North American Politics and Economics:The Patriotism of the Rich
Published in Argenpress
(Argentina) on 20 July 2011
by Jorge Majfud (link to original)
Throughout the world, the rich rarely migrate; they almost never join the armies sent to their wars, which then, filled with honors and applause curse the State that sucks their blood. When economies are healthy, they demand tax cuts to support prosperity, and when things are going badly, they demand that the damned State rescue them from the catastrophe (with tax money, needless to say).
Since the 2008 financial crisis, the biggest concern of the American middle class has been unemployment and the deficit, both legacies of the Republican administration of George Bush. Within that party emerged the Tea Party, with a force that has allowed it to dominate much of the rhetoric, but which will, perhaps, be the undoing of the Republican Party in the next election, which to begin with seems favorable to them. Its banner is the Reagan-Thatcher ideology and the orthodoxy of opposing any tax increase. They assure that one cannot punish the successful and rich with taxes, because it is the rich who create the jobs when wealth begins to pour down from above. In a debate in 2008, Obama said that supporters of this theory (or rather, ideology) discovered, with the crisis, that when you hope wealth will trickle down from above, pain begins to rise up from below.
Current data (not to digress) contradicts the "trickle-down" theory, carried to extremes by the last Republican administration, because 1) the capacity for greed of those at the "top" is limitless, if not infinite and 2) unemployment has not declined in recent years, but has increased.
Although the country is no longer destroying 700,000 jobs per month, as they were a couple of years ago, the creation of new jobs is still weak (between 15,000 and 250,000 per month. 300,000 new jobs per month is what a healthy pace to lower the 9.2 percent unemployment should be).
On the other hand, productivity has grown at a much greater rate over the past year, as has, above all, the profits of large companies. Each week, you can read in trade journals about the gains of a financial giant, industrial or service related that has increased profits by 30, 50 or 60 percent, as though it were normal and customary. Any of these percentages mean several billion dollars. This includes those Detroit automakers who were evicted earlier. Not going into details about how the middle class financed the rescue of all these giants state by state without choice and under the threat that something worse could have happened.
Since the '80s, the wealth above continues to accumulate, an unemployment continues to be, since 2009, at record levels. Studies have shown that the gap between the rich and poor (Bureau of Economic Analysis), a Latin American characteristic, has grown under the trickle-down ideology. Long before the 2008 crisis, when there was still a surplus inherited from the Clinton administration, Republicans were able to reduce taxes on the richest sectors — among them, the oil sector. This grace period expired this year and was extended by Obama himself, under Republican pressure, shortly after the Democrats lost control of the House. So, Obama was heavily criticized by his own party for giving more concessions to Republicans than demanding something from them.
However, in recent weeks, positions have polarized. In one of the last meetings with the Republicans, Obama, who never loses his equilibrium, stood up abruptly threatening: "Don’t call my bluff". Before negotiations to increase the debt ceiling (normal practice in the United States and in many other countries; only during the Bush administration did they vote seven times on the same measure), the Republicans continue to try to suspend and eliminate several social assistance programs and radically refuse to raise the taxes on the rich (in many cases, billionaires).
On the other hand, Obama and the Democrats are reluctant to cut social services and instead, demand an increase in taxes on the rich. I've heard a few millionaires wondering why they did not pay more taxes, when they are precisely those most likely to contribute when the country is in need. When the country, from the middle to the bottom is in need, it should be clear. But apparently, these are not the millionaires responsible for lobbies putting pressure in the congresses.
Anyway, despite all this Republican mise-en-scène I have no doubt that prior to August 2, Congress will vote on a new lift in the debt ceiling. Why? Simply because it suits the investor gods of Wall Street, not because jobless workers or soldiers without legs are waiting for the charity of the State that sent them to the front in exchange for a speech and a few medals.
Since the 2008 financial crisis, the biggest concern of the American middle class has been unemployment and the deficit, both legacies of the Republican administration of George Bush. Within that party emerged the Tea Party, with a force that has allowed it to dominate much of the rhetoric, but which will, perhaps, be the undoing of the Republican Party in the next election, which to begin with seems favorable to them. Its banner is the Reagan-Thatcher ideology and the orthodoxy of opposing any tax increase. They assure that one cannot punish the successful and rich with taxes, because it is the rich who create the jobs when wealth begins to pour down from above. In a debate in 2008, Obama said that supporters of this theory (or rather, ideology) discovered, with the crisis, that when you hope wealth will trickle down from above, pain begins to rise up from below.
Current data (not to digress) contradicts the "trickle-down" theory, carried to extremes by the last Republican administration, because 1) the capacity for greed of those at the "top" is limitless, if not infinite and 2) unemployment has not declined in recent years, but has increased.
Although the country is no longer destroying 700,000 jobs per month, as they were a couple of years ago, the creation of new jobs is still weak (between 15,000 and 250,000 per month. 300,000 new jobs per month is what a healthy pace to lower the 9.2 percent unemployment should be).
On the other hand, productivity has grown at a much greater rate over the past year, as has, above all, the profits of large companies. Each week, you can read in trade journals about the gains of a financial giant, industrial or service related that has increased profits by 30, 50 or 60 percent, as though it were normal and customary. Any of these percentages mean several billion dollars. This includes those Detroit automakers who were evicted earlier. Not going into details about how the middle class financed the rescue of all these giants state by state without choice and under the threat that something worse could have happened.
Since the '80s, the wealth above continues to accumulate, an unemployment continues to be, since 2009, at record levels. Studies have shown that the gap between the rich and poor (Bureau of Economic Analysis), a Latin American characteristic, has grown under the trickle-down ideology. Long before the 2008 crisis, when there was still a surplus inherited from the Clinton administration, Republicans were able to reduce taxes on the richest sectors — among them, the oil sector. This grace period expired this year and was extended by Obama himself, under Republican pressure, shortly after the Democrats lost control of the House. So, Obama was heavily criticized by his own party for giving more concessions to Republicans than demanding something from them.
However, in recent weeks, positions have polarized. In one of the last meetings with the Republicans, Obama, who never loses his equilibrium, stood up abruptly threatening: "Don’t call my bluff". Before negotiations to increase the debt ceiling (normal practice in the United States and in many other countries; only during the Bush administration did they vote seven times on the same measure), the Republicans continue to try to suspend and eliminate several social assistance programs and radically refuse to raise the taxes on the rich (in many cases, billionaires).
On the other hand, Obama and the Democrats are reluctant to cut social services and instead, demand an increase in taxes on the rich. I've heard a few millionaires wondering why they did not pay more taxes, when they are precisely those most likely to contribute when the country is in need. When the country, from the middle to the bottom is in need, it should be clear. But apparently, these are not the millionaires responsible for lobbies putting pressure in the congresses.
Anyway, despite all this Republican mise-en-scène I have no doubt that prior to August 2, Congress will vote on a new lift in the debt ceiling. Why? Simply because it suits the investor gods of Wall Street, not because jobless workers or soldiers without legs are waiting for the charity of the State that sent them to the front in exchange for a speech and a few medals.