't bode well.

If he was truly a great leader, he'd use some of that political capital to help enact single payer health insurance and not a copy cat of Massachusetts plan put in place by the odious Milt Romney.
Instead, we'll continue to help the private insurance companies rake in the more than 375 billion a year in profits.

I wish Obama well, but it's too early to start making plans to carve Obama's visage on Mt. Rushmore.

Bluegrass Pundit said...

Taxing the rich at 100% won't pay for Obama's budget. The Wall Street Journal has reported that taxing the rich at 100% won't pay for Obama's budget. Barack Obama promised not to raise taxes on anyone making under $250,000 per year. Where is he going to get the money? The numbers indicate Obama will need to take 100% of the income of everyone making over $75,000.

Anonymous said...

We need to drastically slash military spending - that is where the waste and corruption is. We are building billion dollar aircraft carriers to fight who? al-Qaeda doesn't even own a rowboat.

The American people are being robbed blind by defense contractors and criminals within the Pentagon.

Anonymous said...

Len, I invite readers to look closely at Karl Denninger's latest expose on Obama's continued commitment to banking fraud to understand why we are heading to 1930s style depression, as Denninger puts it, "at Warp speed". It's damning. The unravelling is coming very fast. He also links to 20 financial graphs that are devastating. The term "Kool Ade" has been repeatedly thrust at those Cassandras pointing to economic doom but it is quite clear that the mainstream media and most economic commentators have been drinking the stuff by the gallon. Prepare for the economic deluge. It's coming -- fast. It's all very sad.

Anonymous said...

Isn't it wonderful to see the North and South at it again? Or, should I say Republican against Democrat, Conservative against Liberal. That's what we want. Don't worry about the big debt we are running up because we are not going to pay it anyway. Let them try to collect it we have all the nuclear punch to thwart any country that assumes they can make us pay them back. Hey! as for the lost Americans, the ones fighting against one another who will never join forces again as long as we have them fighting over who done what. Let them both keep funding out lofty goals. If we need more money we will just boost the taxes, tell them a few more lies, and boost the taxes. We will have it all. Oh! they will vote us out, Ha, Ha, there will be no more elections we just have to pass another law, stating that to save money, the President will be chosen by the Government. Violates the Constitution?
We are working on that right now. No more Constitution we are writing our own. We have already started to eliminate the one that was being used. First we started by electing a non U.S. citizen, now we have started to remove the First amendment of Free Speech. Just a matter of time. Who's gonna stop us? We have already alloted almost Five (5) Million Dollars to Acorn to start training a new police force. If anyone thinks they can organize to stop us we will just bust into their homes and take what we want. If we encounter resistance we will just kill everyone. The following task will be completed in four (4) years. Year one (1), Bankrupt Country, Year two (2), Clean out all personal investment of the sources of country workers, bank accounts, retirement funds, Ira's, Stocks, etc. Year three (1), Issue new Charter. Year four (4), Eliminate elections. Hey! we the Government will take care of you. If you need a new vehicle, just put in your request and if we think you deserve it (through obedience) eventually you will get it. Medical help (just stand in line over there) maybe we can get to you before the end of the day. No, more loafing everyone will work cause we have to keep you out of trouble. No more personal check, you get a debit card, whereas ever purchase is approved or disapproved. You got that! Plus a bunch of other interesting Changes you never would have expected in that Moronic System you used to live in. I Love it.

opit said...

What happens about those ridiculous 'bailouts' adding catastrophically to international balance of payments ? Or does it matter - since the outstanding amount was impossible to pay back years ago ?
Nope. You called it. There is no salvaging a Ponzi scheme when the perpetrators themselves have kicked out the foundation struts.
That may not mean everything is toast by months' end - but giving money away and guaranteeing that which made no sense on the bank balance sheet undercut the basis of the financial system.
New loans to unqualified borrowers just does the same to microfinance : and small business is where the greatest need for convertibility exists.
And since the U.S. buck is the international reserve currency...the pain should go a long way indeed.
This isn't the 30's. People are city dwellers without water, housing, a society geared for high energy consumption. Manufacturing facilities are gone to other countries.
Already one section of Detroit is billing ridiculous rates for water.That and sanitation are clusterfuck cubed.
This is going to be extremely messy fast.

San said...

I came over from Spartacus Jones's blog, after noticing the topic of this post. It's very smart. Thank you.

I will drag the article to my desktop. Several people I know will be interested.

Randall said...

Hey all,

They are trying to pass bills in congress that would effectively shut down the small community based food growers, co-ops, Vegetable stands,
etc. Sponsored by ADM, monsanto,
etc etc.
Please get this url to your contacts and sign and send the letter. There is less than a week left.

SadButTrue said...

Taxing the rich may or may not pay for Obama's programs, but it may still be the right thing to do on the basis of morals and ethics. Can a robbery on the most massive scale ever seen in history be justified on the basis that it was carried out by corporate entities with the collusion of governments? I think not.

What I would propose would be a 100% inheritance tax over some fixed amount, below which it would be zero. If you let each of your heirs have $1 Million, they could buy a pretty nice home and never have to pay a mortgage, with money left over for a quality education. That sounds pretty good to me, and it doesn't lead to idiots with more money than brains who are too big to fail. Paris Hilton and GWB both come to mind.

The founders didn't have any argument against wealth, but I don't think they were for the creation of dynasties either. The existence of a fairly large number of trust fund parasites who never have to work for a living - who never learn about consequences or accountability - is and has been shown to be a recipe for disaster.

Anonymous said...

Woo Hooo!

First of all, it was Dave Leonhardt that led the charge at the NYT, along with Friedman, to push the Democratically-controlled congress to pass the FIRST bailout. I followed it closely, and wrote him letters about it.

One day he is quoting bankers that are admitting they are embarrassed to think they will be getting rewarded for failing, the very next day touting the "Rescue" (remember, it was a RESCUE first, then came the "bailout" meme).

I trust him as far as I can toss Cheney.

And quoting that idiot rascal Larry Summers, a supply-sider's supply-sider who LED the de-regulation charge as now being someone that will "all of a sudden" perform a miracle of finances, is too much for me to take.

He should already have been hung, frankly.

Sorry, but when I heard Obama tout buying stocks NOW, and to think "Long-Term" (holding the stock), I heard another Wall Street's tool conning us, again. of course, well-paid and rewarded tool, no doubt. I mean, Wall Street lobbyists spent over THIRTY BILLION buying up D.C. the last 10-15 years.

The Japanese that bought stock that fell in price drastically in the early 90's? Finding "value" in the low prices?

Their stock market is still EIGHTY PERCENT lower than the peak in 1992.

Is Obama telling us to buy stock now because he is nuts, hates us, thinks us mindless gerbils or just reliably owned by Bankers?

Everyday, I trust him less and less.


AdamS said...

Anonymous said:

"Don't worry about the big debt we are running up because we are not going to pay it anyway. Let them try to collect it we have all the nuclear punch to thwart any country that assumes they can make us pay them back."

You owe your own central bank more than you owe any other country, since they lend out currency they've created with interest added. This is a large part of the 'national debt'.