Showing posts with label income inequality. Show all posts
Showing posts with label income inequality. Show all posts

Sunday, March 09, 2014

Why GOP Administrations Do Not Create Jobs

by Len Hart, the Existentialist Cowboy

What tycoons of old understood was that if wage earners earn more, they spend more. Jobs are created. Even more spending follows the additional jobs. That's the left/dem/progressive model. But the GOP method is just the opposite and so --too --the miserable results.

The effects of the GOP model are confirmed with official stats from the Bureau of Labor Statistics and the U.S. Commerce Dept and various other studies.

A GOP tax cut --from which only elites benefit --is invariably followed by a recession/depression, increased joblessness, higher prices and the export of jobs, most often, to China. [See: CIA'S World Fact Book, online] For example, Reagan's "infamous" tax cut was followed quickly by a depression of some two years (or longer). It was the LONGEST, DEEPEST depression since H. Hoover's GREAT DEPRESSION.

The Axis of Reagan/GOP are wrong. Wealth does not and has never trickled down. "Suppy Side Economics" was and remains a scam, a con job sketched out, it is said, on a napkin by Arthur Laffer. Laffer is remembered for his "Laffer curve" illustrating the theory that reducing taxes for the very wealthy would result in increased production. That has never happened. It's either a lie, a fraud, a fairy tale or all of the above. The Axis of Reagan/GOP are wrong. "Suppy Side Economics" was and remains a scam, a con job sketched out, it is said, on a napkin by Arthur Laffer. Laffer's curve, it was said, would result in increased production. That has never happened. It's either a lie, a fraud, a fairy tale or all of the above.

GOP tax cut for its elite base was quicklly followed by a recession of some two years. It was the deepest, longest depression since H. Hoover's big one! Not addressed with Laffers curve is the fact that elites have the purchasing power to bid prices UP! They also have offshore bank accounts. The results are not inflation! At least since Ronald Reagan occupied the White House, the GOP has tried to peddle tax cuts that have benefited only the elite classes with various forms of trickle down theory. No GOP plan has ever worked!



Thursday, December 27, 2012

How Keynes Got it Right and the 'Right' Got it Wrong!

by Len Hart, the Existentialist Cowboy

Many have proposed a 'flat' tax. It sounds good but isn't! Flat taxes are not really 'flat'. Ten percent of the income of a poor or middle person is a much, much greater burden than is the same percentage against the income of a millionaire. The difference is that merely keeping a roof over the family's head and food on the table is a MUCH bigger percentage of income/wealth for a poor or middle class family.

The very, very wealthy, in fact, find it difficult to spend all their wealth. What is left over after the cost of maintaining a villa in Spain or a swanky lodge in the Alps is invested in enterprises that earn even more wealth. Moreover, even Libertarians --if pressed --may admit that 10%, 20%, 30% percent, indeed, any percentage of a poor person's income is a much greater burden than almost any rate on the income of a millionaire! Among the many reasons this is so is that mere necessities --food, water and to varying degrees, shelter --are not only fixed, they will always amount to a much higher PERCENTAGE of a poor or middle class budget than that of the budget of a multi-millionaire or richer.

Libertarians, however, will maintain that income tax is immoral because tax policy may have the effect of re-distributing wealth and income. My reply is that when just one percent of a nation's population owns more than the rest of the population combined, it is time to raise taxes on the very rich.
The whole system is pure criminal as from the installation of the Federal Reserve Act in 1913 by Democrat Woodrow Wilson. Not only the American people suffers, the whole world has been sandwiched by the private banks behind the central banking system.

--G. Edward Griffin, Legalized Plunder of the American People
The best argument against a flat tax, ironically, has come from a so-called 'libertarian' who wrote:
That 10 percent is a greater burden on the poor than is 10 percent on the very rich is the very reason that income tax is immoral --as it is currently imposed upon us.
Alas! The Libertarian does not go far enough. A flat tax of any sort will penalize the poor while enriching the rich.

During the 'Great Depression', the American comedian Bob Hope was asked to comment on it. He quipped (and I paraphrase)
"..I looked up the word depression. A 'depression' is a hole. I looked up 'hole'. A hole is 'nothing'. So --if you think I am going to waste my time talking about nothing, you have another think coming!"
There is nothing mysterious about depressions. They are defined by 'negative GDP growth' from which follows negative job creation rates --not to be confused with mere slowdowns or periods of slow growth. Thus depressions are disastrous for the poor. The very, very rich can actually benefit from them by buying bargains that are beyond the reach of the poorer or middle classes. The 'ruling elites' are capable of rigging markets with cleverly timed 'sell-offs'. They have the luxury of buying back in at bargain prices.

A 'depression' is a period of 'contraction'. In the U.S. every recession/depression at least since World War II has occurred during a Republican administration. That is but one reason I am not now nor have I ever been a Republican.

If FDR had been either a Republican or what is commonly called a 'libertarian' (in the Ron Paul sense of the word) the U.S. would have eventually collapsed. Even so, it may have required the U.S. entry into WWII following the Japanese attack on Pearl Harbor to get the U.S. into the war. As a stimulus, 'war' created millions of new jobs and put women to work where --earlier --their presence had been unknown. The image of 'Rosie the Riveter' is still symbolic of the period. The good effect is that women would never again consent willingly to 'second class' citizen status.

As for Keynes, he would not have been surprised by the American experience. He was, after all, famous for his proposal that in times of increased joblessness, the government may do well to bury 'pound notes' in a landfill and let 'private enterprise' dig them up.

If it's all about jobs, why wait for a war to create jobs? A 'liberal' administration has a responsibility to society overall --not just to the 'ruling elites' who finance his campaigns. Rather, a liberal and/or progressive regime will support a more egalitarian society, in fact, a more efficient society as a result.

Saturday, October 30, 2010

Don't believe the pundits: It's not over 'til it's over!

by Guest Columnist, Doug Drenkow

News flash! Despite what a lot of the pundits might lead you to believe, the election of 2010 has not yet been decided. Until Tuesday morning, it has not yet even begun! (Except, of course, for mail-in ballots, which -- again despite what some pundits had led us to expect -- are running decidedly in favor of Democrats)

Do we want less regulation of the very companies that crashed our economy?

Do we want greater inequality of wealth in our country?

Do we want to increase our national debt by lowering taxes on the rich?

Or do we want to invest in infrastructure and green energy and other pressing needs in the short run, to increase demand and bring down unemployment -- by the way, the only way to pay off our debts -- in the long run?

Are we going to be bullied by the history-twisting, race-baiting, immigrant-fearing, health reform-hating, climate science-denying, fascism-flirting phenomenon of the Tea Party?

Are we going to give in to the Right-wing political, media, and corporate powers that foment and finance the Tea Party, the very same powers that the Tea Party dupes publicly rail against?

In short, are we going to give our country back to the very same party that drove us into the ditch we're now trying our damnedest to get out of?

Or are we going to say No! to The Party of No, and vote -- and get out the vote -- for Democrats?!

And while we're at it, let's keep up the growing pressure to reform the filibuster rules -- possible only on the first day of the new Congress -- that have killed off more good legislation in the Senate and given the GOP more power than anything else.

Well, as I wish progressive candidates and their supporters across the nation all the best, here are some excellent candidates and strong positions on propositions for our election in California, along with some very good reasons for voting and for getting out the vote:

C A N D I D A T E S

GOVERNOR: JERRY BROWN. He has devoted his life to public service, and done so effectively and with honor. Jerry Brown has consistently worked for fiscal responsibility, environmental protection, diversity, workers rights, new technology, and infrastructure development -- keys to growing new jobs in California -- while being tough on crime, including the "white collar" variety. Even those who have on occasion disagreed with him know that Jerry tells you exactly what he believes; and he's usually been ahead of the curve, out in the lead -- as with his big emphasis on education years before it became fashionable to recognize it as the key to our economic competitiveness in the 21st century. Compare that to his opponent, who has flip-flopped (to say the least) on everything from immigration to abortion. And do we really want to make governor of our great state someone who not only has no experience in government but who also got into big trouble making big backroom deals with Wall Street?

SENATOR: BARBARA BOXER. Sen. Boxer has always stood up for Californians and what's best about California. She has proudly supported economic stimulus money and other legislation protecting and creating clean energy and millions of other U.S. jobs, after-school and education programs for kids, health care reform for all, environmental protections, women's rights, programs for veterans and seniors, and -- overall, as I see it -- standing up for "the little guy and gal" up against formidable powers-that-be. By contrast, her opponent, again someone with no experience in government, paid herself handsomely while shipping American jobs overseas. Are those really the values we want representing California in the U.S. Senate?

LT. GOVERNOR: GAVIN NEWSOM. Yes, he's been an outspoken proponent of civil rights for gay people, and all people. So how is that a bad thing? As mayor of San Francisco, Newsom championed biotech and other new technology jobs, nearly universal health care, solutions for homelessness, and urban renewal. He's a natural leader and will make a great Lt. Governor.

ATTORNEY GENERAL: KAMALA HARRIS. As the first African American woman and South Asian American woman in California to be elected as a district attorney, Kamala Harris has been extremely effective as D.A. in San Francisco, cracking down on crime -- particularly violent crime, as against children -- and working to improve the quality of life, as by increasing prosecutions for vandalism, graffiti, and auto burglary. Harris has brought free legal clinics to immigrant neighborhoods, expanded services for crime victims and their families, and developed programs to prevent re-offending. Like her predecessor, our current Attorney General and candidate for Governor, Kamala Harris will be tough on crime and good for California.

TREASURER: BILL LOCKYER. As State Treasurer, Lockyer has held the unenviable position of having to confront the national recession, the greatest economic challenge of our lifetime. But his smart, hard work with the state's finances has created and maintained more than 100,000 good-paying construction and related jobs and saved thousands of projects for highways, schools, parks, natural resources, and affordable housing. As other investment funds lost trillions when the financial system crashed, Lockyer's prudent investments protected the state's $80 billion investment fund, which actually earned dividends and never lost a penny! He led the national fight against the Wall Street rating agencies that contributed to the crash; and even as credit has dried up nationwide, California has been able to sell bonds at historic low interest rates. Having proved himself "under fire," Bill Lockyer definitely deserves to be re-elected Treasurer of California.

CONTROLLER: JOHN CHIANG. Not only has he already proven himself well qualified for the job, as the state's "independent fiscal watchdog" -- weeding out waste, fraud, and abuse and making the state's finances more transparent and accountable to the public -- John Chiang has courageously stood up to both the governor and the legislature in the state's budget crisis -- denying them accounting tricks and holding their feet to the fire. What's more, John has shown himself to me, personally, to be intelligent and sincerely concerned with the issues affecting everyday Californians. He, too, deserves re-election!

INSURANCE COMMISSIONER: DAVE JONES. As Assemblymember from Sacramento, Dave Jones has earned a reputation standing up for consumer rights, children and families, affordable housing, early childhood and other education, environmental protection, healthcare, privacy rights, civil rights, equal access to the courts, and economic development. In short, Dave Jones has what it takes to make a great Insurance Commissioner, looking out for us.

SUPERINTENDENT OF PUBLIC INSTRUCTION: TOM TORLAKSON. A science teacher -- a second-generation teacher -- and high school coach, Assemblymember Tom Torlakson has fought for school funding, textbooks, computers, campus safety, student health and fitness, after-school programs, student nutrition, and physical education, and against hazing, crimes against children, junk foods on campus, and our alarming dropout rates. As State Superintendent of Public Instruction, Tom Torlakson wants to work for safe schools, career and technical education, college prep, arts and music programs, and excellence in school management. A vote for Torlakson is a vote for our kids.

SECRETARY OF STATE: DEBORAH BOWEN. As Secretary of State, Bowen has earned a national reputation for exposing flaws and ensuring security in our electronic voting systems. She has also streamlined her agency and cut its budget, increased the public's access to agency information online, improved voter education, and held private contractors more accountable. Sec. of State Bowen has earned our votes for re-election.

P R O P O S I T I O N S

PROP. 19: MARIJUANA LEGALIZATION. YES. Regulate and tax the sale of this already widely available substance, like we do alcohol; the existing prohibition, like that we had against alcohol, costs society dearly -- in terms of policing, incarceration, enriching and empowering gangs and drug cartels, and making criminals out of otherwise law-abiding citizens. Supported by L.A. Co. Dem. Party.

PROP. 20: CONGRESSIONAL REDISTRICTING. NO. Empowers the 14-member state redistricting commission -- appointed by three state auditors, in a very untransparent and unaccountable procedure -- created by Prop. 11 (2008) and prevents redistricting by the Legislature -- accountable to us voters -- and does not guarantee the right of voters to reject boundary maps by referendum. If both this and Prop. 27 (below) pass, then the one with the most votes prevails. Opposed by CA and L.A. Co. Dem. parties and the CA Sierra Club.

PROP. 21: SURCHARGE FOR PARKS AND WILDLIFE. YES. Pay an extra $18 a year on your vehicle licensing to not only preserve and protect our wonderful state parks (in need of a lot of maintenance) and irreplaceable wildlife, but also to get for yourself a free day-use admission to all the state parks. Supported by CA and L.A. Co. Dem. parties and the CA Sierra Club.

PROP. 22: PROHIBITION ON STATE'S BORROWING OR TAKING FUNDS FOR TRANSPORTATION, REDEVELOPMENT, OR LOCAL GOVERNMENT PROJECTS. NO. A close call -- a power struggle between state and local governments -- but the facts that it will further hamstring the state budgeting process -- already nearly impossible -- and open the door for "sweetheart" deals with local developers argue against this proposition. Opposed by CA and L.A. Co. Dem. parties.

PROP. 23: SUSPENDS "GREENHOUSE GAS" AIR POLLUTION CONTROL LAW. NO. Don't let the Texas oil companies behind this initiative tear down our state's leading environmental law and destroy clean energy jobs! Opposed by CA and L.A. Co. Dem. parties and the CA Sierra Club.

PROP. 24: REPEALS CORPORATE TAX BREAKS. YES. Close a big tax loophole that recently passed but benefits almost entirely a few huge corporations, not small businesses, and restore funding to schools and other vital public services. Supported by CA and L.A. Co. Dem. parties.

PROP. 25: SIMPLE MAJORITY VOTE FOR BUDGET. YES. Make state budgeting fairer and more effective. Restore majority-rule -- and get rid of minority-rule, by The Party of No -- by dropping the requirement for a 2/3 supermajority and requiring only a simple majority (51% or greater) to pass a state budget (although there still will be a 2/3 supermajority required to raise taxes). What's more, if legislators fail to agree on a budget by the deadline, they forfeit their state pay! See also Prop. 26 (just below). Supported by CA and L.A. Co. Dem. parties and the CA Sierra Club.

PROP. 26. SUPERMAJORITY VOTE FOR FEES AND CHARGES: NO. Changes the vote to approve certain fees and charges -- as on big oil and tobacco, to clean up their pollution and other health hazards -- from a simple majority (51% or greater) to a 2/3 supermajority; in other words, allows minority-rule, by the Party of No. See also Prop. 25 (just above). Opposed by CA and L.A. Co. Dem. parties and the CA Sierra Club.

PROP. 27. ELIMINATES REDISTRICTING COMMISSION. YES. Eliminates the 14-member state redistricting commission -- appointed by three state auditors, in a very untransparent and unaccountable procedure -- created by Proposition 11 (2008) and returns redistricting to the Legislature -- accountable to us voters -- and guarantees by constitutional amendment the right of voters to reject boundary maps by referendum. If both this and Prop. 20 (above) pass, then the one with the most votes prevails. Supported by CA and L.A. Co. Dem. parties.

Voting is power to the people! Use it or lose it. Vote and get out the vote!

Sunday, July 11, 2010

Let Them Eat the "Higher Pie"

by Len Hart, The Existentialist Cowboy, Doug Drenkow, Communications Specialist

The U.S. right wing consistently mistakes bigger slices of a smaller pie for growth! In fact, wealth is the product of labor. Therefore, real growth creates larger pies, larger slices. Real growth is, by definition, egalitarian or not at all! America's ruling elite amounts to just one percent of the total population and they own more than the rest of us combined.

Economists call a 'shrinking pie' a 'contraction' but, since Ronald Reagan, the rich have enjoyed the growth of their 'slices' as the pie itself shank. With every GOP tax cut since 1900, the economy has contracted but the 'slices' owned by the elite increased. The rich decrease as a class but grow wealthier with bigger slices. If you can visualize this, you will have mastered right-wing, trickle UP economics.

The effect for everyone but the very, very rich is called 'depression' i.e, 'contraction'. This process can be modeled mathematically. Anyone not a member of the top one percent voting GOP votes against his/her own interests. Anyone voting GOP expecting to join them one day is insane. There is no 'higher pie' --only a shrinking one.

When I am charitable, I suspect that their perspective is myopic in the extreme. More realistically, I suspect that they just don't care! Or worse --the transfer of wealth upward to just one percent of the total population was deliberate and achieved with a carefully crafted program of GOP tax cuts beginning with Ronald Reagan's tax cut of 1982. Only the very richest people in America benefited. Everyone else got poorer in terms of dollars earned but also as a result of declining purchasing power as prices are bid upward by the wealthy.

Since 1900 the U.S. has 'experimented' with 'robber baron economics', 'supply-side economics', 'trickle down theory' and assorted 'stimuli' that also put the fat cats and so-called 'investor' class at the top of the pecking order with often tragic results --the Panic of the late 1800s, Hoover's Great Depression, Ike's 'Recession', Reagan's 'Tent City' Depression of over 2 years! Anyone not seeing the pattern is just not paying attention.

My thoughts along these lines are inspired by the following article by my good friend, Communications expert, Doug Drenkow.
Presently, there is a great debate in the United States and beyond: In this, the greatest recession since the Great Depression, should the government spend more money on putting more people to work -- or saving more jobs, as by the federal government helping our increasingly desperate state governments -- or helping unemployed workers pay their bills till the job market turns around? Or should the government of this and many other nations focus more on paying down our historic debts, by cutting spending and/or increasing taxes, to stabilize our economies and thus, presumably, turn them around?

Do we so soon forget where most of that debt came from, where most of our money went? In the United States, much has been spent bailing out institutions "too large to fail" as well as propping up the rest of our economy, although apparently not enough -- thanks in large part to fiscal "conservatives," in both parties, who slashed last year's stimulus bill in half.

But even more than that, our treasury has amassed massive debts due to tax cuts that went mostly to the wealthy, under the administration of the previous president, and that were unfunded, as were the wars that were then started, with or without just cause, and that rage on, although now with ends apparently in sight.

In short, as many "deficit hawks" propose, should the Social Security, education, public safety, and other programs benefiting the working people and middle class of America be dramatically cut? Should the wealth of the country -- the product of the work of the workers of the country -- be in (unstated) effect permanently shifted from the bottom to the top, exacerbating the already historic inequality of wealth?

Although such authorities as Nobel Prize-winning economist Paul Krugman do a better job of explaining the whys and wherefores, the bottom line is this: If the working families in America and beyond do not prosper, how can the nations we build and maintain and defend and support do anything but wither?

Never forget, America is ultimately no greater than the sum total of the hopes, dreams, aspirations, and everyday lives of all our "everyday" people.

From the Declaration of Independence ...
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."
... and the Constitution ...
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
... to the Four Freedoms, espoused by President Franklin D. Roosevelt ...
"In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms.
"The first is freedom of speech and expression -- everywhere in the world.

"The second is freedom of every person to worship God in his own way -- everywhere in the world.

"The third is freedom from want ... everywhere in the world.

"The fourth is freedom from fear ... anywhere in the world.

"That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our own time and generation."
... and the challenge issued by President Barack Obama ...
"I'm asking you to believe. Not just in my ability to bring about real change in Washington ... I'm asking you to believe in yours."
So as we celebrate America today, let us protect, nurture, and cherish all the extraordinary "ordinary" people who are Americans. And let that be the guiding principle in our negotiations over budget, unemployment, and all the other public business of America. If U.S. working families work and prosper, then so will America. If not, then God have mercy on us all.

Douglas Drenkow
Clearly, the U.S. remains powerless to address these issues as long as the government is literally owned by the dwindling few who benefit. It is simplistic and naive to expect a government beholden to the super-rich to work -in good faith --for those who are denied both a voice and a meaningful role in this 'government of the people." It is simplistic and naive to expect a robber baron class to simply bow to the will of what it must surely believe is but a great mob of unwashed masses to whom is left an absurd choice by elites and/or idiots: 'higher pies' or 'let them eat cake! It is folly to assist the theft of U.S. wealth by this robber baron class. It is America's death knell that so few care and that so many multitudes will suffer!

Thursday, April 08, 2010

How the Right Wing Destroyed America

by Len Hart, The Existentialist Cowboy

The U.S. Supreme Court has decreed: corporations are now people. They have been given rights that only real people had before. Worse --corporations remain 'privileged' in ways that real people could only dream about! Corporations enjoy 'limited liability', a privilege which, in fact, defines them. Corporations are above the law.

Real people meanwhile may be prosecuted for murders and, if found guilty, sentenced and possibly executed. A mere legal abstraction need never fear the hand of justice. They have been made 'people' but very, very privileged people to whom the criminal laws may never be applied. Examples are Exxon with respect to the Exxon Valdez disaster and Dow Chemical, Union Carbide et al with respect to mass deaths at Bhopal.

Real people, meanwhile, have been robbed of any real power by which they may influence the direction of government. The power resides primarily among the corporations and an increasingly tiny elite which control them from the board room. This is symptomatic of dictatorial plutocracies that result when the rich are enriched! We witnessed recently the most absurd SCOTUS decision in U.S. history in which it is decreed that these mere legal abstractions --corporations --are real people to which all the Bill of Rights apply, to which the protections of Due Process of Law apply! This unconscionable outcome is the reductio ad absurdum of right wing thinking in general and fascist policies specifically. Unless this decision is reversed or may irrelevant by law immediately and a Constitutional Amendment in the longer term, you can kiss the last vestiges of American Democracy goodbye.

Today --just one percent of the U.S. population owns more than some 95 percent of the rest of us combined and the trend is toward even greater concentration of wealth into yet fewer hands. The trend began in earnest with the Reagan years --heady boom times for the idle rich, offshore banks and the Military-Industrial complex. But in real America, the growth industries were poverty and crime.

Even in the second half of the 19th Century, when big 'combines' were industrializing the world, it was not believed that these mere agreements on paper were 'people'. Even so, organized labor was in a fight for its life, a fight that it did not lose decisively until Ronald Reagan busted up a strike of air traffic controllers in the 1980s. Concurrently, the conduct of American politics morphed. Politics, over the years, ceased to address the needs of 'people'. Politics became the process by which 'money' bought influence in DC and the various state houses throughout the nation.
We'll never raise as much money as Bush is going to raise and his corporate lobbyists, I can promise you, because he has paid them back in spades.

--James Carville
Carville refers to the very purchase of the government, a purchase analogous to the sale of Rome by the Praetorian Guard which literally auctioned and sold the Empire to nobleman Didius Julianus. The sale was transacted in Greek Drachmas --not worthless Roman sesterces.

Rome was then as the U.S. is now a plutocracy.
KEVIN PHILLIPS: I think we have one now and we didn't, 12 years ago when I wrote THE POLITICS OF RICH AND POOR is when money has ceased just entertaining itself with leveraged buyouts and all the stuff they did in the '80s, and really takes over politics, and takes it over on both sides when money not only talks, money screams. When you start developing philosophies in which giving a check is a First Amendment right. That's incredible. But what you've got is that this is what money has done. It's produced the fusion of money and government. And that is plutocracy. ... a plutocracy in a way that we haven't had before, since the gilded age.

BILL MOYERS But the signers of the Declaration were representatives of America's first and wealthiest families.

KEVIN PHILLIPS: Well, they were, but, you know, a funny thing about that, because they were simultaneously people who were furious with the British. Furious with the British for taxing them, for not letting them make their pig iron into hammer and spades, for not paying the right amount of money for tobacco.

And if you read what they had to say, it sounds like the American version 100 years earlier of what the people out in the plains said about the bankers in New York and the railroad owners in Minneapolis. So they were fighters in a way. And Thomas Jefferson pretty much stuck with that. You had a divergence within the founding fathers of those who became, in the American context, pretty conservative, and those who like Jefferson maintained their anger they had against the British economic elites in the United States.

BILL MOYERS: But where is that anger today? Because the ... the two men who spoke most consistently with what you're saying in WEALTH AND DEMOCRACY in 2000, John McCain and Willi... Bill Bradley, Senator Bradley, both got defeated in their primaries. And they were the ones who were registering the discontent of which you are ... are writing about. What happened? The peop... that the majority of people don't share your convictions and mine?

KEVIN PHILLIPS: Well, I'm not certain whether they do or they don't. But the ... the key thing in the year 2000 was that if you look at all the psychological profiles of the United States, of the electorate during that period, even though the Nasdaq had started to crash they still thought things were pretty good. The real dive didn't come until after the election when you had the miserable elections stalemate and the sagging economy.

So that basically, you never get one of these reactions against big money until you've had this speculative implosion. And normally I think if we were seeing any kind of debate in Washington, and the Democrats have all kinds of things they could say about the Bush dynasty and Enron, for example, it's mind blowing, but they don't.

BILL MOYERS: Why?

KEVIN PHILLIPS: I think partly because they're so interested in raising money that they can't see their soul in the mirror.

BILL MOYERS: What has happened to the word equality? When you and I were young men in politics it was a common reference in our political discourse. Lyndon Johnson, Richard Nixon, a lot of others too, but you don't hear it in the political lexicon anymore.

KEVIN PHILLIPS: You hear it in twisted ways. There is a view in some conservative circles that it doesn't matter much what concentrations of wealth you have or disparities of income. It's equality of consumption. It's the right to have Nike shoes, to listen to a boom box, to take a plane ride. And ...

BILL MOYERS: Nothing wrong with that.

KEVIN PHILLIPS: Well, no, but on the other hand, that didn't solve problems in a depression when you had the right to watch a plane fly over Kansas. Or turn on the radio. So you've got these different ledgers that are kept. And people that try to say "consumption is the yardstick" usually have it in mind that democracy is not ... that income differentials are not, they stand for a different philosophy.

BILL MOYERS: Didn't the word "equality" disappear because the people who believe in inequality won the elections?

KEVIN PHILLIPS: Well, there's a certain truth to that. And going back to the time when we were both in politics on different sides of the aisle, the ... one of the great weaknesses, in my opinion, in liberal politics, was to start talking about social equality in a way that had never really occurred in the United States. People came to this country as immigrants and they ... they suffered all kinds of hardships and "no Irish need apply" and everything you could name. Nobody ever tried to draw blueprints for bussing the Irish around Boston ...

BILL MOYERS: Mm-hm.

KEVIN PHILLIPS: ... or things like that. And there was a sense that equality in the social sense could be obtained through government, that became powerful in the '60s. And in my opinion, that was the beginning of the tending of the idea of equality in the sense of ... of economics. Now, conservatives will still say all that matters is equality of opportunity.

BILL MOYERS: The market will produce the equality.

KEVIN PHILLIPS: Yes, exactly.

BILL MOYERS: You ... you know that I was quite taken with your book "The Politics of Rich and Poor," what, a decade ago?

KEVIN PHILLIPS: 1990.

BILL MOYERS: 1990. In it you told of how the wealthy had made great gains in their power. They had ... are you writing the same thing now? Has it changed quantitatively and qualitatively?

KEVIN PHILLIPS: I think there are two stages, the 18- ... the 1980s were the first stage in the sense that Ronald Reagan wanted people to have a chance to get rich. He liked entrepreneurs, he liked people who owned 14 department stores or two movie studios. It wasn't for the big old steel companies or anything, but he liked money. And he and Don Regan, the Treasury secretary, created a political culture in which fashion became in, making money became in, paper entrepreneurialism was the key, all the leveraged buyouts. And that was a whole culture of... people got a lot of money at the top.

But what you got then in the 1990s was, in my opinion, stage two. And this was the technology mania, and the rise of the securities markets, taking technology and making this incredible bubble out of it. And a new crowd of people got rich. Plenty of the old people, but a whole lot of new people. New people who tended to have a more liberal politics in many cases, to name Internet companies, things like Yahoo! and AskJeeves, and what have you.

If you look at the list of new money in the Forbes 400 say in 199... 1998 or 1999, when the Internet crowd was coming in big time, we've got an awful lot of Democrats. And the Democratic Party has in its own way started to be a party of a different type of wealth. The Republicans have the smoke stacks and the polluters and the ranchers and the oil companies, and the Democrats have a lot of the communications media, a lot of biotechnology, a lot of the coming stuff ...

So what we've got are two sets of people in Washington who basically because of the whole demand of financing campaigns go to people with money. They go to different sets of money and you've sort of got what you had in politics before the Civil War: the Democratic Party, that basically was in with a southern plantation aristocracy, and Republicans who are in with the merging industry. Nobody was for the little guy.

BILL MOYERS: What's the ordinary Joe and Jane to do? I mean, the guys running these cameras working here, whom you've met, they can't write big checks to either political party or political candidates, and yet it's a struggle not to leave people despairing today when they read an analysis such as "Wealth and Democracy." What are the average folks to do?

KEVIN PHILLIPS: Well, one thing I think they have to do is they really have to say on certain issues, which are not strictly party issues, we've just got to mobilize on the issues, whether it's campaign finance or other things like that. But secondarily they've got to work to make the party system make a difference. You can't have two parties that represent different flavors of great wealth and expect not to see all these weaknesses continue to grow.

BILL MOYERS: But you've already said that both parties spend all their time raising money. And they don't listen to the people running the cameras. They listen to the people writing the checks.

KEVIN PHILLIPS: Yeah, well, some of the time they do, because you keep reading about votes in Congress periodically, where these outrageous proposals, be they tax or trade or other things, they only make it through by one, two, three votes. People are standing there twisting arms of Presidents, giving them six post offices and three favors.

Now, if there wasn't some responsiveness to public opinion and a sense that things have gone too far, that wouldn't happen. So the trick is to mobilize somehow or other institutions in this political culture that will take those issues on which Congress ... some of them would like to be made to vote against their contributors. And, you know, I'm ... I'm not sure how to do it. I think ...

BILL MOYERS: It took a rich man, Ross Perot, to make it happen in any significant manifestation ... eight years ago, ten years ago.

KEVIN PHILLIPS: But see, part of the thing in ... in the United States, is that the minority of rich people are usually on the side of trying to make America work like America. You had in the last election, in the three people who were running sort of as populist, John McCain, millionaire, son and grandson of four-star admirals, Bill Bradley, multi-millionaire, former basketball player, even Ralph Nader's got three or four million dollars worth of investments. So all kinds of people go against what should be their interest financially because of what they think is the right thing to do. That's really something to build on.

BILL MOYERS: What's been the biggest change? You ... I was in Washington in the '60s, you came right after, helped elect Richard Nixon, we were both in our 30's then, very young 30's, what's been the biggest change in Washington since we were young men there?

KEVIN PHILLIPS: I think the entrenchment of money in ways you can't even begin to count. It used to be that when a new wave politically came to Washington they swept it out. And that was certainly true with Lincoln, it was certainly true with FDR. It couldn't happen even in the '60s, in my opinion. There's no way to sweep now. The whole structure was just a pyramid of ... of economic influence mongering.

BILL MOYERS: Do you think the new McCain Feingold ban on soft money will have any positive impact on this?

KEVIN PHILLIPS: Oh, it'll have some positive impact, but in many ways, it's gonna be another version of the lawyers and accountants full employment act.

BILL MOYERS: So what do we do?

KEVIN PHILLIPS: Keep fighting. I think there are signs that it's turning now. To me one of the most important milestones will be if people, and I include the media here, have the courage to document and put on the front page what they won't really touch now, which is ...

BILL MOYERS: Which is?

KEVIN PHILLIPS: All the examples of the Bush family's role in the rise of Enron. Here, we're running around, we're blaming these accountants, these tricksters that were in Enron, but George W. and George H.W., his father, were very much involved in the whole rise of Enron's influence and power in this country. But you ... you don't see that. People in the press have a lot of trouble touching these issues right where the rubber hits the road.

BILL MOYERS: Well, when you've got anchors making eight, nine, ten million dollars a year, when you've got a handful of huge media corporations owning over half of the outlets in this country, do you expect much populism from those people?

KEVIN PHILLIPS: No. And that's the fundamental problem. How do you get dynasties to talk about other dynasties? I think it's a real difficulty. Unfortunately, that means that some of us have to start talking about stuff we'd rather not do all the time because if you don't make a lot of friends by doing it ... it's tough, but a dynasty is a dynasty is a dynasty and these problems are there, and this incredible amount of money is ... is just staring this country's historical role in the face

BILL MOYERS: How do you explain that the pro-wealth policies of the right, the conservatives, have endured so much support among working Americans and low income Americans?

KEVIN PHILLIPS: Well, all I can say is if I were a Democratic senator, I would go on and make a speech that might remind Democrats of stuff they haven't heard in a long time. You get professors who are dedicated liberals and they go on and they make these speeches and nobody pays any attention. You have to basically go in there and do a number. You have to go in there and just stand there and describe who supports somebody, who is paid for and who has done this, that and the other.

If the Democrats wanted to take all these issues out and run 'em up the flagpole, there is still plenty of people ready to salute. That's why we have some of these close votes. But you've got to be willing to do it. And I understand why a lot of them don't want to do it. But, you know, who's gonna do it? Ralph Nader couldn't do it. His friends dropped him when he talked about all of this.

--Kevin Phillips, Author of 'Wealth and Democracy', Now with Bill Moyers
Why does the GOP insist upon repeating failed strategies? Reaganites promised that the stimulated economy would outgrow the deficit and the budget would be balanced "...within three years, maybe even two." It didn't! Reagan tripled the deficit and, on the way, doubled the size of the federal bureaucracy. Reagan's tax cuts were followed promptly by the longest and worst recession since Herbert Hoover's Great Depression. As Robert Freeman correctly points out: "...Jimmy Carter's last budget deficit was $77 billion. Reagan's first deficit was $128 billion. His second deficit exploded to $208 billion. By the time the "Reagan Revolution" was over, George H.W. Bush was running an annual deficit of $290 billion per year."

How will Bush the lesser compare to Reagan? By the year 2002, Citizens for Tax Justice were already writing:
Over the ten-year period, the richest Americans—the best-off one percent—are slated togwb0602a.gif - 10559 Bytes receive tax cuts totalling almost half a trillion dollars. The $477 billion in tax breaks the Bush administration has targeted to this elite group will average $342,000 each over the decade.

By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52 percent of the total tax cuts will go to the richest one percent—whose average 2010 income will be $1.5 million. Their tax-cut windfall in that year alone will average $85,000 each. Put another way, of the estimated $234 billion in tax cuts scheduled for the year 2010, $121 billion will go just 1.4 million taxpayers.

Although the rich have already received a hefty down payment on their Bush tax cuts—averaging just under $12,000 each this year—80 percent of their windfall is scheduled to come from tax changes that won’t take effect until after this year, mostly from items that phase in after 2005.

1968 was the year in which measured postwar income was at its most equal for families. The Gini index for households indicates that there has been growing income inequality over the past quarter-century. Inequality grew slowly in the 1970's and rapidly during the early 1980's. ...Generally, the long-term trend has been toward increasing income inequality. Since 1969, the share of aggregate household income controlled by the lowest income quintile has decreased from 4.1 percent to 3.6 percent in 1997, while the share to the highest quintile increased from 43.0 percent to 49.4 percent. Most noticeably, the share of income controlled by the top 5 percent of households has increased from 16.6 percent to 21.7 percent. Over the same time period, the Gini index rose 17.4 percent to its 1997 level of .459.

Income Inequality, Census Bureau

The trend began then has continued: October 2003 figures from the US Census Bureau make stark reading:
Median household incomes are falling The number of Americans without health insurance rose by 5.7 percent to 43.6 million individuals.

The number of people living below the poverty line ($18,392 for a family of four) climbed to 12.1 percent — 34.6 million people.

Wages make up the majority of income for most American families. As "Downward Mobility," NOW's report on workers and wages illustrates, many American workers are facing corporate efforts to cut pay and benefits, which could lead to more American families struggling to stay out of poverty.

The results in black and white:
  • Twenty percent of the population own 84% of our private assets, leaving the other 80 percent of the population with 15.6 percent of the assets.
  • In 1960, the wealth gap between the top 20 percent and the bottom 20 percent of Americans was thirty fold. Four decades later it’s more than seventy-five-fold.
  • Either way -- wealth or income – America is more unequal, economists generally agree, than at any time since the start of the Great Depression…
  • And more unequal than any other developed nation today.
  • Inequality.org

The most pernicious effect of GOP economic policy is the effect of declining opportunity, a corollary of declining in wealth among all but the very rich.

It is merely rhetorical to ask: why does the GOP seem to repeat ad nauseum utterly failed strategies that have never been shown to work? The answer is simple: the GOP sales pitch is what Reagan Budget Director David Stockman called a 'Trojan Horse'. The purpose of the tax cut is not to trickle down. The tax cuts always do precisely what the GOP insiders know they will do: they enrich the GOP base! Here is how someone who lived through the Reagan nightmare remembers it:

I was in the automotive field at the time, and dozens and dozens of established tool manufacturers, unionized shops, producing high quality tools, small companies with deep roots and real a commitment to the towns they were in all across the Midwest and the local communities, went out of business.

Why? Because with deregulation any hustler could get virtually unlimited financing and set up manufacturing plants overseas producing exact copies of American made tools and flood the US market with them with no fear of the Reagan administration enforcing any laws against them.

It also became easier, and far less risky, to get financing to set up a thousand junky identical chain outlets than it did for small local businesses to get credit or tax relief - restaurants, auto parts stores, hardware stores, grocery stores, florists - thousands and thousands of small businesses chewed up and destroyed.

We have a younger generation of people who have no personal experience with so many things - local businesses and tight knit communities, affordable, convenient and efficient public transportation, wages that allowed one person in a household enough income to support the family, homes that were homes, not investments, easy access to public recreation, confidence in the safety of food and other consumer items, all regulated and inspected for the public welfare, freedom from the relentless intrusion of corporations into our lives, and on and on and on.

Reagan destroyed the country, and if we try to gloss over that (which at the very least Obama's remarks have done) or if we buy into the dishonest rationales and excuses and obfuscations that the Reagan administration used to disguise their agenda and to sell it to the public, we surrender any chance at real change, we bury the coffin forever into which the right wingers have put the left - and by extension, the majority of the American people, and we condemn ourselves to living in this ongoing nightmare of destruction and human suffering.

It is not time to make nice with the Reagan legacy propagandists, even by implication or omission. It is time to relentlessly and fearlessly point out that the crisis the country is in is best described and analyzed as the chickens coming home to roost from the Reagan era.

It is time to fight. It is not time to heal or move on—no matter how attractive and appealing this may be—it is not time to paper over the profound divide in the country, it is not time to accommodate or apologize for

--Found on the Democratic Underground

Paul Krugman can always be depended upon to put this kind of thing in perspective.
Bill Clinton knew that in 1991, when he began his presidential campaign. “The Reagan-Bush years,” he declared, “have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect.”

Contrast that with Mr. Obama’s recent statement, in an interview with a Nevada newspaper, that Reagan offered a “sense of dynamism and entrepreneurship that had been missing.”

Maybe Mr. Obama was, as his supporters insist, simply praising Reagan’s political skills. (I think he was trying to curry favor with a conservative editorial board, which did in fact endorse him.) But where in his remarks was the clear declaration that Reaganomics failed?

For it did fail. The Reagan economy was a one-hit wonder. Yes, there was a boom in the mid-1980s, as the economy recovered from a severe recession. But while the rich got much richer, there was little sustained economic improvement for most Americans. By the late 1980s, middle-class incomes were barely higher than they had been a decade before — and the poverty rate had actually risen.

When the inevitable recession arrived, people felt betrayed — a sense of betrayal that Mr. Clinton was able to ride into the White House.

Given that reality, what was Mr. Obama talking about? Some good things did eventually happen to the U.S. economy — but not on Reagan’s watch.

--Paul Krugman, Debunking the Reagan Myth

Reagan/Bush tax cuts are payoffs to the very rich for their support. For everyone else, the GOP prescription is simple: just take another dose of what's making you sick.

Wednesday, July 15, 2009

Move to China; Cut Out the Middle Man

by Len Hart, The Existentialist Cowboy

If because your job has been out-sourced to China and you are reduced to shopping at Wal-Mart, you should consider a move to China to cut out the middle man! China is going to get your all but worthless dollars anyway by way of US retail outlet: Wal-Mart! And when the dollar is completely worthless, it 'won't matter anyhow'. We will all be living in Chinese made tents.

If because of GOP transfers of unearned wealth to the increasingly tiny elite of about one percent of the population, labor is unproductive or impoverished the productivity of the nation will decline and ultimately collapse.

If the poor can no longer afford decent housing or food it is because elites have bid up prices on commodities. But because conservative robber barons and huge corporations have consolidated control of markets, your threats of boycott are laughed at. If you can no longer afford decent housing, health care or food, you have most certainly fallen off the bottom rung. It is clear that big business doesn't care about your fate and because the GOP is owned, the GOP doesn't care either.

A Give a Shit Attitude!

Just this kind of arrogance preceded the crash of '29 and the Great Depression which followed. This is not, therefore, the first time in American history that 'big business' flouted its 'give a shit' attitude. In his great 'A Rendezvous with Destiny' speech to the Democratic National Convention of 1936, FDR' made it very clear what is wrong with America today. His great speech is just as true now as then. FDR called it what it was and remains: economic tyranny!
For too many of us the political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor, other people's lives. For too many of us life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness.

Against economic tyranny such as this, the American citizen could appeal only to the organized power of Government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people's mandate to end it. Under that mandate it is being ended.

The royalists of the economic order have conceded that political freedom was the business of the Government, but they have maintained that economic slavery was nobody's business. They granted that the Government could protect the citizen in his right to vote, but they denied that the Government could do anything to protect the citizen in his right to work and his right to live.

Today we stand committed to the proposition that freedom is no half-and-half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.

--A 'Rendezvous with Destiny, Franklin Delano Roosevelt, 1936
There are but two recent root 'aggravations' of this economic tyranny:
  • The political ascendancy of the Bush family --Prescott Bush, George H.W. Bush, and, more recently, George W. Bush.
  • The rise of Ronald Reagan, his disastrous and inequitable tax cut of 1982, the two year long depression caused by 'Reaganomics', his legacy of increased terrorism against US interests, rising inequalities of wealth and income, the deterioration of educational standards seemingly everywhere in the US.
The origins of our dollar's collapse may be found in the Nixon and Bush trips to China as well as Reagan's 'give away' to his elite and greedy base. These extremist right wing policies have eaten away at our economic health like wood worms. The right wing/GOP subversion of our currency resulted in exceptions for the ruling elites while lower and working classes pay more than their fair share of taxes. It's why the real elites --just one percent of the total population--often pay no tax whatsoever!

Labor is taxed but capital gets a free ride --a recipe for an impending economic collapse, a collapse that appears to be well underway and beyond anyone's power or ability to stop. Nevertheless, the government will play it's well-rehearsed role, that of shakedown arm of the nation's tiny but increasingly wealthy elite.
Nixon deplaned in Beijing on February 21, his flair for both diplomacy and drama well in evidence. Notes Nixon biographer Stephen Ambrose, "He knew that when his old friend John Foster Dulles had refused to shake the hand of Chou En-lai in Geneva in 1954, Chou had felt insulted. He knew too that American television cameras would be at the Peking airport to film his arrival. A dozen times on the way to Peking, Nixon told Kissinger and Secretary of State William Rogers that they were to stay on the plane until he had descended the gangway and shaken Chou En-lai’s hand. As added insurance, a Secret Service agent blocked the aisle of Air Force One to make sure the president emerged alone."

Soon after their arrival, Nixon and Kissinger were summoned to a previously unannounced meeting with Chairman Mao, which Kissinger later referred to as their "encounter with history." Next came a formal welcome banquet hosted by Chou En-lai, broadcast live on the American morning news thanks to the 13-hour time difference. In the Great Hall of the People, as the People’s Liberation Army band played such American favorites as "America the Beautiful" and "Home on the Range," course after course was followed by seemingly endless rounds of toasts. "‘Seize the hour! Seize the day!’" Nixon quoted from Mao, raising his glass to his Chinese hosts. But beyond the pomp and spectacle, the banquets sent a clear and dramatic message to everyone watching that a new relationship was being forged.

--Nixon's China Game, The American Experience
Nixon's trip was preceded by a long buildup that included 'ping pong diplomacy' and a little known or written about advance trip by George Bush Sr.
Premier Chou En-lai worked the public relations opportunity beautifully, receiving the Americans at a banquet in the Great Hall of the People on April 14. "You have opened a new chapter in the relations of the American and Chinese people," he told the unlikely diplomats. "I am confident that this beginning again of our friendship will certainly meet with majority support of our two peoples." He also extended an invitation for more American journalists to visit China, provided they do not "all come at one time." That same day, the US announced plans to remove a 20-year embargo on trade with China. A Chinese table tennis team reciprocated by visiting the United States.

Ping-Pong was "an apt metaphor for the relations between Washington and Peking" noted a Time reporter, as each nation signaled, in turn, its openness to change. Despite the public warming trend, Nixon and Kissinger decided to keep their back-channel negotiations with China to themselves. It was not until July 15, after Kissinger's secret mission to Beijing, that Nixon announced that he, too, would make the journey the following year, as the first American president to visit China.

--Ping-Pong Diplomacy, The American Experience
Bush's bailouts proved Marx correct but, like everything else GOP, they' mucked it up. It's not even 'good' Marxism. The bailouts have benefited only the nation's elites, the same gang that had benefited most from Reagan's tax cut of 1982. Marx said that Capitalism would collapse of its own inconsistencies, 'internal tensions which will lead to its destruction.' The GOP, the greater of two major sellouts to the MIC and K-Street, merely hastened that result. The 'elites' who benefit do not merely maintain offices on K-Street, they OWN K-Street! The Military/Industrial complex serves at their pleasure. The MIC is expected to defend 'their' interests (not yours) abroad with the lives of YOUR sons and daughters.

Some recent history may illustrate the point: the Wall Street crash of 1929 was followed by a severe world wide depression acutely felt in the US, Germany, France, and to a lesser degree --Great Britain and Sweden. Nevertheless, unemployment was high in Sweden when that nation returned a Labor government committed to a program of public investment to address the high unemployment problem. It worked. By 1935 real output in Sweden was 7 percent above its 1929 level. Unemployment was reduced and the finance minister was said to have been happy to suffer another budget deficit to stimulate the economy.

Ronald Reagan's budget deficit did not have as happy a result. So --why did Keynesian economics work for Sweden in 1929-30 but not for Ronald Reagan more recently? The answer is simple: Sweden was then --as it is now --among the world's most egalitarian economies. The US --among the very least egalitarian! Reagan's tax cut of 1982 benefited only the investor class at a time when increased consumer spending might have stimulated the economy. A 'Keynesian' deficit might have stimulated growth! The Reagan deficit had the opposite effect.

What's Wrong with the American Economy is Wealth and Income Inequities and the Dysfunctional Mentalities That Create Them

The proof of my assertion is the public record. Reagan's tax cut of 1982 was quickly followed by the nation's worst recession since the Great Depression, a recession of some 18 months characterized by record levels of unemployment and home losses. The economy contracted, people had less money to spend, many lost their homes and slept under bridges in 'boomtown' Houston. I know --I saw it. I was one of the lucky ones who somehow managed to keep a cozy home to sleep in. Luck! But for the grace of God go I! And no thanks to Unca Ronnie!

Reagan's best critics were found inside his regime, primarily, budget director David Stockman who blamed a "noisy faction of Republicans" for Reagan's infamous tax cut and the debacle that followed. Reagan might have achieved the prosperity that Keynes had predicted. That might have happened had his policies rewarded the working and middle classes instead of the rich and idle elites. Fact is --Ronnie was owned! The government is owned! The MIC is owned! We are owned! We are slaves to a system that may be beyond out ability to reform short of revolution.

The Reagan-heads forgot that the wealth of a nation is the result of the 'work' that is done by its people --not the 'offshore investments' of an utterly worthless, idle leisure class.

The US economy has entered into a contraction not seen since 1929. Private and public payrolls combined have shrunk for 14 straight months. Just recently, the US economy lost some 650,000 jobs over a period of four months. At the time, I asked: why had not GWB's bailouts worked? Obviously, as was the case with Reagan's 'voodoo economics', the wrong people got the money. Most certainly, the wrong people continue to get the money. The wrong 'people' were bailed out. The wrong people still get rich. You still get poorer whether you still have a job or not.

There was no Reagan recovery!


The record shows that the growth rate was 3% between 1979 and 1989 --the same as the growth rate between 1973 and 1979! There was, then, no improvement with "voodoo economics" than without it. Did Reagan's tax cuts bring about more growth than would have normally occurred? Of course not! The opposite occurred. The GOP/right wing is happy when you swallow whatever they puke up.

Worth repeating:
The opposite occurred. The record shows that the growth rate was 3% between 1979 and 1989 --the same as the growth rate between 1973 and 1979! There was, then, no improvement with "voodoo economics" than without it.
There was no Reagan recovery. Punch out the next gopper who tries to tell you that there was. Wealth did not trickle down! Rather, wealth has continued to be transferred upward to about one percent of the total population. Recently, the bailouts just wound up in the wrong hands and may have made matters worse! As Santayana said: "Those who do not remember the past are condemned to relive it!"

I am inclined to believe that this transfer was deliberate, planned and executed. It abated only briefly in Clinton's second term. That is but one reason Clinton is officially and systematically demonized and reviled. I have my own problems with Clinton, that is, he did not go far enough. But everything said about Clinton by Republicans are lies! Likewise, I have problems with Obama --but everything said about him by Republicans can be dismissed summarily.

The rise of Ronald Reagan brought with it a spreading of wealth upward to the upper classes and Wall Street insiders, in fact, an increasingly tiny elite of just one percent of the nation which owns more than 90 percent of the nation's total wealth. That fact is graphically illustrated above. The result is factually documented by the government's own agencies --Census Bureau, Bureau of Labor Statistics, Department of Commerce-BEA, et al. Income inequality is measured by what economists call the GINI index. The higher the GINI, the greater the inequality. These numbers, recognized and cited by economists from Friedman to Krugman, from Keynes to Galbraith, invariably increase during GOP regimes.

Now --as the late Steve Kangas pointed out, 'conservatives' will claim that correlation is not 'causation'. I think conservatives are wrong on that point, but if, in fact, GINIS always go up under GOP regimes, what difference does it make? The pragmatic solution is simply this: fire the GOP! Permanently! We cannot afford to continue to support both the GOP and its elite, pampered, privileged sponsors in business, industry and government. See more about 'income inequalities' at: What do liberals believe about income inequality? Also: Myth: The rich get rich because of merit. The rich get rich because they are born rich and get obscene tax cuts for producing nothing.

There are many parallels with the American economy of the 1920s. The economy was booming but by 1927 the nation had overproduced goods for which there was no market. Overproduction led to a slowdown in both manufacturing and agriculture. This is evidence --if not proof --that 'trickle down/supply side' economics is a deliberate right wing fraud. Transferring monies to manufacturers that are over-produced is economic disaster. Why should a capitalist get a tax cut for producing product that cannot and will not be sold? Wealth does not 'trickle down', rather, it is transferred to tax heavens offshore. Clearly --a bailout for big banks is a mistake that will continue to have the effect of reducing the supply of money in circulation --a 'contraction'. The so-called 'Great Depression' was, in fact, a great contraction in which those who would have spent monies were deprived of it.

During the Great Depression and, later, Ronald Reagan's depression of about two years, millions lost their jobs. Earlier, in 1929, bankers and financiers continued to speculate on stocks, borrowing the money and buying stocks 'on margin'. More recently, 'short sellers' made fortunes that you can rest assured have already been transferred into offshore tax havens.

The wealth of a nation is not the money it prints, borrows or coins. The wealth of a nation is the productivity of its people and their industries. Both declined under Reagan and declined again under Bush and declined yet again under the other Bush!

One wonders why Reagan didn't just cut out the middle man. A more equitable tax cut or better a more progressive tax might have put more spendable income directly into the hands of consumers. Spent money circulates and drives an economy. That consumers spend money seems to be a fact lost on the likes of Reagan, Bush, and the nation's rich and callous elites.

Surely, there were knowledgeable advisers in Reagan's regime who knew better. The tax cut, therefore, was entirely political, a pay off to the rich for their support, or more precisely, their investment! Nothing has changed in the GOP. The Bush administration has made several such "payoffs" during his catastrophic and criminal regime.

The 'contraction' of an economy is typically called a 'depression'. The US economy is contracting due to
  • the transfer of wealth to but about one percent of the population;
  • this 'elite' has transferred most of its wealth offshore where it has absolutely no good effect on the domestic US economy.
The current collapse of the US is the end result of a trend that was begun with the passage of Ronald Reagan's infamous tax cut for his rich, elite base. The year was 1982. Historians willl write of that date that it was the beginning of the end of the American empire.


Sunday, May 24, 2009

When you die in America, it will be because you are NOT RICH!

by Len Hart, The Existentialist Cowboy

Of the many ways in which a ruling elite of just one percent of the US population wages war upon the American people, the denial of health care to everyone but the very, very rich is the most evil. This is a direct result of the GOP/right wing domination of America since the rise of Ronald Reagan.

Today, just one percent of the population is in a position to deny everyone but the very, very rich a right to even basic health care. Denied this right, millions will die that might have lived productive and meaningful lives. This is not merely a matter of personal loss; it is that of the nation.

Since the GOP ascension to power began with the rise of Ronald Reagan in the early 80s, American wealth has been re-distributed upward. Gini indices evinced a dramatic shift upward even as Ronald Reagan still ruled. Those indices, published by the Bureau of Labor Statistics, the Census Bureau and the U.S. Department of Commerce-BEA prove that only the uppper quintile benefited from Reagan's widely touted tax cuts'.

Although this trend reversed under Clinton, the GOP wasted no time in undoing the good that had been done. Under Bush Jr, the GOP transfer of wealth to the ruling aristocracy, the ruling elite was resumed at even faster rates.

Today --just one percent or less of the US population earns more and owns more than 90 percent of the rest of us combined. As a result, 90 percent of us are priced out of the markets for better homes, cars and other consumables, but most importantly crucial essentials like health care. The effects of these policies are transparent. These effects are achieved so predictably, so methodically, so consistently that I am entirely justified in charging that it is all done deliberately.

In today's America, the chances are increasing that when you die it will be because you are NOT RICH!

That is but ONE result of the right wing/GOP THEFT of America's wealth! Question is: what are you going to do about it?

We are repeatedly told that the US is the best and most advanced nation on earth! In response: I say: BULLSHIT! That might have been true before the four horsemen of the GOP road roughshod through what had been the hope of the world!

Following are a letter from my friend and progressive crusader, Doug Drenkow and a recent column by Paul Krugman:
Progressive friends,

Thanks for this article, which -- in classic Krugman style -- lays it on the line. It was remarkable to me that in the months running up to the election the people on the Right I spoke with had one thing consistently on their mind (another example of the lockstep political messaging from the Right): They didn't speak with passion about the election -- it was apparently obvious even to them that Bush was too much of an albatross around any GOP nominee's neck -- but they did against health care reform, which they even more than I knew was going to be the big issue (It is the Number One issue in labor/management disagreements; and has been noted elsewhere, as by the president, rising health care costs are driving much of the increase in costs of entitlement programs, read Medicare and Medicaid, which are not as cataclysmic and the Right insists, in their continuing effort to dismantle those and other social programs, but which do demand addressing).

What is most remarkable to me, though, is not the lockstep messaging but the opposition to something that affects everyone, across the political spectrum: the failure of our existing health "care" system to deliver adequate care to millions, including those going bankrupt from medical expenses (Most personal bankruptcies are due to medical expenses, and in most of those cases the person going bankrupt had health insurance when he or she first got sick: Get sick, lose job, go broke -- everyone I've talked to acknowledges that as a very real, very big problem).

In a sense, we are in a political battle like the military battle we're in against Al Qaeda: Unlike in the Cold War, when our adversary was controlled, as we were, by Mutual Assured Destruction (MAD), when we're up against those opposing the repair of our health care system or we're fighting suicide bombers we're dealing with those who are basically willing to take themselves down just as long as they take us down with them.

Just as we cannot allow the Taliban and Al Qaeda to get their hands on the growing Pakistani nuclear arsenal -- I doubt they would really be dissuaded from using such powerful weapons by our threats to send them to all those virgins "awaiting them" in Paradise (Damn their blasphemous twisting of Islam's basically humane teachings) -- we cannot allow the Right, funded by the deep pockets of Big Pharma, Big Insurance, Big Etc., to continue propping up a system literally taking and otherwise destroying tens of millions of our lives (Not even Al Qaeda can do that).

As we approach Independence Day, we are reminded that America was founded in dedication to the inalienable rights of life, liberty, and the pursuit of happiness; and there is no more fundamental right than the right to life (and I'm not getting into the particulars of the abortion issue now but rather the general principle vital to all of us who live and breathe) and there is no issue more important than allocating the resources we do have, as the richest nation on Earth and in history, to provide as good a care as we can to all those in need, financed as equitably as possible -- I'm sure we can come up with a system not only as good as that working in every other industrial nation, as we've heard ad nauseum, but even better, in terms of quality, accessibility, and affordability of care and, again, equity in financing (Yes, I'm talking progressive taxation, not the regressive "value added" sales-type tax as used so much in Europe to finance health care).

The Obama Administration is about to begin its very public push for health care reform -- beginning on the sixth of June (http://my.barackobama.com/page/content/hckickoff) -- and ultimately, as always, the real power in this country lies not with big business or big government but with the public at large. That was the spirit that put our historic president in office (and I believe he will be historic not only because of his ancestry but also because of his leadership of the nation, with our backing, into much better years ahead). If we demand real reforms, then woe be unto those who oppose us. Change will, however, probably be at least somewhat incremental, if history is any guide; but change can be inevitable -- if and only if we the people demand it.Change health care for the better? Yes we can!

--Doug Drenkow
And this from Paul Krugman:
That didn't take long. Less than two weeks have passed since much of the medical-industrial complex made a big show of working with President Obama on health care reform -- and the double-crossing is already well under way. Indeed, it's now clear that even as they met with the president, pretending to be cooperative, insurers were gearing up to play the same destructive role they did the last time health reform was on the agenda.

So here's the question: Will Mr. Obama gloss over the reality of what's happening, and try to preserve the appearance of cooperation? Or will he honor his own pledge, made back during the campaign, to go on the offensive against special interests if they stand in the way of reform?

The story so far: on May 11 the White House called a news conference to announce that major players in health care, including the American Hospital Association and the lobbying group America's Health Insurance Plans, had come together to support a national effort to control health care costs.

The fact sheet on the meeting, one has to say, was classic Obama in its message of post-partisanship and, um, hope. "For too long, politics and point-scoring have prevented our country from tackling this growing crisis," it said, adding, "The American people are eager to put the old Washington ways behind them."

But just three days later the hospital association insisted that it had not, in fact, promised what the president said it had promised -- that it had made no commitment to the administration's goal of reducing the rate at which health care costs are rising by 1.5 percentage points a year. And the head of the insurance lobby said that the idea was merely to "ramp up" savings, whatever that means.

Meanwhile, the insurance industry is busily lobbying Congress to block one crucial element of health care reform, the public option -- that is, offering Americans the right to buy insurance directly from the government as well as from private insurance companies. And at least some insurers are gearing up for a major smear campaign.

On Monday, just a week after the White House photo-op, The Washington Post reported that Blue Cross Blue Shield of North Carolina was preparing to run a series of ads attacking the public option. The planning for this ad campaign must have begun quite some time ago.

The Post has the storyboards for the ads, and they read just like the infamous Harry and Louise ads that helped kill health care reform in 1993. Troubled Americans are shown being denied their choice of doctor, or forced to wait months for appointments, by faceless government bureaucrats. It's a scary image that might make some sense if private health insurance -- which these days comes primarily via HMOs -- offered all of us free choice of doctors, with no wait for medical procedures. But my health plan isn't like that. Is yours?

"We can do a lot better than a government-run health care system," says a voice-over in one of the ads. To which the obvious response is, if that's true, why don't you? Why deny Americans the chance to reject government insurance if it's really that bad?

For none of the reform proposals currently on the table would force people into a government-run insurance plan. At most they would offer Americans the choice of buying into such a plan.

And the goal of the insurers is to deny Americans that choice.

They fear that many people would prefer a government plan to dealing with private insurance companies that, in the real world as opposed to the world of their ads, are more bureaucratic than any government agency, routinely deny clients their choice of doctor, and often refuse to pay for care.

Which brings us back to Mr. Obama.

Back during the Democratic primary campaign, Mr. Obama argued that the Clintons had failed in their 1993 attempt to reform health care because they had been insufficiently inclusive. He promised instead to gather all the stakeholders, including the insurance companies, around a "big table." And that May 11 event was, of course, intended precisely to show this big-table strategy in action.

But what if interest groups showed up at the big table, then blocked reform? Back then, Mr. Obama assured voters that he would get tough: "If those insurance companies and drug companies start trying to run ads with Harry and Louise, I'll run my own ads as president. I'll get on television and say 'Harry and Louise are lying.' "

The question now is whether he really meant it.

The medical-industrial complex has called the president's bluff. It polished its image by showing up at the big table and promising cooperation, then promptly went back to doing all it can to block real change. The insurers and the drug companies are, in effect, betting that Mr. Obama will be afraid to call them out on their duplicity.

It's up to Mr. Obama to prove them wrong.

--PAUL KRUGMAN, Blue Double Cross,

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Saturday, May 16, 2009

How War Caused the Crash

by Len Hart, The Existentialist Cowboy

US government crimes against the people of the US amount to organized high treason! Millions are now out of work amid declining prospects. US troops still occupy Iraq, a war of aggression that the US has not begun to pay for. Unfortunately, neither people nor media have made the connection. Even worse, the US has yet to either win or pay for any war waged since World War II. Since World War II, Republican regimes have run up the highest debts and deficits in US history. What John Maynard Keynes stated the US has proven: war transfers wealth upward! Wealth flowing upward equals economic depression.

Democrats have meanwhile become GOP-lite. Nevertheless, it was GOP regimes that compounded the problem by cutting taxes but only for the rich. That means that it is only a tiny elite of some one percent of the population that benefited or shared the booty! You got stuck with the bill.

The GOP cut taxes first for the upper quintile and, later under Bush Jr, it was only the upper one percent who benefited. This is how the rich elites have literally forced the people of the US to finance and wage wars of naked aggression from which only the rich and privileged benefit. Examples include Korea, Viet Nam, Lebanon, Grenada, Panama, Iraq I and now Iraq II. None were won! None were ever paid for!

GOP regimes compounded the problem by cutting taxes first for the upper quintile and, later under Bush Jr, it was only the upper one percent who benefited. The rich elites wage wars of naked aggression from which only they benefit. It is the poorer classes who pick up the tab.

Debt was simply rolled over --but so were you! The rich were given a tax cut and everyone else got the bill and the accruing interest! As Gen. Smedley Butler put it: "War is a racket!" You were rolled over, screwed and ridiculed by the leaders of the 'right wing'! You are not expected to be smart enough to understand when you have been fucked over!

I've written about how various extra-governmental and irresponsible, non-elected entities orchestrate and conduct the ongoing auction of the US government. I've written about how the US government is clearly more responsible and responsive to foreign nations than it is to American citizens, a situation that may be high treason by any recognized definition. If you have not yet gotten 'it' -- just one percent of the nation's population benefit from the whoring out of America. Like Hitler's 'Third Reich', the whole thing has been a scam.

In times past, traitors were hanged or beheaded. Today they are allowed to barricade themselves behind several multiple rings of secured walls in exclusive 'neighborhoods' and bank their booty offshore untaxed. One might conclude that these elites are fortified and actually prepared for revolution.

Millions are now out of work amid declining prospects. US troops still occupy Iraq, a war of aggression that the US has not begun to pay for. Unfortunately, neither the people or the media have made the connection. In fact, the US has probably yet to pay for any war waged since World War II. It is not coincidental that neither has the US actually won a war since WWII. It's not about winning. It's about getting rich and richer.

At the Nuremberg trials following WWII, the US stood for a principle that no nation had the right to wage aggressive war against another. The US, it is said, prosecuted from 'the top down'. The criminals were the architects of genocide, the brass who gave the order, the architects of atrocities and mass murder. Today, we repudiate those principles if we declare ourselves above them. You cannot have it both ways. If it is the US position that international laws apply only to Nazis or Muslims, then the laws apply to no one. The US position is idiocy on its face and a recipe for international anarchy and lawlessness. There are no exceptions for the U.S.

The term victor's justice is associated with Herman Goring! Now --we have become Goring or, at least, the best evidence that he was correct. We have become the hypocrites he said were were. Our so-called 'government' has done this by lying to the world, to us and to itself. Lying to the American people, however, betrays the social contract between government and the sovereign people! If the US government is prosecutable under the principles we established at Nuremberg, then we have become the Nazis. If we fail to prosecute Bush and complicit members of the US government, then we will have become Nazis. We will have have lost World War II. We will have met the enemy and --to our everlasting shame --embraced him.

The ruling one percent got rich with unjust tax cuts affecting only their 'class'; it did so by defrauding congress, funding and/or buying right wing politicians, supporting the use of illegal 'weapons that melt the skin off children' or poisoning them in the womb. The US became a Nazi nation by targeting civilians, journalists, and hospitals. The government did it with your money. The government believed it their right to shake you down! The ruling elite pays no taxes. Paying taxes, supporting US atrocities with money --that's YOUR job!

US crimes that you have supported because the elites have left to you the burden of paying taxes include murder, assassinations, propaganda, violations of the Hatch Act and the Voting Rights Act, warrantless spying, unlawful detentions, the imprisonment of children, obstruction of justice, torture, misprision of felony, exposure of classified information, treason, unconstitutional use of the military domestically. That's an incomplete list.

That the use of torture was debated at all is a travesty. That question was settled with the Nuremberg Principles and trials, various Federal Laws and numerous court cases affirming US treaty commitments. Most prominently, US Codes, Title 18, Section 2441 specifies the death penalty for the very crimes Bush ordered. Why has Bush not been indicted and/or bound over for trial? Why is this federal law never mentioned on TV or the so-called 'mainstream media'?
I've written about how various extra-governmental and irresponsible, non-elected entities orchestrate and conduct an ongoing auction, a 'pimping' of the US government and sovereignty. I've written about how the US government is clearly more responsible and responsive to foreign nations than it is to American citizens, bordering if not outright high treason. Moreover, just one percent of the nation's population benefit from the whoring out of America. In times past, such traitors were hanged or beheaded.

Liberals, the media, the 'left wing' are demonized in a transparent smokescreen while those who are enriched by the industries of mass murder, war and war crimes get away with it. The 'real killers' are the MIC [prominently: Halliburton, KBR et al], K-Street, political whores in Congress, Bush Jr, the Bush crime family and anyone else who has made a crooked buck lying about US intentions and actions in Iraq.

Our current problems are often compared to the situation just prior to the crash of 1929. At that time, John Maynard Keynes blamed conservative economic policies for Britain’s economic problems. High un-employment, specifically, inspired two great works: A Treatise on Money [1930] and the General Theory of Employment, Interest and Money [1936]. Keynes favored a unified monetary policy and scandalized 'Classicists' with the proposition that a national budget is not merely an accounting of government revenues and expenditures but an instrument by which a national economic policy may be effected. Classicists and laissez faire ideologists were horrified.

Keynes became famous at the end of World War I when he strongly opposed what he considered to be outrageously excessive reparations that the allies had proposed be assessed Germany.
Now ordinary experience tells us, beyond doubt, that a situation where labour stipulates (within limits) for a money-wage rather than a real wage, so far from being mere possibility, is the normal case. Whilst workers will usually resist a reduction of money-wages, it is not their practice to withdraw their labour whenever there is a rise in the price of wage-goods. It is sometimes said that it would be illogical for labour to resist a reduction of money-wages but not to resist a reduction of real wages. For reasons given below (section III), this might not be so illogical as it appears at first; and, as we shall see later, fortunately so. But, whether logical or illogical, experience shows that this is how labour in fact behaves.
--John Maynard Keynes, The General Theory of Employment, Interest and Money, Chapter 2, The Postulates of the Classical Economics
Clearly, Keynes understood the mechanism by which wealth is transferred to the elite and privileged classes. Keynes understood the 'insanity' of building an economy upon war profits. Keynes understood that 'war booty' trickles up --not down. Keynes understood and stated that war profits make the wealthy, wealthier increasing income and wealth disparities. Such economies, leveraged by debt, are increasingly fragile and subject to 'bust'. The US has arrived at that point and is vulnerable to financial crisis.
In practice, postwar policy usually consisted of measures to promote saving and investment. The first was wholly inconsistent with Keynes, based instead on the neoclassical loanable funds view that saving “finances” investment; the second was based on a multiplier view, that, while somewhat consistent with Keynes’s explication of the determination of the equilibrium level of output, relied on overly simplistic views of entrepreneurial expectation formation while ignoring important stability questions.

...
Second, attempting to maintain full employment by stimulating private investment would shift the distribution of income toward owners of capital, worsening inequality and thereby lowering the society’s propensity to consume—one of the problems addressed by Keynes in Chapter 24 of the General Theory. One of the main areas addressed by Post-Keynesians has been distribution theory and implications of heterogeneous saving rates on distribution. Further, work based on Kalecki’s profit equation shows how higher investment rates generate higher profit rates, and shifts the distribution of income toward entrepreneurs and away from workers. There are also two kinds of sectoral issues raised. A high investment strategy will tend to favor capital intensive industries, shifting the distribution of income toward higher-paid and unionized workers. The sectoral balances approach implicitly adopted by Minsky (1963) in his earliest work, and developed in detail by Wynne Godley, carries the Kalecki analysis further by examining the implications for financial balances implied by spending growth.
--L. Randall Wray, The Levy Economics Institute and University of Missouri–Kansas City,The Continuing Legacy of John Maynard Keynes
Unfortunately, the US media is not only ideologically biased, it is essentially ignorant of the principles of economics. There are no intelligent discussions of 'economics'' in the mainstreatm media. The role of the FED, for example, is never adequately described. The workings of the FED might as well be written in ancient Celtic script, illuminated and hidden away in a monolithic stone circle amid tales of knights and the long, lost secret formulae of wizards, warlocks and witches. The ruling elites --it would appear --have committed the perfect crime, a crime in which the victim does not understand what and how was done and by whom!

Now, lest anyone should get the idea that I am making no distinctions between the GOP and the Democratic party, let me hasten to add that I OPPOSE the two party system. I rarely agree with any party. But that's not the point! The point is that unless you have millions, perhaps billions to spend buying representation on K-Street, the U.S. government DOES NOT give a crap about you. That is the case whether you have been brainwashed by the right wing OR if you simply vote Democratic and hope for the best!

The effective choice that is given us by virtue of this 'system' is absurd when only one percent presume to rule. Nevertheless, given the limitations of this inherently crooked system, Democrats are the lesser of two evils one of which is IRREDEEMABLY evil. Let's take a look at the history before it gets re-written:
  • Any Democratic President has presided over greater economic growth and job creation than any Republican President since World War II.
  • When Bush Jr took office, job creation was worst under a Republican, Bush Sr, at 0.6% per year; best under a Democrat, Johnson, at 3.8% per year.
  • Economic growth under President Carter was far greater than under Reagan or Bush Sr. In fact, economic growth in general was greater under Johnson, Kennedy, Carter, and Clinton than under Reagan or Bush.
  • The job creation rate under Clinton was 2.4% significantly higher Ronald Reagan's 2.1% per year.
  • The "top performing Presidents" by this standard, in order from best down, were Johnson, Carter, Clinton, and Kennedy. The "worst" were Nixon, Reagan, Bush, Bush being worst with Reagan in the middle.
  • Half of jobs created under Reagan were in the public sector--some 2 million jobs added to the Federal Bureaucracy. Hadn't he promised to reduce that bureaucracy?
  • Reagan, though promising to reduce government and spending, tripled the national debt and left huge deficits to his successor.
  • By contrast, most of the jobs created on Clinton's watch were in the private sector.
  • Put another way: Any Democratic President beats any Republican President since World War II.
Along the way, Reagan made up a whopper --his story about a Cadillac driving welfare gran'ma. It became his administration's rationalization for cutting back social programs. Then there was the attack and invasion of tiny Grenada. Does anyone remember how Grenada became an imminent threat to U.S. security such that a war of aggression against it was necessitated or justified under international law?

One of the most harmful myths coughed up by the cult of Reagan is the myth of Reykjavik about which it is believed that Ronald Reagan put total nuclear disarmament on the table. In fact, it was Mikhail Gorbachev who raised the stakes. It was Reagan who folded, blinked and turned down what might have been our last chance to rid the world of nukes. If the world should wink out in a nuclear winter, you will have Ronald Reagan and the GOP to blame.
If, that is, the ensuing “Great Society,” to borrow a term from JFK’s successor, Lyndon Johnson, were laid low by a nuclear attack on an American city (or seven, if al Qaeda had its way).
This is the territory into which Gorbachev launched his most daring raids. First, in 1985, he announced that the Soviet Union would no longer deploy intermediate-range nuclear forces (INFs) in Eastern Europe. Later that year, he proposed that both his country and the US slice their nuclear arsenals in half.
The next year, at the memorable Reykjavik summit, Gorbachev got Ronald Reagan to agree in principle to his plan for removal of all INFs from Europe, as well as to draw them down worldwide. Caught up in Gorbachev’s enthusiasm, Reagan expressed a willingness to join Russia in eliminating all nuclear weapons in 10 years.
In the end, though, Reagan clung to his blankie, the Strategic Defense Initiative (Star Wars). Gorbachev feared SDI would lead to nukes in space, not to mention leave the Soviet defense establishment with the impression he’d been played. Their dreams of saving the world came crashing back down to earth.
--It’s not a new JFK we need in Obama, but the next Gorbachev
Reagan was a typical Republican, that is, he said many things and did the opposite. That's because every Republican has two stories to tell: one they tell to their base via "code words" like "family values"; the other, they tell to the world. This second category often consists of lies and pure BS. In this case, Reagan had talked the talked --world peace, nuclear disarmament, etc. When Gorbachev raised the stakes --total nuclear disarmament --Reagan blinked and Atlas Shrugged. Suddenly, Reagan recalled his base, the clique, the Military/Industrial complex, the moneyed class that "brung 'em"! He blinked!

Here is what Reagan himself said about the threat of nuclear war.
The Russians sometimes kept submarines off our East Coast with nuclear missiles that could turn the White House into a pile of radioactive rubble within six or eight minutes. Six minutes to decide how to respond to a blip on a radarscope and decide whether to unleash Armageddon! How could anyone apply reason at a time like that? There were some people in the Pentagon who thought in terms of fighting and winning a nuclear war. To me it was simple common sense: A nuclear war couldn't be won by either side. It must never be fought. Advocates of the MAD policy believed it had served a purpose: The balance of terror it created had prevented nuclear war for decades. But as far as I was concerned, the MAD policy was madness.
--Ronald Reagan, The Official Site
So, if that's how Ronald Reagan really felt about nuclear madness, why did he blow what is perhaps our last chance at peace? The answer is simple. Reagan was not his own man. Iran/Contra almost gave the game away. Ronald Reagan, playing stupid and senile, beat a high treason rap. The source of this treason against the people of the US lay in GOP efforts to get the US government to fund the "Contras" in Nicaragua despite a US prohibition on such military assistance. In a convoluted scheme that involved what seemed like most of the Reagan administration, arms were sold to Iran --then on the State Department's list of enemy states. Then, in violation of US law, the proceeds were funneled to the 'Contra' rebels in Nicaragua. Independent Counsel Lawrence Walsh concluded that the sale of arms to Iran violated the Arms Export Control Act, the Boland Amendment ban on aid to military activities in Nicaragua, and the entire procedure had been "fully reviewed and developed" at the very highest levels of the Reagan Administration. Walsh clearly believed Reagan himself complicit in this treasonous scheme.
The underlying facts of Iran/Contra are that, regardless of criminality, President Reagan, the secretary of state, the secretary of defense, and the director of central intelligence and their necessary assistants committed themselves, however reluctantly, to two programs contrary to congressional policy and contrary to national policy. They skirted the law, some of them broke the law, and almost all of them tried to cover up the President's willful activities.
--Concluding Observations, Investigations and Prosecutions, Lawrence E. Walsh, Independent Counsel, Final Report of the Independent Counsel for Iran/Contra Matters
Clearly --Walsh believed Reagan guilty. How did he escape indictment? The fix was in, of course, but who was behind it? Nevertheless, thirteen high level officials in the Reagan administration either pleaded guilty or were indicted, including Caspar Weinberger, Oliver North, and John Poindexter. Duane Claridge and Weinberger were pardoned! Ronald Reagan got off with a scolding paragraph at the end of Walsh's lengthy, detailed report, in which it is clear that Walsh thought Reagan, himself, personally involved with what many considered a treasonous act --that of arming an avowed "enemy" of the US. Now, Bush is credibly reported to have promised Israel that it will join an Israel nuclear attack on Iran, a nation that had been armed by the United States during yet another GOP administration. Does it get any more crooked than this?

In addition to the panoply of lies and crap, Reagan, as Albert Speer said of Adolph Hitler, rallied the bigoted, the extremist, the fascist with his seemingly endless fussilade of utterly meaningless platitudes, slogans, and high sounding catch phrases.