"He said, "By far the vast majority of my tax cuts go to the bottom end of the spectrum."  This was a fantastic lie.  The tax cuts benefited the vast majority of very rich people across the entire spectrum of very rich people.  Those truly at the bottom of the spectrum received a pittance, and have watched the social programs they depend on die from lack of funding, because said funding was squandered by the tax cuts.  By the end of the decade, Bush's tax cuts will substantially increase the tax burden on middle-class families. Truth does not advance the profit motive."

- William Rivers Pitt, "Anyone But Bush"

.__________________________________________________________________________________________________

/

- GEORGE AKERLOF, NOBEL PRIZE WINNER In ECONOMICS

450 economists--including 10 Nobel Prize winners--signed
a statement in protest of President Bush's tax cut plan

http://www.onpointradio.org/shows/2003/02/20030212_b_main.asp

_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Bush Says He Will Sign $350 Billion Tax Cut Deal

Bush Praises Senate for Passing Tax Cut
·
Senate Narrowly Passes $350 Billion Tax Cut
·
Cheney Breaks Tie on Senate Tax-Cut Bill
·
Treasury Chief: Tax Cuts Are Tonic for Economy; Democrats Call Plan 'Hogwash'
·
Weekly Jobless Claims Rise to 428,000

WASHINGTON  - President Bush went to Capitol Hill Thursday to thank House and Senate Republicans for narrowing their differences over this year's tax bill. The president claimed victory on the economic package, although the tax cuts were less than half of what he had requested. Bush once called a $350 billion tax-cutting plan "itty bitty."

Economists attack Bush's 'madness'

BBC, 11 February, 2003 ORIGINAL

Joseph Stiglitz: Bush package simply won't work

Nobel laureate Joseph Stiglitz told the BBC's World Business Report that Mr Bush's plans were "fiscal madness, fiscal irresponsibility".

'I never took him as a compassionate conservative.
I'm a Texan. I saw what he had done to Texas and I knew
he would do to the nation what he had done to Texas.
And by God he's done it.'

- Bill Moyers

This is the Fight of Our Lives

"The middle class and working poor are told that what's happening to them is the consequence of Adam Smith's 'Invisible Hand.' This is a lie. What's happening to them is the direct consequence of corporate activism, intellectual propaganda, the rise of a religious orthodoxy that in its hunger for government subsidies has made an idol of power, and a string of political decisions favoring the powerful and the privileged who bought the political system right out from under us."

"In creating the greatest economic inequality in the advanced world, they have saddled our nation, our states, and our cities and counties with structural deficits that will last until our children's children are ready for retirement, and they are systematically stripping government of all its functions except rewarding the rich and waging war.

Let's face the reality: If ripping off the public trust; 
if distributing tax breaks to the wealthy at the expense of the poor; 
if driving the country into deficits deliberately to starve social benefits; 
if requiring states to balance their budgets on the backs of the poor; 
if squeezing the wages of workers until the labor force resembles a nation of serfs --
- if this isn't class war, what is?
  

Go to Original
  

It is important from time to time to remember that some things are worth getting mad about.

Here's one: On March 10 of this year, on page B8, with a headline that stretched across all six columns, The New York Times reported that tuition in the city's elite private schools would hit $26,000 for the coming school year -- for kindergarten as well as high school. On the same page, under a two-column headline, Michael Wineraub wrote about a school in nearby Mount Vernon, the first stop out of the Bronx, with a student body that is 97 percent black. It is the poorest school in the town: nine out of ten children qualify for free lunches; one out of 10 lives in a homeless shelter. During black history month this past February, a sixth grader wanted to write a report on Langston Hughes. There were no books on Langston Hughes in the library -- no books about the great poet, nor any of his poems. There is only one book in the library on Frederick Douglass. None on Rosa Parks, Josephine Baker, Leontyne Price, or other giants like them in the modern era. In fact, except for a few Newberry Award books the librarian bought with her own money, the library is mostly old books -- largely from the 1950s and 60s when the school was all white. A 1960 child's primer on work begins with a youngster learning how to be a telegraph delivery boy. All the workers in the book -- the dry cleaner, the deliveryman, the cleaning lady -- are white. There's a 1967 book about telephones which says: "when you phone you usually dial the number. But on some new phones you can push buttons." The newest encyclopedia dates from l991, with two volumes -- "b" and "r" -- missing. There is no card catalog in the library -- no index cards or computer.

Something to get mad about.

Here's something else: Caroline Payne's face and gums are distorted because her Medicaid-financed dentures don't fit. Because they don't fit, she is continuously turned down for jobs on account of her appearance. Caroline Payne is one of the people in David Shipler's new book,' The Working Poor: Invisible in America'. She was born poor, and in spite of having once owned her own home and having earned a two-year college degree, Caroline Payne has bounced from one poverty-wage job to another all her life, equipped with the will to move up, but not the resources to deal with unexpected and overlapping problems like a mentally handicapped daughter, a broken marriage, a sudden layoff crisis that forced her to sell her few assets, pull up roots and move on. "In the house of the poor," Shipler writes "...the walls are thin and fragile and troubles seep into one another."

Here's something else to get mad about. Two weeks ago, the House of Representatives, the body of Congress owned and operated by the corporate, political, and religious right, approved new tax credits for children. Not for poor children, mind you. But for families earning as much as $309,000 a year -- families that already enjoy significant benefits from earlier tax cuts. The editorial page of The Washington Post called this "bad social policy, bad tax policy, and bad fiscal policy. You'd think they'd be embarrassed," said the Post, "but they're not."

And this, too, is something to get mad about. Nothing seems to embarrass the political class in Washington today. Not the fact that more children are growing up in poverty in America than in any other industrial nation; not the fact that millions of workers are actually making less money today in real dollars than they did twenty years ago; not the fact that working people are putting in longer and longer hours and still falling behind; not the fact that while we have the most advanced medical care in the world, nearly 44 million Americans -- eight out of ten of them in working families -- are uninsured and cannot get the basic care they need.

Astonishing as it seems, no one in official Washington seems embarrassed by the fact that the gap between rich and poor is greater than it's been in 50 years -- the worst inequality among all western nations. Or that we are experiencing a shift in poverty. For years it was said those people down there at the bottom were single, jobless mothers. For years they were told work, education, and marriage is how they move up the economic ladder. But poverty is showing up where we didn't expect it -- among families that include two parents, a worker, and a head of the household with more than a high school education. These are the newly poor. Our political, financial and business class expects them to climb out of poverty on an escalator moving downward.

Let me tell you about the Stanleys and the Neumanns. During the last decade, I produced a series of documentaries for PBS called "Surviving the Good Times." The title refers to the boom time of the '90s when the country achieved the longest period of economic growth in its entire history. Some good things happened then, but not everyone shared equally in the benefits. To the contrary. The decade began with a sustained period of downsizing by corporations moving jobs out of America and many of those people never recovered what was taken from them. We decided early on to tell the stories of two families in Milwaukee -- one black, one white -- whose breadwinners were laid off in the first wave of layoffs in 1991. We reported on how they were coping with the wrenching changes in their lives, and we stayed with them over the next ten years as they tried to find a place in the new global economy. They're the kind of Americans my mother would have called "the salt of the earth." They love their kids, care about their communities, go to church every Sunday, and work hard all week -- both mothers have had to take full-time jobs.

During our time with them, the fathers in both families became seriously ill. One had to stay in the hospital two months, putting his family $30,000 in debt because they didn't have adequate health insurance. We were there with our camera when the bank started to foreclose on the modest home of the other family because they couldn't meet the mortgage payments after dad lost his good-paying manufacturing job. Like millions of Americans, the Stanleys and the Neumanns were playing by the rules and still getting stiffed. By the end of the decade they were running harder but slipping behind, and the gap between them and prosperous America was widening.

What turns their personal tragedy into a political travesty is that they are patriotic. They love this country. But they no longer believe they matter to the people who run the country. When our film opens, both families are watching the inauguration of Bill Clinton on television in 1992. By the end of the decade they were no longer paying attention to politics. They don't see it connecting to their lives. They don't think their concerns will ever be addressed by the political, corporate, and media elites who make up our dominant class. They are not cynical, because they are deeply religious people with no capacity for cynicism, but they know the system is rigged against them. They know this, and we know this. For years now a small fraction of American households have been garnering an extreme concentration of wealth and income while large corporations and financial institutions have obtained unprecedented levels of economic and political power over daily life. In 1960, the gap in terms of wealth between the top 20% and the bottom 20% was 30 fold. Four decades later it is more than 75 fold.

Such concentrations of wealth would be far less of an issue if the rest of society were benefiting proportionately. But that's not the case. As the economist Jeff Madrick reminds us, the pressures of inequality on middle and working class Americans are now quite severe. "The strain on working people and on family life, as spouses have gone to work in dramatic numbers, has become significant. VCRs and television sets are cheap, but higher education, health care, public transportation, drugs, housing and cars have risen faster in price than typical family incomes. And life has grown neither calm nor secure for most Americans, by any means." You can find many sources to support this conclusion. I like the language of a small outfit here in New York called the Commonwealth Foundation/Center for the Renewal of American Democracy. They conclude that working families and the poor "are losing ground under economic pressures that deeply affect household stability, family dynamics, social mobility, political participation, and civic life."

Household economics is not the only area where inequality is growing in America. Equality doesn't mean equal incomes, but a fair and decent society where money is not the sole arbiter of status or comfort. In a fair and just society, the commonwealth will be valued even as individual wealth is encouraged.

Let me make something clear here. I wasn't born yesterday. I'm old enough to know that the tension between haves and have-nots are built into human psychology, it is a constant in human history, and it has been a factor in every society. But I also know America was going to be different. I know that because I read Mr. Jefferson's writings, Mr. Lincoln's speeches and other documents in the growing American creed. I presumptuously disagreed with Thomas Jefferson about human equality being self-evident. Where I lived, neither talent, nor opportunity, nor outcomes were equal. Life is rarely fair and never equal. So what could he possibly have meant by that ringing but ambiguous declaration: "All men are created equal"? Two things, possibly. One, although none of us are good, all of us are sacred (Glenn Tinder), that's the basis for thinking we are by nature kin.

Second, he may have come to see the meaning of those words through the experience of the slave who was his mistress. As is now widely acknowledged, the hands that wrote "all men are created equal" also stroked the breasts and caressed the thighs of a black woman named Sally Hennings. She bore him six children whom he never acknowledged as his own, but who were the only slaves freed by his will when he died -- the one request we think Sally Hennings made of her master. Thomas Jefferson could not have been insensitive to the flesh-and-blood woman in his arms. He had to know she was his equal in her desire for life, her longing for liberty, her passion for happiness.

In his book on the Declaration, my late friend Mortimer Adler said Jefferson realized that whatever things are really good for any human being are really good for all other human beings. The happy or good life is essentially the same for all: a satisfaction of the same needs inherent in human nature. A just society is grounded in that recognition. So Jefferson kept as a slave a woman whose nature he knew was equal to his. All Sally Hennings got from her long sufferance -- perhaps it was all she sought from what may have grown into a secret and unacknowledged love -- was that he let her children go. "Let my children go" -- one of the oldest of all petitions. It has long been the promise of America -- a broken promise, to be sure. But the idea took hold that we could fix what was broken so that our children would live a bountiful life. We could prevent the polarization between the very rich and the very poor that poisoned other societies. We could provide that each and every citizen would enjoy the basic necessities of life, a voice in the system of self-government, and a better chance for their children. We could preclude the vast divides that produced the turmoil and tyranny of the very countries from which so many of our families had fled.

We were going to do these things because we understood our dark side -- none of us is good -- but we also understood the other side -- all of us are sacred. From Jefferson forward we have grappled with these two notions in our collective head -- that we are worthy of the creator but that power corrupts and absolute power corrupts absolutely. Believing the one and knowing the other, we created a country where the winners didn't take all. Through a system of checks and balances we were going to maintain a safe, if shifting, equilibrium between wealth and commonwealth. We believed equitable access to public resources is the lifeblood of any democracy. So early on [in Jeff Madrick's description,] primary schooling was made free to all. States changed laws to protect debtors, often the relatively poor, against their rich creditors. Charters to establish corporations were open to most, if not all, white comers, rather than held for the elite. The government encouraged Americans to own their own piece of land, and even supported squatters' rights. The court challenged monopoly -- all in the name of we the people.

In my time we went to public schools. My brother made it to college on the GI bill. When I bought my first car for $450 I drove to a subsidized university on free public highways and stopped to rest in state-maintained public parks. This is what I mean by the commonwealth. Rudely recognized in its formative years, always subject to struggle, constantly vulnerable to reactionary counterattacks, the notion of America as a shared project has been the central engine of our national experience.

Until now. I don't have to tell you that a profound transformation is occurring in America: the balance between wealth and the commonwealth is being upended. By design. Deliberately. We have been subjected to what the Commonwealth Foundation calls "a fanatical drive to dismantle the political institutions, the legal and statutory canons, and the intellectual and cultural frameworks that have shaped public responsibility for social harms arising from the excesses of private power." From land, water and other natural resources, to media and the broadcast and digital spectrums, to scientific discovery and medical breakthroughs, and to politics itself, a broad range of the American commons is undergoing a powerful shift toward private and corporate control. And with little public debate. Indeed, what passes for 'political debate' in this country has become a cynical charade behind which the real business goes on -- the not-so-scrupulous business of getting and keeping power in order to divide up the spoils.

We could have seen this coming if we had followed the money. The veteran Washington reporter, Elizabeth Drew, says "the greatest change in Washington over the past 25 years -- in its culture, in the way it does business and the ever-burgeoning amount of business transactions that go on here -- has been in the preoccupation with money." Jeffrey Birnbaum, who covered Washington for nearly twenty years for the Wall Street Journal, put it more strongly: "[campaign cash] has flooded over the gunwales of the ship of state and threatens to sink the entire vessel. Political donations determine the course and speed of many government actions that deeply affect our daily lives." Politics is suffocating from the stranglehold of money. During his brief campaign in 2000, before he was ambushed by the dirty tricks of the religious right in South Carolina and big money from George W. Bush's wealthy elites, John McCain said elections today are nothing less than an "influence peddling scheme in which both parties compete to stay in office by selling the country to the highest bidder."

Small wonder that with the exception of people like John McCain and Russ Feingold, official Washington no longer finds anything wrong with a democracy dominated by the people with money. Hit the pause button here, and recall Roger Tamraz. He's the wealthy oilman who paid $300,000 to get a private meeting in the White House with President Clinton; he wanted help in securing a big pipeline in central Asia. This got him called before congressional hearings on the financial excesses of the 1996 campaign. If you watched the hearings on C-Span you heard him say he didn't think he had done anything out of the ordinary. When they pressed him he told the senators: "Look, when it comes to money and politics, you make the rules. I'm just playing by your rules." One senator then asked if Tamraz had registered and voted. And he was blunt in his reply: "No, senator, I think money's a bit more (important) than the vote."

So what does this come down to, practically?

Here is one accounting:

"When powerful interests shower Washington with millions in campaign contributions, they often get what they want. But it's ordinary citizens and firms that pay the price and most of them never see it coming. This is what happens if you don't contribute to their campaigns or spend generously on lobbying. You pick up a disproportionate share of America's tax bill. You pay higher prices for a broad range of products from peanuts to prescriptions. You pay taxes that others in a similar situation have been excused from paying. You're compelled to abide by laws while others are granted immunity from them. You must pay debts that you incur while others do not. You're barred from writing off on your tax returns some of the money spent on necessities while others deduct the cost of their entertainment. You must run your business by one set of rules, while the government creates another set for your competitors. In contrast, the fortunate few who contribute to the right politicians and hire the right lobbyists enjoy all the benefits of their special status. Make a bad business deal; the government bails them out. If they want to hire workers at below market wages, the government provides the means to do so. If they want more time to pay their debts, the government gives them an extension. If they want immunity from certain laws, the government gives it. If they want to ignore rules their competition must comply with, the government gives its approval. If they want to kill legislation that is intended for the public, it gets killed."

I'm not quoting from Karl Marx's Das Kapital or Mao's Little Red Book. I'm quoting Time magazine. Time's premier investigative journalists -- Donald Bartlett and James Steele -- concluded in a series last year that America now has "government for the few at the expense of the many." Economic inequality begets political inequality, and vice versa.

That's why the Stanleys and the Neumanns were turned off by politics. It's why we're losing the balance between wealth and the commonwealth. It's why we can't put things right. And it is the single most destructive force tearing at the soul of democracy. Hear the great justice Learned Hand on this: "If we are to keep our democracy, there must be one commandment: 'Thou shalt not ration justice.' " Learned Hand was a prophet of democracy. The rich have the right to buy more homes than anyone else. They have the right to buy more cars than anyone else, more gizmos than anyone else, more clothes and vacations than anyone else. But they do not have the right to buy more democracy than anyone else.

I know, I know: this sounds very much like a call for class war. But the class war was declared a generation ago, in a powerful paperback polemic by William Simon, who was soon to be Secretary of the Treasury. He called on the financial and business class, in effect, to take back the power and privileges they had lost in the depression and new deal. They got the message, and soon they began a stealthy class war against the rest of society and the principles of our democracy. They set out to trash the social contract, to cut their workforces and wages, to scour the globe in search of cheap labor, and to shred the social safety net that was supposed to protect people from hardships beyond their control. Business Week put it bluntly at the time: "Some people will obviously have to do with less....it will be a bitter pill for many Americans to swallow the idea of doing with less so that big business can have more."

The middle class and working poor are told that what's happening to them is the consequence of Adam Smith's "Invisible Hand." This is a lie. What's happening to them is the direct consequence of corporate activism, intellectual propaganda, the rise of a religious orthodoxy that in its hunger for government subsidies has made an idol of power, and a string of political decisions favoring the powerful and the privileged who bought the political system right out from under us.

To create the intellectual framework for this takeover of public policy they funded conservative think tanks -- The Heritage Foundation, the Hoover Institution, and the American Enterprise Institute -- that churned out study after study advocating their agenda.

To put political muscle behind these ideas they created a formidable political machine. One of the few journalists to cover the issues of class -- Thomas Edsall of The Washington Post -- wrote: "During the 1970s, business refined its ability to act as a class, submerging competitive instincts in favor of joint, cooperate action in the legislative area." Big business political action committees flooded the political arena with a deluge of dollars. And they built alliances with the religious right -- Jerry Falwell's Moral Majority and Pat Robertson's Christian Coalition -- who mounted a cultural war providing a smokescreen for the class war, hiding the economic plunder of the very people who were enlisted as foot soldiers in the cause of privilege.

In a book to be published this summer, Daniel Altman describes what he calls the "neo-economy -- a place without taxes, without a social safety net, where rich and poor live in different financial worlds -- and [said Altman] it's coming to America." He's a little late. It's here. Says Warren Buffett, the savviest investor of them all: "My class won."

Look at the spoils of victory:

Over the past three years, they've pushed through $2 trillion dollars in tax cuts -- almost all tilted towards the wealthiest people in the country.

Cuts in taxes on the largest incomes.

Cuts in taxes on investment income.

And cuts in taxes on huge inheritances.

More than half of the benefits are going to the wealthiest one percent. You could call it trickle-down economics, except that the only thing that trickled down was a sea of red ink in our state and local governments, forcing them to cut services for and raise taxes on middle class working America.

Now the Congressional Budget Office forecasts deficits totaling $2.75 trillion over the next ten years.

These deficits have been part of their strategy. Some of you will remember that Senator Daniel Patrick Moynihan tried to warn us 20 years ago, when he predicted that President Ronald Reagan's real strategy was to force the government to cut domestic social programs by fostering federal deficits of historic dimensions. Reagan's own budget director, David Stockman, admitted as such. Now the leading rightwing political strategist, Grover Norquist, says the goal is to "starve the beast" -- with trillions of dollars in deficits resulting from trillions of dollars in tax cuts, until the United States Government is so anemic and anorexic "it can be drowned in the bathtub."

There's no question about it: The corporate conservatives and their allies in the political and religious right are achieving a vast transformation of American life that only they understand because they are its advocates, its architects, and its beneficiaries. In creating the greatest economic inequality in the advanced world, they have saddled our nation, our states, and our cities and counties with structural deficits that will last until our children's children are ready for retirement, and they are systematically stripping government of all its functions except rewarding the rich and waging war.

And they are proud of what they have done to our economy and our society. If instead of practicing journalism I was writing for Saturday Night Live, I couldn't have made up the things that this crew have been saying.

The president's chief economic adviser says shipping technical and professional jobs overseas is good for the economy.

The president's Council of Economic Advisers report that hamburger chefs in fast food restaurants can be considered manufacturing workers.

The president's Federal Reserve Chairman says that the tax cuts may force cutbacks in social security - but hey, we should make the tax cuts permanent anyway.

The president's Labor Secretary says it doesn't matter if job growth has stalled because "the stock market is the ultimate arbiter."

You just can't make this stuff up. You have to hear it to believe it. This may be the first class war in history where the victims will die laughing.

But what they are doing to middle class and working Americans -- and to the workings of American democracy -- is no laughing matter. Go online and read the transcripts of Enron traders in the energy crisis four years ago, discussing how they were manipulating the California power market in telephone calls in which they gloat about ripping off "those poor grandmothers." Read how they talk about political contributions to politicians like "Kenny Boy" Lay's best friend George W. Bush. Go on line and read how Citigroup has been fined $70 Million for abuses in loans to low-income, high risk borrowers - the largest penalty ever imposed by the Federal Reserve. A few clicks later, you can find the story of how a subsidiary of the corporate computer giant NEC has been fined over $20 million after pleading guilty to corruption in a federal plan to bring Internet access to poor schools and libraries. And this, the story says, is just one piece of a nationwide scheme to rip off the government and the poor.

Let's face the reality: If ripping off the public trust; if distributing tax breaks to the wealthy at the expense of the poor; if driving the country into deficits deliberately to starve social benefits; if requiring states to balance their budgets on the backs of the poor; if squeezing the wages of workers until the labor force resembles a nation of serfs -- if this isn't class war, what is?

It's un-American. It's unpatriotic. And it's wrong.

But I don't need to tell you this. You wouldn't be here if you didn't know it. Your presence at this gathering confirms that while an America with liberty and justice for all is a broken promise, it is not a lost cause. Once upon a time I thought the mass media -- my industry -- would help mend this broken promise and save this cause. After all, the sight of police dogs attacking peaceful demonstrators forced America to recognize the reality of racial injustice. The sight of carnage in Vietnam forced us to recognize the war was unwinnable. The sight of terrorists striking the World Trade Center woke us from a long slumber of denial and distraction. I thought the mass media might awaken Americans to the reality that this ideology of winner-take-all is working against them and not for them. I was wrong. With honorable exceptions, we can't count on the mass media.

What we need is a mass movement of people like you. Get mad, yes -- there's plenty to be mad about. Then get organized and get busy. This is the fight of our lives.

- Bill Moyers, New York University, June 3, 2004b\

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"A NATION OF SERFS"

"In a feudal state, power is held by those who own the greatest wealth. At its essential core, feudalism could be defined as "government of, by, and for the rich."

/"...if squeezing the wages of workers until the labor force resembles
 a nation of serfs --
- if this isn't class war, what is?"
.
- Bill Moyers (ABOVE)
__________________________________________________________________

(M.O.W. editorial insert)
/
Dooh Nibor Economics 
    
By Paul Krugman 
    New York times
    Tuesday 01 June 2004
  

Go to Original

    Last week The Washington Post got hold of an Office of Management and Budget memo that directed federal agencies to prepare for post-election cuts in programs that George Bush has been touting on the campaign trail. These include nutrition for women, infants and children; Head Start; and homeland security. The numbers match those on a computer printout leaked earlier this year - one that administration officials claimed did not reflect policy.

    Beyond the routine mendacity, the case of the leaked memo points us to a larger truth: whatever they may say in public, administration officials know that sustaining Mr. Bush's tax cuts will require large cuts in popular government programs. And for the vast majority of Americans, the losses from these cuts will outweigh any gains from lower taxes.

    It has long been clear that the Bush administration's claim that it can simultaneously pursue war, large tax cuts and a "compassionate" agenda doesn't add up. Now we have direct confirmation that the White House is engaged in bait and switch, that it intends to pursue a not at all compassionate agenda after this year's election.

    That agenda is to impose Dooh Nibor economics - Robin Hood in reverse. The end result of current policies will be a large-scale transfer of income from the middle class to the very affluent, in which about 80 percent of the population will lose and the bulk of the gains will go to people with incomes of more than $200,000 per year.

    I can't back that assertion with official numbers, because under Mr. Bush the Treasury Department has stopped releasing information on the distribution of tax cuts by income level. Estimates by the Urban Institute-Brookings Institution Tax Policy Center, which now provides the numbers the administration doesn't want you to know, reveal why. This year, the average tax reduction per family due to Bush-era cuts was $1,448. But this average reflects huge cuts for a few affluent families, with most families receiving much less (which helps explain why most people, according to polls, don't believe their taxes have been cut). In fact, the 257,000 taxpayers with incomes of more than $1 million received a bigger combined tax cut than the 85 million taxpayers who make up the bottom 60 percent of the population.

     Still, won't most families gain something? No - because the tax cuts must eventually be offset with spending cuts.

    Three years ago George Bush claimed that he was cutting taxes to return a budget surplus to the public. Instead, he presided over a move to huge deficits. As a result, the modest tax cuts received by the great majority of Americans are, in a fundamental sense, fraudulent. It's as if someone expected gratitude for giving you a gift, when he actually bought it using your credit card.

    The administration has not, of course, explained how it intends to pay the bill. But unless taxes are increased again, the answer will have to be severe program cuts, which will fall mainly on Social Security, Medicare and Medicaid - because that's where the bulk of the money is.

    For most families, the losses from these cuts will far outweigh any gain from lower taxes. My back-of-the-envelope calculation suggests that 80 percent of all families will end up worse off; the Center on Budget and Policy Priorities will soon come out with a more careful, detailed analysis that arrives at a similar conclusion. And the only really big beneficiaries will be the wealthiest few percent of the population.

    Does Mr. Bush understand that the end result of his policies will be to make most Americans worse off, while enriching the already affluent? Who knows? But the ideologues and political operatives behind his agenda know exactly what they're doing.

    Of course, voters would never support this agenda if they understood it. That's why dishonesty - as illustrated by the administration's consistent reliance on phony accounting, and now by the business with the budget cut memo - is such a central feature of the White House political strategy.

     Right now, it seems that the 2004 election will be a referendum on Mr. Bush's calamitous foreign policy. But something else is at stake: whether he and his party can lock in the unassailable political position they need to proceed with their pro-rich, anti-middle-class economic strategy. And no, I'm not engaging in class warfare. They are.

Copyright 2004 The New York Times Company (In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

______________________________

Columnist Biography: Paul Krugman

"Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University.

Mr. Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

Mr. Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. His professional reputation rests largely on work in international trade and finance; he is one of the founders of the "new trade theory," a major rethinking of the theory of international trade. In recognition of that work, in 1991 the American Economic Association awarded him its John Bates Clark medal, a prize given every two years to "that economist under forty who is adjudged to have made a significant contribution to economic knowledge." Mr. Krugman's current academic research is focused on economic and currency crises.

At the same time, Mr. Krugman has written extensively for a broader public audience. Some of his recent articles on economic issues, originally published in Foreign Affairs, Harvard Business Review, Scientific American and other journals, are reprinted in Pop Internationalism and The Accidental Theorist."

_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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/
Healthcare Reveals Real "Conservative" Agenda - 
Drown Democracy In A Bathtub 
/
by Thom Hartmann
CommonDreams.org
February 25, 2003 

  

They're hoping Americans won't notice.

Indeed, in late February a "senior administration official" presented The New York Times with a masterpiece of obfuscation and avoidance of responsibility. Speaking of the administration's plans to push users of Medicare and Medicaid into the hands of for-profit corporations, this "official" said, "We're looking at two programs that have worked, that have provided health coverage to people who need it, and we want to help them work better."

Ted Kennedy was more straightforward in his objection to the Bush scheme. "Medicare is a firm commitment to every elderly American," Kennedy said, "not a profit center for H.M.O.s and other private insurance plans."

Robin Toner and Robert Pear of The New York Times wrote in an understated tone that, "The magnitude of the Bush proposals is only gradually dawning on members of Congress."

It's also dawning on mainstream Americans.

When you look closely, you discover that what so many are calling the "conservative agenda" would be shocking and alien to historic conservatives like Republicans Teddy Roosevelt, Dwight Eisenhower, and Barry Goldwater. It really has nothing to do with conservative or liberal, left or right, war or peace. It doesn't care about abortion, prayer, or flags, although these are useful props to bring in fringe groups to "fill the big tent." It's not even about liberty, freedom, or prosperity.

Today's so-called "conservative agenda" is, very simply, about ownership.

Specifically, ownership of the assets of the United States of America - things previously owned by "We, The People." And, ultimately, ownership of the United States government itself.

Here's how it works.

In a democracy there are some things we all own together.

Often referred to as "the commons," they include the necessities and commonalities of life: our air, water, septic systems, transportation routes, educational systems, radio and TV spectrums, and, in every developed nation in the world except America, the nation's health care system.

But the most important of the commons in a democracy is the government itself.

The Founders' idea of a democratic republic was to create a common institution owned by its own citizens, answerable to its own citizens, and authorized to exist and continue existing solely "by the consent of the governed."

And make no mistake - it's democracy itself that is today at risk.

As the prescient Chief Justice of Wisconsin's Supreme Court, Edward G. Ryan said ominously in his 1873 speech to the graduating class of the University of Wisconsin Law School, "[There] is looming up a new and dark power... the enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economical conquests only, but for political power... The question will arise and arise in your day, though perhaps not fully in mine, which shall rule - wealth or man; which shall lead - money or intellect; who shall fill public stations - educated and patriotic freemen, or the feudal serfs of corporate capital...."

We're entering a new and unknown, but hauntingly familiar, era. The Bush plans to privatize parts of Medicare are just one thread in the larger fabric of this "new world order."

It's new because it represents a virtual abandonment of the egalitarian and democratic archetypes the founders of the United States put into place in our Constitution and Bill of Rights. And it's hauntingly familiar because it resembles in many ways one of the most stable and long-term of all social structures to have ever established itself in the modern history of civilization: feudalism.

Feudalism doesn't refer to a point in time or history when streets were filled with mud and people lived as peasants (although that was sometimes the case). Instead, it refers to an economic and political system, just like "democracy" or "communism" or "socialism" or "theocracy."

In a feudal state, power is held by those who own the greatest wealth. At its essential core, feudalism could be defined as "government of, by, and for the rich."

Marc Bloch is one of the great 20th Century scholars of the feudal history of Europe. In his book Feudal Society he points out that feudalism is a fracturing of one authoritarian hierarchical structure into another: the state disintegrates, as unelected but wealthy power brokers take over.

In almost every case, both with European feudalism and feudalism in China, South America, and Japan, Bloch notes that "feudalism coincided with a profound weakening of the State, particularly in its protective capacity." Given most accepted definitions of feudalism, feudal societies don't emerge in civilizations with a strong social safety net and a proactive government.

There is a slight debate, in that some scholars like Benjamin Guérard say feudalism must be land-based, whereas Jacques Flach and others suggest the structure of power and obligation is the key. But the consensus is that when the wealthiest in a society take over government and then weaken it so it no longer can represent the interests of the people, the transition has begun into a new era of feudalism. "European feudalism should therefore be seen as the outcome of the violent dissolution of older societies," Bloch says.

Whether the power and wealth agent that takes the place of government is a local baron, lord, king, or corporation, if it has greater power in the lives of individuals than does a representative government, the culture has dissolved into feudalism. Bluntly, Bloch states: "The feudal system meant the rigorous economic subjection of a host of humble folk to a few powerful men."

This doesn't mean the end of government, but, instead the subordination of government to the interests of the feudal lords. Interestingly, even in Feudal Europe, Bloch points out, "The concept of the State never absolutely disappeared, and where it retained the most vitality, men continued to call themselves 'free'..."

The transition from a governmental society to a feudal one is marked by the rapid accumulation of power and wealth in a few hands, with a corresponding reduction in the power and responsibilities of government. Once the rich and powerful gain control of the government, they turn it upon itself, usually first eliminating its taxation process as it applies to themselves. Says Bloch: "Nobles need not pay taille [taxes]."

Bringing this to today, consider that in 1982, just before the Reagan-Bush "supply side" tax cut, the average wealth of the Forbes 400 was $200 million. Just four years later, their average wealth was $500 million each, aided by massive tax cuts. Today, those 400 people own wealth equivalent to one-eighth of the entire gross domestic product (GDP) of the United States.

And those who would take over the government of the United States have a specific plan for how to do it. It begins with tax cuts, which are then followed by handing government-mandated services over to private corporations.

Tax cuts are not just about kowtowing to the Nobles of the new conservative feudal state. Although that happens, the most important function of tax cuts is to deprive government of oxygen.

The result is that the government must then turn to private corporations - the new feudal lords - to administer the commons. This shift of the commons ranges from the commons of health care for the elderly to the commons of the vote, as we're seeing now with private corporations linked to hard-right Republicans taking over the election systems of states like Georgia, Florida, and Texas.

According to hard-right Republicans, killing off government to make way for corporate rule is truly at the core of the so-called "conservative agenda." For example, the lead cheerleader for Bush's tax-cutting fervor is a man named Grover Norquist, well known to every politician in Washington.

"I don't want to abolish government," Norquist told National Public Radio's Mara Liasson in a May 25, 2001 Morning Edition interview. "I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."

At first, gullible politicians and voters thought drowning a democratic government in the bathtub was, at worse, just another way for big business to make more money. It might even make some of the functions of government more efficient, they thought, even though any benefits of that efficiency would be turned over to stockholders and CEOs rather than the broader public that uses the commons.

Take over power plants and water systems built with tax dollars, privatize hospitals built with tax dollars, run private prisons with tax dollars, auction off the airwaves to for-profit enterprises. It built empires, like Bill Frist's vast hospital fortune, and made wealth more of a politically defining factor than party affiliation.

It is corporatism, to use Mussolini's word (which he later renamed "fascism"): "a merging of corporate and state interests." It's simply the modern version of feudalism.

The greatest force promoting corporatism in America is the mistaken interpretation of the court reporter's headnotes in the 1886 Santa Clara County v. Southern Pacific Railroad case before the Supreme Court. That mistaken interpretation granted human rights to corporations, thus enabling them to use "free speech" to buy politicians and thus strike down laws against corporate political activity.

But there's a movement growing across America to rescue democracy from the conservatives' bathtub.

Communities have passed resolutions and laws denying corporate personhood, and cases like Kasky v. Nike are showing up before the Supreme Court that may bring these questions into the open. And, perhaps most important, the naked corporate grab of government in an administration made almost entirely of corporate CEOs, is being outed.

America's largest progressive talk radio network, broadcast from Alaska to Florida and available on the web at www.ieamericaradio.com, runs 12 hours of programming a day that openly discusses these issues, and regularly attacks "the Bush Crime Family." Radio stations across the nation are starting to seek out progressive programming, with AnShell Media developing a new progressive talk radio network, and even the right-wing bastion Fox announcing this week that they've syndicated the moderate democrat Alan Colmes with a talk show in a handful of the largest of America's radio markets.

Unions - the traditional defenders of working-class people - are becoming politically active and pointing out that all people who draw a paycheck, be they blue- or white-collar workers, are suffering from the new American feudalism. Check out www.uaw.org and www.aflcio.org for an extraordinary insight into how clear America's unions have become in their understanding of the true neo-conservative agenda, and how it can be challenged.

Hopefully one day soon such open plain speaking may even reach the website of the party founded by Thomas Jefferson, although for now the activist-run www.democrats.com site far outstrips the Party's www.democrats.org for clarity, purpose, and political momentum.

Perhaps, as Leonard Cohen sings, "Democracy is coming to the USA." If so, while the opportunity is still available to us, this nation's citizens must listen, join, share, read, campaign, and enlighten others. It will be no small effort to roll back the damage done by the so-called conservative feudalists, but if we are to bring democracy back to the land of its modern rebirth we must awaken, step forth, and speak out.

Thom Hartmann is the author of "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights." www.unequalprotection.com and www.thomhartmann.com. This article is copyright by Thom Hartmann, but permission is granted for reprint in print, email, or web media so long as this credit is attached.

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"No public interest is anything other or nobler than 
a massed accumulation of private interests."
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- Mark Twain
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(M.O.W. editorial insert)
/
Mr. Bush's Stealthy Tax Increase 
   
The New York Times | Editorial
     Sunday 13 March 2005
  

    President Bush is presiding over a big middle-class tax hike.

    As recently as 2000, only about one million taxpayers owed the alternative minimum tax, created by a provision in the federal tax code that is supposed to prevent multimillionaires from using loopholes to avoid paying their fair share. But by the time Americans file their 2005 taxes, some 3 million taxpayers will owe the alternative tax and by 2010, nearly 30 million taxpayers will be hit - among them, a staggering 94 percent of married filers who have children and make $75,000 to $100,000.

    Big families in high-tax states - New York, New Jersey, California and Massachusetts - will bear the heaviest burden, largely because the alternative tax increasingly disallows write-offs for dependents, state income taxes and local property taxes. On average, by 2010, people who make under $100,000 and owe the alternative tax will pay an additional $1,321 in federal income taxes, while alternative tax payers who make between $100,000 and $200,000 will owe an additional $2,592.

    Meanwhile, and most outrageous, only 35 percent of taxpayers who earn $1 million or more will owe the alternative tax.

    Why does the alternative tax increasingly afflict middle-rung taxpayers for whom it was never intended, while largely ignoring the highest-end taxpayers it is meant for?

    First, the alternative tax is not adjusted for inflation, so over time, more and more middle-income taxpayers find themselves owing it.

    Second, and crucially important, is the interplay of the alternative tax and Mr. Bush's first-term tax cuts. When the tax cuts were enacted, no long-term corresponding changes were made to the alternative tax system - even though the administration was well aware that was a recipe for disaster. Not only will many families that thought they were in for lower income taxes wind up feeling shortchanged, some will find that the Bush tax cuts have done nothing at all to cut their taxes.

    Here's why: The alternative tax applies to people whose income tax bills are low relative to their income. So as tax cuts reduce the liability on a filer's Form 1040, the alternative tax kicks in. In effect, it claws back all or part of the supposed savings from the Bush tax cuts. By 2010, the Bush tax cuts alone will cause an additional 17 million taxpayers to owe the alternative tax. By 2014, assuming the Bush tax cuts are made permanent, 40 million taxpayers will owe the alternative tax, nearly half of whom would never have faced it but for the tax cuts.

    Meanwhile, the people who should be paying the alternative tax do not. Mr. Bush's administration, more than any other, has bestowed tax breaks on wealthy investors in the form of superlow rates on capital gains and dividends. But the alternative tax system - which regards deductions for property taxes or state income taxes as a kind of tax shelter - does not recognize this preferential treatment of investment income. That is a huge loophole. The alternative tax, whose very purpose is to prevent excessive sheltering, ignores the biggest tax breaks of all: special, low rates on capital gains and dividends that allow investors to avoid paying tens of billions of dollars in taxes every year.

    Ever since the first round of Bush tax cuts were enacted, Congress has passed temporary relief measures to keep most middle-income taxpayers from owing the alternative tax, but the problem is becoming too big, too fast, for stopgaps to keep working. Mr. Bush, for his part, says that he wants to shield the middle class from the alternative tax and that his tax reform commission will recommend a solution when it makes its report in July.

    But Mr. Bush needs the alternative tax - he relies on its projected revenue to mask the debilitating cost of making his tax cuts permanent. Congressional estimates say that extending them permanently will cost $281 billion in 2014. But that estimate assumes that nothing will be done to prevent the alternative tax from further burdening the middle class. If the middle class is fully protected, the cost of extending the tax cuts will mushroom to $356 billion - 27 percent higher than the official estimate. The federal budget deficit would explode.

    The obvious answer is to restore the alternative tax to its true antisheltering purpose, by making inflation adjustments that will exempt the middle class once and for all and by fully taxing capital gains and dividends under the alternative system. But Congress and the administration are currently heading in precisely the wrong direction. The Bush tax breaks for investment income are scheduled to expire in 2008, but both the president and Congressional leaders are calling for extending them, at least through 2010, while proposing no corresponding long-term change in the alternative tax.

    Bush administration officials and their antitax allies seem to believe that if taxpayers become angry enough at having to pay the alternative tax, they will throw their support behind any tax reform plan the administration puts forth. That is fomenting a crisis in order to appear to solve it. Is it too much to ask not to put the country through that kind of cynical exercise yet again?

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The Covert Campaign To Rig Our Tax System to Benefit The Super Rich
- And Cheat Everybody Else
  

We speak with Pulitizer Prize-winning New York Times reporter David Cay Johnston about his new book Perfectly Legal. Johnston argues that most Americans are "being duped into supplementing the incomes and extravagant lifestyles of the rich and powerful."
The income gap in the United States is greater than many imagine -- the top 29,000 Americans have as much income as the bottom 96 million. And in recent years tax burden for the richest Americans --- especially corporations -- has been falling sharply while everyone else's has risen.

A study by the General Accounting Office found that almost two-thirds of America's corporations paid no federal income taxes during the late 1990's, when corporate profits were soaring. Nine out of 10 companies paid less than the equivalent of 5 percent of their total income.

A new book by Pulitizer Prize winning New York Times reporter David Cay Johnston argues that most Americans are "being duped into supplementing the incomes and extravagant lifestyles of the rich and powerful."

The book is titled "Perfectly Legal: The Covert Campaign To Rig Our Tax System to Benefit The Super Rich -- And Cheat Everybody Else." Last month Johnston was awarded top honors at the 2003 Investigative Reporters and Editors Awards for the book.

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"The Republicans used to be deeply concerned for the middle class and small business.
Today's Republican leadership, while not solely accountable for the loss of American jobs, encourages
 it with its tax code and heads us in the direction of a society of very rich and very poor."
//
- John Eisenhower, lifelong Republican and son of Dwight D. Eisenhower
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"Last week Mr. Greenspan warned of the dangers posed by budget deficits. 
But even though the main cause of deficits is plunging revenue - the federal government's tax take is now 
at its lowest level as a share of the economy since 1950 -- he opposes any effort to restore recent revenue losses. 
Instead, he supports the Bush administration's plan to make its tax cuts permanent, 
and calls for cuts in Social Security benefits."

/"Should any political party attempt to abolish social security, unemployment insurance, and 
eliminate labor laws and farm programs, you would not hear of that party again in our political history.

 There is a tiny splinter group, of course, that believes you can do these things.
 Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, 
and an occasional politician or business man from other areas. 
Their number is negligible and they are stupid."
//

/
- President Dwight D. Eisenhower, from a letter Eisenhower wrote to his brother Edgar on November 8, 1954
//
  

OILMAN  H.L HUNT, IN 1963 THE WEALTHIEST MAN IN AMERICA (apparently, it wasn't enough).
CLICK THE PHOTO FOR SOME VERY INTERESTING INFORMATI0N ABOUT MR. HUNT'S 'BACKGROUND'.
?
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Maestro of Chutzpah

By PAUL KRUGMAN
NEW YORK TIMES
March 02, 2004

"...The point, of course, is that if anyone had tried to sell this package honestly -
- "Let's raise taxes and cut benefits for working families so we can give big tax cuts to the rich!" - 
voters would have been outraged. So the class warriors of the right engaged in bait-and-switch."
  

Last week Mr. Greenspan warned of the dangers posed by budget deficits. But even though the main cause of deficits is plunging revenue - the federal government's tax take is now at its lowest level as a share of the economy since 1950 - he opposes any effort to restore recent revenue losses. Instead, he supports the Bush administration's plan to make its tax cuts permanent, and calls for cuts in Social Security benefits.

Yet three years ago Mr. Greenspan urged Congress to cut taxes, warning that otherwise the federal government would run excessive surpluses. He assured Congress that those tax cuts would not endanger future Social Security benefits. And last year he declined to stand in the way of another round of deficit-creating tax cuts.

But wait - it gets worse.

You see, although the rest of the government is running huge deficits - and never did run much of a surplus - the Social Security system is currently taking in much more money than it spends. Thanks to those surpluses, the program is fully financed at least through 2042. The cost of securing the program's future for many decades after that would be modest - a small fraction of the revenue that will be lost if the Bush tax cuts are made permanent.

And the reason Social Security is in fairly good shape is that during the 1980's the Greenspan commission persuaded Congress to increase the payroll tax, which supports the program.

The payroll tax is regressive: it falls much more heavily on middle- and lower-income families than it does on the rich. In fact, according to Congressional Budget Office estimates, families near the middle of the income distribution pay almost twice as much in payroll taxes as in income taxes. Yet people were willing to accept a regressive tax increase to sustain Social Security.

Now the joke's on them. Mr. Greenspan pushed through an increase in taxes on working Americans, generating a Social Security surplus. Then he used that surplus to argue for tax cuts that deliver very little relief to most people, but are worth a lot to those making more than $300,000 a year. And now that those tax cuts have contributed to a soaring deficit, he wants to cut Social Security benefits.

The point, of course, is that if anyone had tried to sell this package honestly - "Let's raise taxes and cut benefits for working families so we can give big tax cuts to the rich!" - voters would have been outraged. So the class warriors of the right engaged in bait-and-switch.

There are three lessons in this tale.

First, "starving the beast" is no longer a hypothetical scenario - it's happening as we speak. For decades, conservatives have sought tax cuts, not because they're affordable, but because they aren't. Tax cuts lead to budget deficits, and deficits offer an excuse to squeeze government spending.

Second, squeezing spending doesn't mean cutting back on wasteful programs nobody wants. Social Security and Medicare are the targets because that's where the money is. We might add that ideologues on the right have never given up on their hope of doing away with Social Security altogether. If Mr. Bush wins in November, we can be sure that they will move forward on privatization - the creation of personal retirement accounts. These will be sold as a way to "save" Social Security (from a nonexistent crisis), but will, in fact, undermine its finances. And that, of course, is the point.

Finally, the right-wing corruption of our government system - the partisan takeover of institutions that are supposed to be nonpolitical - continues, and even extends to the Federal Reserve.

The Bush White House has made it clear that it will destroy the careers of scientists, budget experts, intelligence operatives and even military officers who don't toe the line. But Mr. Greenspan should have been immune to such pressures, and he should have understood that the peculiarity of his position - as an unelected official who wields immense power - carries with it an obligation to stand above the fray. By using his office to promote a partisan agenda, he has betrayed his institution, and the nation.

Copyright 2004 The New York Times Company (In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

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US Treasury "Missing" $Trillions
From the Pentagon and HUD 
     

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- John W. Dean: An Early Assessment by Presidential Scholars of George W. Bush's Presidency: Part One,  
Findlaw, November 7, 2003 http://writ.news.findlaw.com/dean/20031107.html
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/
Greenspan Testimony Highlights 
Bush Plan for Deliberate Federal Bankruptcy 

  By Michael Meurer 
    t r u t h o u t | Perspective
02 March 2004
dvcvvSvv
  

    During his February 25 testimony before the House Budget Committee, Federal Reserve Chairman Alan Greenspan generated sensational national headlines by recommending that President Bush's $1.5 trillion in tax cuts be made permanent while Social Security and Medicare benefits be dramatically cut to achieve long term deficit reduction and a balanced budget.

     In spite of the media furor and across the board condemnation by the remaining Democratic presidential candidates, there should be no reason for surprise at Greenspan's remarks. In his capacity as shill for the Bush administration, the Chairman's recommendations make perfect sense, as long as one is not foolish enough to believe the window dressing about a long term balanced budget. Mr. Greenspan is laying the groundwork for a second Bush administration, not a balanced budget. His remarks, and most of the economic policies of the Bush administration, can only be understood against the backdrop of the little remarked right wing agenda of deliberate federal bankruptcy.

     From the first months of the Bush administration, when their initial breathtaking tax cuts were presented to Congress, it has been obvious that the explicit goal of this administration is to bankrupt the federal government to justify a sweeping program of privatization. Pursuing federal bankruptcy is a deliberate policy.

     This administration's pursuit of bankruptcy as deliberate policy had to be extraordinarily bold from day one because public programs such as Social Security were so extraordinarily solvent into the distant future, and the underlying strength and diversity of the U.S. economy was sufficient to keep them that way if spending priorities were not radically altered. The events of 9/11 provided the perfect cover for pursuing federal bankruptcy in the guise of an open ended war on terror.

     We know that the constituency for the Bush economic program consists of the military-industrial complex and the wealthy. The Bush administration's policies of massive defense spending and unprecedented tax cuts for upper income brackets reward both constituencies, while the short term economic lift from more than $450 billion in defense spending (dubbed "Military Keynesianism" by Robert Pollin of the University of Massachusetts at Amherst and others) is part of a conscious election year strategy to give at least the appearance of economic recovery. But the longer term goal of these policies, cutting revenues while increasing spending into the indefinite future, is still federal insolvency.

     A massive federal deficit, it is hoped, will justify to the public the wholesale privatization of social security, medicare, prisons, schools, water, the Federal Aviation Administration, Amtrak, welfare services, public power utilities, the federal postal service, etc., etc., etc. Visit the websites of any of the major right wing think tanks from which this administration has drawn its highest officials, and you will find entire sections of archived documents and books arguing the case for privatization of nearly the entire public sector.

     From the American Enterprise Institute to the Heritage Foundation, from the Hoover Institution to the Cato Institute to the Reason Foundation, privatization has been a prime objective of the right for the past 25 years. The National Center for Policy Analysis (NCPA) even provides a handy list of potential targets for privatization.

     There are plenty of examples of the Bush administration's attempts to push privatization, such as their effort to change federal funding rules for public water utilities, making such federal funding contingent upon proof that the utilities each have a privatization plan in place. Amtrak, Social Security and public schools are explicitly in their sights. Education factories such as Edison Schools are the preferred Republican solution to education.

     The public, so far, is resistant to an explicit agenda of mass privatization. But if Bush and his corporate backers were to be given a second term, pursuit of this privatization agenda would be unfettered, with the bulging Social Security trust fund at the top of the list among prospective candidate programs. That is what Mr. Greenspan is really signaling with his Congressional testimony in favor of permanent tax cuts today. The pursuit of federal insolvency increases the financial pressure on all elements of the public sector, making the argument for privatization theoretically more compelling. Indeed, Bush and company would read their election to a second term as a tacit mandate for their privatization agenda, and the consequences for the commonweal would be devastating.

     Only Rep. Dennis Kucinich and former Vermont Governor Howard Dean have talked explicitly about the Republican privatization agenda in this election year. Dean has noted that the Bush economic model for the U.S. is Argentina, although the sophistication of that analogy is lost on the average voter. Kucinich has talked about the dangers of privatizing water.

     Privatization deserves to be front and center in this country's political debate, and privatization's history of miserable failure needs to be placed squarely on the table in plain language for the electorate to consider. The history of failed privatization schemes includes doomed water privatization projects in South America and the U.S. (Atlanta is the poster child), rail privatization in Britain, and school and prison privatization in the U.S.

     The Bush administration's pursuit of federal bankruptcy on behalf of their largest corporate sponsors, who will be the primary beneficiaries of privatization, represents an all out assault on the idea that the federal government should represent the commonweal and act as a wise custodian of our collective resources. We see instead a vision of a global battlefield where scarce resources go to the strongest and to those who already have. Mr. Greenspan's comments today tell us that this world view extends to the domestic front and will continue and accelerate in a second Bush administration.

     We would do well to heed the underlying message and put an end to the Bush administration's Imperial misadventures abroad and fiscal malfeasance at home.

  ------------------

   Michael Meurer owns a communications firm in Los Angeles serving clients ranging from the Center for Law in the Public Interest to Environmental Defense.

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/
  

  Shifty Tax Cuts
  By Sean Gonsalves
  AlterNet
April 21, 2004

  

  Little Tommy had just caught a rabbit. On his way home, walking down a dusty road carrying the furry, squirming little creature he tried to console his captured carrot-eater.

  "Mistah Rabbit," he said. "Pretty li'l rabbit, sweet li'l rabbit, why are you wiggling so much. I ain't gonna do nothin' but knock you upside your head an' skin an' cook ya."

  Attention: my dear rabbit readers, analysts at United for a Fair Economy have just released a new report called "Shifty Tax Cuts: How They Move the Tax Burden off the Rich and onto Everyone Else."

  Here are some of the key findings in the report. (Go to http://FairEconomy.org/ press/2004/ShiftyTaxCuts_pr.html to see the full report).

  * For fiscal years 2002-2004, state governments filled approximately $200 billion in budget gaps by raising state taxes and fees and by cutting services. And during those same years, newly enacted federal tax cuts delivered about as much money ­ $197.3 billion ­ in new tax breaks for the wealthiest one percent of Americans (households making more than $337,000 a year).

  "Had that money instead been directed to state fiscal aid, it could have prevented virtually all recent tax hikes and service cuts at the state level, which fall hardest on low- and middle-income Americans," write the report's authors.

  * The choice to send nearly $200 billion to the top one percent rather than to state governments underscores just one way the federal tax cuts of 2001 and 2003 are actually "tax shifts," not tax cuts, for the vast majority of Americans.

  * Between 2000 and 2003, the United States saw a federal-to-state tax shift of historic magnitude: the share of the total tax burden borne at the state and local level jumped 15 percent.

  "This is the largest such shift in the tax burden since the period 1947-1950. This shift is making the tax system more regressive."

  Amazingly, in 2002, Americans in the bottom 20 percent of households paid 11.4 percent of their income in state and local taxes, while those in the top 1 percent paid only 5.2 percent of their income in state and local taxes ­ less than half the rate of the poorest fifth.

  * Since 1962, the share of total federal receipts collected from the regressive payroll tax, which collects proportionately more from low-income workers than high-income workers, has risen from 17 percent of total receipts to 40 percent ­ an increase of 135 percent.

  Meanwhile, the total share supplied by progressive income and corporate taxes has dropped from 63 percent of total receipts to 52 percent, which is a decline of 17 percent.

  * Between 1980 and now, the main tax on wage income ­ the payroll tax ­ has jumped 25 percent.

  In the same period, top tax rates on investment income and large inheritances have been cut between 31 percent and 79 percent. "Taxes on wealth are falling fast with shrinking taxes on capital gains, dividends and estate taxes." Oh, it gets better.

  * Since 1962, the share of federal revenues contributed by corporations has declined by two-thirds, while the share contributed by individuals has risen 17 percent.

  * Current tax policies are fueling the national debt, imposing an average $13,000 in additional debt on each man, woman and child in America between 2002 and 2007 -or more than $52,000 in added debt per family of four.

  * During the summer of 2003, millions of parents received $400-per-child checks from the IRS ­ an advance payment for the expanded federal child tax credit. But, at the same time, many of those same parents saw their local and state taxes increase.

  Some will consider this a propaganda piece encouraging class warfare. Call it what you want.

  As billionaire Warren Buffet points out, "If class warfare is being waged in America, my class is clearly winning."

  Let them eat rabbit!

________________________________

  Sean Gonsalves is a Cape Cod Times staff writer and a syndicated columnist. Call him at 508-775-1200, ext. 719, or e-mail him at sgonsalves@capecodonline.com

© : t r u t h o u t 2004

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//
"..Bush gazed around the diamond-studded $800-a-plate crowd and commented on the wealth on display.  
"This is an impressive crowd -- the haves, and the have-mores," quipped the GOP standard-bearer.
 "Some people call you the elites; I call you my base."
/
 - George W. Bush, October 20, 2000
/
"We don't pay taxes.
 Only the little people pay taxes"
/
- Leona Helmsley 
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Bush Tax Cuts = Tax Shifts

Press Release from
 United for a Fair Economy

April 7, 2004 

  

DOWNLOAD THE REPORT HERE: Shifty Tax Cuts

BOSTON - A new report, entitled "Shifty Tax Cuts: How They Move the Tax Burden off the Rich and onto Everyone Else," from United for a Fair Economy (UFE) indicates that between 2002 and 2004, the Bush tax cuts to the top 1% of US income earners redirected billions of dollars in revenue that could have eliminated virtually all of the budget shortfalls in the states.

"Congress had the option to send aid to the states to prevent $200 billion worth of service cuts and regressive tax increases," said Chris Hartman, UFE's research director. "Instead, they gave tax breaks totaling roughly the same amount to multi-millionaires and the rest of the top 1%."

The report identifies five main areas of shifting tax burden:

FEDERAL TO STATE - a 15% shift in tax burden between 2000 and 2003

PROGRESSIVE TO REGRESSIVE - at the federal level, a 17% decline in the share of revenue from progressive taxes and a 135% increase in the share of revenue from regressive taxes since 1962

WEALTH TO WORK - A tax cut on unearned income - such as inheritance or investment - of between 31% and 79%, but a tax hike on work income of 25% since 1980

CORPORATIONS TO INDIVIDUALS - a 67% drop in the share of federal revenues contributed by corporations and a 17% rise in individuals' share

CURRENT TAXPAYERS TO FUTURE GENERATIONS - record deficits that shift the tax burden to our children and grandchildren

"When President Bush and Congress trumpet, 'Here's a tax cut', we say, 'Taxpayer beware!' ", said Chuck Collins, United for a Fair Economy co-founder. "Unless you are super-rich, it's a tax SHIFT, not a cut.  Non-wealthy taxpayers will pay for these tax cuts with increased state and local taxes or cuts in public services."

"Between 2002 and 2004, a full $197 billion in new tax breaks went to the top 1% of American taxpayers," Hartman commented.  "This is money that has disappeared into the pockets of the very wealthy, making it unavailable to solve ongoing budget crises at the state and local levels."

"I got a rebate check last summer for $400," said Collins. "Then my eight-year-old's public school asked me to contribute money to replace worn-out chairs for the students.  At the same time, I found out they laid off the librarian because of budget cuts.  What good is a $400 tax cut when parents have to cough up additional money for chairs and books or else see their children go without?"

The report concludes that the total federal, state and local tax burden has become increasingly the responsibility of middle-and low-income families in recent decades, and that revenues being generated by taxes are not sufficient to pay for existing public services. Work in particular is being taxed at a higher rate than investment.  "I do a lot of work in predominantly Latino areas of Boston," said UFE Education Specialist Gloribell Mota. "Residents there are the working poor - they have jobs and pay taxes - yet are getting pennies in tax cuts and seeing health care services they depend on slashed."

"The Bush administration has followed a strategy of starving public services by pulling tax money away from education and housing and giving it away to multi-millionaires," said Karen Kraut, UFE's State Tax Partnership director. "States are suffering as a result, and people are going without essential services in order to fund the lifestyles of the rich."

The report calls for tax reforms to improve the fairness of tax distribution and ensure adequate revenues. Concerned Americans are urged to pass resolutions in their cities and towns to stop the tax cuts and restore local services that have been affected, to call and write their congressional representatives to take action to stop the cuts, and to sign the Tax Fairness Pledge at www.ResponsibleWealth.org/taxpledge.

The co-authors of the report are Chuck Collins, UFE Co-founder; Chris Hartman, UFE Research Director; Karen Kraut, Director of UFE's State Tax Partnerships; and Gloribell Mota, UFE Education Specialist.

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By Art Buchwald
Tribune Media Services
April 12, 2004
  

  April 15 is the saddest day of the year. It is the day Americans have to file their income taxes. 

 To mark the occasion, men beat their bare chests and women wear black shrouds.
Although it is the day of atonement, the Internal Revenue Service will not forgive anyone.
But not all Americans are sad. The latest report is that 60 percent of all the Fortune 500 companies did not pay any federal income tax because they put their money in offshore tax shelters.
These companies consider April 15 a grand holiday, like Christmas, and they hold festivities in Bermuda, the Cayman Islands, Liechtenstein and any tax-free place on the globe.
This is how they celebrate:
Let us say "Non-Tax Day" is held in Bermuda.
Hundreds of corporate executives fly in on their private jets. The capitol is decorated with American flags and banners, such as: "Bermuda Welcomes Tax Dodgers," 
Taxation Even WITH Representation Is Still Tyranny," and "No Matter How Much Money You Have, in Bermuda You Can Bank on It."
The day starts with the Enron Champion Golf Tournament. Any corporate executive who has been indicted will be given a 5-stroke handicap.
After the tournament, the CEOs and financial advisors will visit the safes where all the corporate money is held.
They will then walk around the building three times and throw pennies at each other.
Then Bermuda's most beautiful women will vie for the title, "Miss Capital Gains."
In the evening, the couples will dress in togas and dine on foie gras, turtle soup, quail and Bermuda fish, washed down with white and red wines and Dom Perignon champagne.
There will be dancing and speeches. "The Man of the Year" award will be given to the CEO who has squirreled away the most money from the IRS.
Because it is such a festive occasion, there will be door prizes: a shower curtain from Tyco, a completely furnished tax shelter in Liechtenstein from World Com, and dinner with the Adelphia Rigas family.
The Offshore Society president will make a speech not only defending tax shelters, 
but also pointing out how many jobs his company is sending overseas.
He will get a standing ovation.
While all this is going on in Bermuda, the people who have to pay their taxes are bitter.
"It's unfair," Greatneck told me.
"Life is unfair. That's why the corporations have accountants and lawyers and consultants who know every IRS loophole."
"But how can they call themselves good Americans?"
"Their stockholders consider them good Americans and that's good enough for people who are only interested in the bottom line."
"Hold it. How can we fight a war in Iraq and other places if they refuse to finance it?"
"If President Bush wanted them to pay for it, he wouldn't have given them a tax cut."
Greatneck said, "It isn't just the money I have to pay, but the time it takes to fill out the form."
"Have you ever thought about moving to Bermuda?"

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Whenever I see one of those folks who work for that powerful corporate lobby Wisconsin Manufacturers & Commerce, I always ask whether they've succeeded yet in convincing their pals in state government to do away with all business taxes.

They have, after all, won dozens of tax breaks in the Tommy Thompson and now Jim Doyle years. So many, in fact, that corporations now account for less than 5 percent of the state's total tax revenues. As recently as 20 years ago, they accounted for nearly 12 percent of the total tax bill.

WMC is quite up front about its drive to continually lower its members' tax bills. It argues that the lower the tax burden, the more jobs businesses will produce.

Too bad it isn't working that way. While we've cut corporate taxes virtually in half, Wisconsin still lags in job creation - way behind Minnesota, for example, where corporate taxes are significantly higher.

But corporate bigwigs are making more money. And even stockholder dividends, which can often rise when the tax burden falls, get a break under the new federal tax laws.

Wisconsin isn't the Lone Ranger, however.

The Wall Street Journal reported last week that corporate tax receipts at the federal level have fallen to the lowest percentage of overall revenue since the days of the Great Depression.

This has been the result, the business newspaper suggested, of U.S. corporations finding loopholes in the IRS rules and regulations to practically avoid paying taxes at all.

Here in Wisconsin, for instance, banks have avoided paying state taxes by setting up dummy fronts in Nevada and transferring most of their money-making business there, where there is no corporate tax. At the federal level, corporations have set up similar devices in places like Bermuda to escape U.S. taxes.

More recently, some have found a loophole to escape taxes by purchasing depreciation rights to public transit lines, highways and water systems.

Consequently, for the years 1996 to 2000, more than 60 percent of our country's corporations avoided any taxes at all. The percentage undoubtedly has grown in the four years since.

An analysis by the General Accounting Office of IRS data also shows that about 70 percent of foreign-owned companies that do business in our country don't owe any U.S. federal taxes either.

"Too many corporations are finagling ways to dodge paying Uncle Sam, despite the benefits they receive from this country," Sen. Carl Levin, the Michigan Democrat, told the Wall Street Journal.

Meanwhile, the people who don't have Madison and Washington lobbyists and no tax loopholes to exploit - that, of course, is most of the rest of us - fork over our fair and growing share.

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The Salt Lake Tribune
April 12, 2004
http://166.70.44.66/2004/Apr/04122004/opinion/opinion.asp

    As millions of Americans prepared to give their annual pound of flesh to the IRS, the government reported that more than 60 percent of U.S. corporations didn't owe any federal taxes between 1996 and 2000.
    That's right. Sixty percent paid no federal taxes.
    Now that you have caught your breath, please notice that these figures come from the Clinton boom years, when one would naturally have expected the federal coffers to overflow with taxes on corporate profits.
    In fact, The Wall Street Journal reported last week, corporate tax receipts actually have shrunk in recent years as a percentage of federal revenues. "By 2003, they had fallen to just 7.4 percent of overall federal receipts, the lowest since 1983, and the second-lowest rate since 1934, federal budget officials say."

   The reason? Tax dodging, a venerable American institution for individuals as well as corporations, has become even more deeply rooted in the executive suites of U.S. businesses.
    Lest you guess, however, that foreign-owned corporations doing business in the United States are more public-spirited, guess again. About 70 percent of them didn't pay any federal taxes during the same period.
    Some tax dodges are legal, others aren't. But as with sports, Americans bend the rules as part of the game.
    If Americans are concerned that corporations are dodging their responsibility, there are two broad answers. The tax code needs to be reformed to prune away tax havens, and tax enforcement should be beefed up.
    Of course, when the IRS cracks down on someone else, that's great. When it does unto me, that's police brutality.
    Nevertheless, it makes sense for corporations to pay taxes. Some people would argue that only individuals should pay taxes, since corporate costs, including taxes, are passed on to consumers anyway. But like individuals, corporations benefit from government services and should help to pay for them.
    The amount of wealth that benefits individuals in the form of corporate perks, rather than personal income, is another reason why businesses should pay taxes. If the tax code actually encourages these perks as a tax dodge, the law should be reformed.
    Of course, like individuals, some corporations, especially smaller ones, do not make money every year. But when they do, they should share in the general tax burden.

   © Copyright 2004, The Salt Lake Tribune. (In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

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By Mary Dalrymple
ASSOCIATED PRESS
April 12, 2004
  

http://www.washingtontimes.com/business/20040411-113303-7145r.htm

WASHINGTON - The Internal Revenue Service audited fewer corporations, small businesses and partnerships last year but more individual taxpayers, according to a study of government data.

Syracuse University's Transactional Records Access Clearinghouse, in its analysis of IRS data, made available Sunday, concluded that the audit rate for businesses of all sizes slid slightly last year to 2.1 audits for every 1,000 businesses, down from 2.2 audits per 1,000 businesses the previous year.

At the same time, the IRS audited 14 percent more individual tax returns. The audit rate for individuals increased last year to 6.5 audits for every 1,000 taxpayers.

Official audit rates released by the IRS last month show a similar trend.

Researchers said the declining audits of businesses exposes a flaw in the administration's tough stance against corporate wrongdoing.

"These and a number of other measures - documented by the agency's own data - indicate that the actual performance of the IRS differs in significant ways from some of the Bush administration claims when it comes to cracking down on corporate scofflaws," the report said.

Researchers point specifically to declining audits of the largest corporations and a type of business organization that passes income and taxes on to its shareholders or partners - an arrangement found to have been improperly used in some corporate accounting scandals.

IRS Commissioner Mark Everson said in an interview that the agency's broad attack on corporate tax evasion does not show up in the audit numbers.

"Am I satisfied with the numbers? No. I want to see them go up," he said. "I'm not surprised that that's lagging the other indicators. And while I think it's an important indicator, it doesn't tell the whole story."

Some advocates said the trend appears troubling.

"What struck me first was the commissioner earlier this week said that they'd increased enforcement and then I look at these numbers and say, 'What is he talking about?"' said David Keating, senior counselor for the National Taxpayers Union. "It really opens up a credibility gap."

Chellie Pingree, president of Common Cause, a government watchdog group, said the study suggests corporations are not paying their fair share.

"This is at a time when taxes have been drastically cut from the wealthiest in the country, and there are very heavy, legitimate demands on our government, between war in Iraq and homeland security," Pingree said.

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 US Trade Gap Explodes to Record in June 
 
   Agence France-Presse
    Friday 13 August 2004
http://www.truthout.org/docs_04/081404W.shtml
  

WASHINGTON (AFP) - The US trade gap exploded to a record 55.8 billion dollars in June, the sharpest deterioration in more than five years, the government said.

The shortfall mushroomed 19.1 percent, the biggest one-month rise since February 1999, to a seasonally adjusted 55.8 billion dollars, the Commerce Department said.

The trade gap shattered the previous record deficit in April of 48.2 billion dollars, and appeared to put the country on the path to an unprecedented annual deficit.

"The trade deficit soared to simply incomprehensible heights in June," said Naroff Economic Advisors president Joel Naroff.

"If we believe the Commerce Department, the trade deficit is running well above 600 billion dollars on an annualized basis," he said. The shortfall was "so far off the radar screen that it constitutes a sneak attack."

Naroff questioned the data.

"What, did foreigners go on strike and decide they didnt want to buy US goods anymore? Did the economies around the world suddenly collapse?" he asked.

Exports crumbled 4.2 billion dollars, or 4.3 percent, to 92.8 billion dollars, the steepest decline since the September 11, 2001 terrorist attacks, the Commerce Department said.

Foreign demand weakened for US-made capital goods, industrial supplies, foods, motor vehicles and consumer goods.

"It is just a phenomenal deterioration for one month in the trade balance," said BMO Financial Group senior economist Sal Guatieri. "There was broad-based weakness in export growth, which is a little disconcerting because it could mean that because of higher energy costs the global economy has softened a little," Guatieri said.

Imports, however, climbed 4.7 billion dollars, or 3.3 percent, to 148.6 billion dollars.

Americans snapped up foreign-made industrial supplies, capital goods and consumer items, showing strong underlying US domestic demand, especially among businesses, he said.

The dollar slumped on the news, tumbling to 110.605 yen from 111.715 just before the release. The euro took immediate advantage, rising to 1.2331 dollars from 1.2224.

Democratic presidential challenger John Kerry 's campaign seized on the data as a sign of economic mismanagement by President George W. Bush , who faces an election November 2.

"In the face of yet another report indicating a record trade deficit, the evidence is building that this administration hasnt come close to doing enough to enforce trade agreements and fight for jobs here at home," Kerry spokesman Phil Singer said in a statement.

A breakdown of the raw trade figures showed:

-- The deficit with China expanded 17 percent from the previous month to a record 14.2 billion dollars.

-- The US deficit with Japan widened 14 percent to 6.3 billion dollars.

-- With the European Union , the trade gap grew 35 percent to 10.6 billion dollars.

-- The deficit with the Organization of Petroleum Exporting Countries (OPEC ) grew 10 percent to a record 6.2 billion dollars.

The US deficit could force the government to downgrade its initial estimate of 3.0 percent economic growth in the second quarter of the year, Guatieri said.

But the news was unlikely to sway the Federal Reserve from a program of raising the short-term interest rate, he said.

On Tuesday, policymakers raised the federal funds target rate, which banks charge each other overnight, to 1.5 percent from 1.25 percent in a gradual effort to end the lowest rates in nearly 50 years.

"Outside employment, most numbers for July have suggested a fairly good bounce back in activity and that suggests the Fed will continue extending the tightening cycle in September," Guatieri said.

A separate report provided further comfort to the Federal Reserve, indicating price pressures may be easing.

Producer prices -- a measure of inflation at the wholesale level -- gained 0.1 percent in the month to July, and were up 4.0 over the past year, the Labor Department said.

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'What, Me Worry?'
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 By THOMAS L. FRIEDMAN 
NEW YORK TIMES
April 29, 2005
  

One of America's most important entrepreneurs recently gave a remarkable speech at a summit meeting of our nation's governors. Bill Gates minced no words. "American high schools are obsolete," he told the governors. "By obsolete, I don't just mean that our high schools are broken, flawed and underfunded. ... By obsolete, I mean that our high schools - even when they are working exactly as designed - cannot teach our kids what they need to know today.

"Training the work force of tomorrow with the high schools of today is like trying to teach kids about today's computers on a 50-year-old mainframe. ... Our high schools were designed 50 years ago to meet the needs of another age. Until we design them to meet the needs of the 21st century, we will keep limiting - even ruining - the lives of millions of Americans every year."

Let me translate Mr. Gates's words: "If we don't fix American education, I will not be able to hire your kids." I consider that, well, kind of important. Alas, the media squeezed a few mentions of it between breaks in the Michael Jackson trial. But neither Tom DeLay nor Bill Frist called a late-night session of Congress - or even a daytime one - to discuss what Mr. Gates was saying. They were too busy pandering to those Americans who don't even believe in evolution.

And the president stayed fixated on privatizing Social Security. It's no wonder that the second Bush term is shaping up as "The Great Waste of Time."

On foreign policy, President Bush has offered a big idea: the expansion of freedom, particularly in the Arab-Muslim world, where its absence was one of the forces propelling 9/11. That is a big, bold and compelling idea - worthy of a presidency and America's long-term interests.

But on the home front, this team has no big idea - certainly none that relates to the biggest challenge and opportunity facing us today: the flattening of the global economic playing field in a way that is allowing more people from more places to compete and collaborate with your kids and mine than ever before.

"For the first time in our history, we are going to face competition from low-wage, high-human-capital communities, embedded within India, China and Asia," President Lawrence Summers of Harvard told me. In order to thrive, "it will not be enough for us to just leave no child behind. We also have to make sure that many more young Americans can get as far ahead as their potential will take them. How we meet this challenge is what will define our nation's political economy for the next several decades."

Indeed, we can't rely on importing the talent we need anymore - not in a flat world where people can now innovate without having to emigrate. In Silicon Valley today, "B to B" and "B to C" stand for "back to Bangalore" and "back to China," which is where a lot of our foreign talent is moving.

Meeting this challenge requires a set of big ideas. If you want to grasp some of what is required, check out a smart new book by the strategists John Hagel III and John Seely Brown entitled "The Only Sustainable Edge." They argue that comparative advantage today is moving faster than ever from structural factors, like natural resources, to how quickly a country builds its distinctive talents for innovation and entrepreneurship - the only sustainable edge.

Economics is not like war. It can always be win-win. "But some win more than others," Mr. Hagel said, and today it will be those countries that are best and fastest at building, attracting and holding talent.

There is a real sense of urgency in India and China about "catching up" in talent-building. America, by contrast, has become rather complacent. "People go to Shanghai or Bangalore and they look around and say, 'They're still way behind us,' " Mr. Hagel said. "But it's not just about current capabilities. It's about the relative pace and trajectories of capability-building.

"You have to look at where Shanghai was just three years ago, see where it is today and then extrapolate forward. Compare the pace and trajectory of talent-building within their population and businesses and the pace and trajectory here."

India and China know they can't just depend on low wages, so they are racing us to the top, not the bottom. Producing a comprehensive U.S. response - encompassing immigration, intellectual property law and educational policy - to focus on developing our talent in a flat world is a big idea worthy of a presidency. But it would also require Mr. Bush to do something he has never done: ask Americans to do something hard.

]
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Funds and Games 
/
By PAUL KRUGMAN
New York Times
November 18, 2003
 

"... last year it seemed, for a while, that corporate scandals - and the obvious efforts by the administration and some members of Congress to head off any close scrutiny of executive evildoers - would become a major political issue. But the threat was deftly parried: a few perp walks created the appearance of reform, a new S.E.C. chairman replaced the lamentable Harvey Pitt, and then we were in effect told to stop worrying about corporate malfeasance and focus on the imminent threat from Saddam's W.M.D.

Now history is repeating itself. The S.E.C. ignored warnings about mutual fund abuses, and had to be forced into action by Eliot Spitzer, the New York attorney general. Having finally brought a fraud suit against Putnam Investments, the S.E.C. was in a position to set a standard for future prosecutions; sure enough, it quickly settled on terms that amount to a gentle slap on the wrist. William Galvin, secretary of the commonwealth of Massachusetts - who is investigating Putnam, which is based in Boston - summed it up: "They're not interested in exposing wrongdoing; they're interested in giving comfort to the industry."

I wonder what they'll use to distract us this time?"

Complete article at: http://www.truthout.org/docs_03/111903I.shtml

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Columnist Biography: Paul Krugman

"Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University.

Mr. Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

Mr. Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. His professional reputation rests largely on work in international trade and finance; he is one of the founders of the "new trade theory," a major rethinking of the theory of international trade. In recognition of that work, in 1991 the American Economic Association awarded him its John Bates Clark medal, a prize given every two years to "that economist under forty who is adjudged to have made a significant contribution to economic knowledge." Mr. Krugman's current academic research is focused on economic and currency crises.

At the same time, Mr. Krugman has written extensively for a broader public audience. Some of his recent articles on economic issues, originally published in Foreign Affairs, Harvard Business Review, Scientific American and other journals, are reprinted in Pop Internationalism and The Accidental Theorist."

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Spin the Payrolls
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By PAUL KRUGMAN
New York Times
August 10, 2004

  

When Friday's dismal job report was released, traders in the Chicago pit began chanting, "Kerry, Kerry." But apologists for President Bush's economic policies are frantically spinning the bad news. Here's a guide to their techniques.

First, they talk about recent increases in the number of jobs, not the fact that payroll employment is still far below its previous peak, and even further below anything one could call full employment. Because job growth has finally turned positive, some economists (who probably know better) claim that prosperity has returned - and some partisans have even claimed that we have the best economy in 20 years.

But job growth, by itself, says nothing about prosperity: growth can be higher in a bad year than a good year, if the bad year follows a terrible year while the good year follows another good year. I've drawn a chart of job growth for the 1930's; there was rapid nonfarm job growth (8.1 percent) in 1934, a year of mass unemployment and widespread misery - but that year was slightly less terrible than 1933.

So have we returned to prosperity? No: jobs are harder to find, by any measure, than they were at any point during Bill Clinton's second term. The job situation might have improved somewhat in the past year, but it's still not good.

Second, the apologists give numbers without context. President Bush boasts about 1.5 million new jobs over the past 11 months. Yet this was barely enough to keep up with population growth, and it's worse than any 11-month stretch during the Clinton years.

Third, they cherry-pick any good numbers they can find.

The shocking news that the economy added only 32,000 jobs in July comes from payroll data. Experts say what Alan Greenspan said in February: "Everything we've looked at suggests that it's the payroll data which are the series which you have to follow." Another measure of employment, from the household survey, fluctuates erratically; for example, it fell by 265,000 in February, a result nobody believes. Yet because July's household number was good, suddenly administration officials were telling reporters to look at that number, not the more reliable payroll data.

By the way, over the longer term all the available data tell the same story: the job situation deteriorated drastically between early 2001 and the summer of 2003, and has, at best, improved modestly since then.

Fourth, apologists try to shift the blame. Officials often claim, falsely, that the 2001 recession began under Bill Clinton, or at least that it was somehow his fault. But even if you attribute the eight-month recession that began in March 2001 to Mr. Clinton - a very dubious proposition - job loss during the recession wasn't exceptionally severe. The reason the employment picture looks so bad now is the unprecedented weakness of job growth in the subsequent recovery.

Nor is it plausible to continue attributing poor economic performance to terrorism, three years after 9/11. Bear in mind that in the 2002 Economic Report of the President, the administration's own economists predicted full recovery by 2004, with payroll employment rising to 138 million, 7 million more than the actual number.

Finally, many apologists have returned to that old standby: the claim that presidents don't control the economy. But that's not what the administration said when selling its tax policies. Last year's tax cut was officially named the Jobs and Growth Tax Relief Reconciliation Act of 2003 - and administration economists provided a glowing projection of the job growth that would follow the bill's passage. That projection has, needless to say, proved to be wildly overoptimistic.

What we've just seen is as clear a test of trickledown economics as we're ever likely to get. Twice, in 2001 and in 2003, the administration insisted that a tax cut heavily tilted toward the affluent was just what the economy needed. Officials brushed aside pleas to give relief instead to lower- and middle-income families, who would be more likely to spend the money, and to cash-strapped state and local governments. Given the actual results - huge deficits, but minimal job growth - don't you wish the administration had listened to that advice?

Oh, and on a nonpolitical note: even before Friday's grim report on jobs, I was puzzled by Mr. Greenspan's eagerness to start raising interest rates. Now I don't understand his policy at all.

Copyright 2004 The New York Times Company (In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

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Bush's Own Goal
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By PAUL KRUGMAN
New York Times
 August 13, 2004
  

A new Bush campaign ad pushes the theme of an "ownership society," and concludes with President Bush declaring, "I understand if you own something, you have a vital stake in the future of America."

Call me naïve, but I thought all Americans have a vital stake in the nation's future, regardless of how much property they own. (Should we go back to the days when states, arguing that only men of sufficient substance could be trusted, imposed property qualifications for voting?) Even if Mr. Bush is talking only about the economic future, don't workers have as much stake as property owners in the economy's success?

But there's a political imperative behind the "ownership society" theme: the need to provide pseudopopulist cover to policies that are, in reality, highly elitist.

The Bush tax cuts have, of course, heavily favored the very, very well off. But they have also, more specifically, favored unearned income over earned income - or, if you prefer, investment returns over wages. Last year Daniel Altman pointed out in The New York Times that Mr. Bush's proposals, if fully adopted, "could eliminate almost all taxes on investment income and wealth for almost all Americans." Mr. Bush hasn't yet gotten all he wants, but he has taken a large step toward a system in which only labor income is taxed.

The political problem with a policy favoring investment returns over wages is that a vast majority of Americans derive their income primarily from wages, and that the bulk of investment income goes to a small elite. How, then, can such a policy be sold? By promising that everyone can join the elite.

Right now, the ownership of stocks and bonds is highly concentrated. Conservatives like to point out that a majority of American families now own stock, but that's a misleading statistic because most of those "investors" have only a small stake in the market. The Congressional Budget Office estimates that more than half of corporate profits ultimately accrue to the wealthiest 1 percent of taxpayers, while only about 8 percent go to the bottom 60 percent. If the "ownership society" means anything, it means spreading investment income more widely - a laudable goal, if achievable.

But does Mr. Bush have a way to get us there?

There's a section on his campaign blog about the ownership society, but it's short on specifics. Much of the space is devoted to new types of tax-sheltered savings accounts. People who have looked into plans for such accounts know, however, that they would provide more tax shelters for the wealthy, but would be irrelevant to most families, who already have access to 401(k)'s. Their ability to invest more is limited not by taxes but by the fact that they aren't earning enough to save more.

The one seemingly substantive proposal is a blast from the past: a renewed call for the partial privatization of Social Security, which would divert payroll taxes into personal accounts. Mr. Bush campaigned on that issue in 2000, but he never acted on it. And there was a reason the idea went nowhere: it didn't make sense.

Social Security is, basically, a system in which each generation pays for the previous generation's retirement. If the payroll taxes of younger workers are diverted into private accounts, there will be a gaping financial hole: who will pay benefits to older Americans, who have spent their working lives paying into the current system? Unless you have a way to fill that multitrillion-dollar hole, privatization is an empty slogan, not a real proposal.

In 2001, Mr. Bush's handpicked commission on Social Security was unable to agree on a plan to create private accounts because there was no way to make the arithmetic work. Undaunted, this year the Bush campaign once again insists that privatization will lead to a "permanently strengthened Social Security system, without changing benefits for those now in or near retirement, and without raising payroll taxes on workers." In other words, 2 - 1 = 4.

Four years ago, Mr. Bush got a free pass from the press on his Social Security "plan," either because reporters didn't understand the arithmetic, or because they assumed that after the election he would come up with a plan that actually added up. Will the same thing happen again? Let's hope not.

As Mr. Bush has said: "Fool me once, shame on - shame on you. Fool me - can't get fooled again."

Copyright 2004 The New York Times Company (In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

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"If any one would sue you and take your coat, let him have your cloak as well;
 and if any one forces you to go one mile, go with him two miles.
 Give to him who begs from you, and do not refuse him who would borrow from you."
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- Matthew 5:1-40
  

Which one looks more like Ebenezer Scrooge?
"Mankind was my business."
- Condemned wraith Jacob Marley
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U.S. Policies Defy Spirit of Season 
  
  By Jesse Jackson     The Chicago Sun Times    
 Wednesday 21 December 2004
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"War is not a present Jesus would seek. Nor tax breaks for the wealthy, nor a spread of hunger and homelessness."
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"Measure yourself, taught the Messiah, by how you treat the "least of these."
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    Early returns on Christmas are up modestly, we are told. Are these reports on an increase in church attendance? Or a decline in the numbers of homeless? The spread of peace in the world? No, the reports are about sales, which are better than last year, particularly in the high-end luxury stores. Christmas - the mass celebrating the birth of Christ - is the biggest shopping season of the year.

    But, of course, that's not what the Christmas story is about. It's about a couple - Mary and Joseph - forced by an oppressive government to leave their home to travel far to be counted in the census. It's the story of a child born in a barn and placed in a manger - a makeshift crib. He might have died from exposure, but the stars aligned in the night to provide light and warmth. The innkeeper had no room for the strange couple. If he had understood who the baby was, he would have offered them his bed.

    The measure of Christmas is not about what is bought and what is sold. It is not about consuming. Yes, Wise Men left their daily ways, followed the star, and brought gifts to the poor child. But their wisdom was not in the value of their gifts - much of what they brought were scents, to mask the smell of the barn, perhaps - but in their ability to see the power in the infant, even though he was lying in a wooden manger. They saw what the innkeeper could not. The Christmas story instructs us to treasure every child, for even the poorest child of a homeless couple has limitless potential.

    Unlike the reports on the business page, the reports on the moral page are grim. Poverty is up in this country - more than 30 million now in poverty. Homelessness is up, with mayors reporting record numbers seeking shelter each night. Many of these are families with a working parent, still unable to afford an apartment or a house. More people go without health care for lack of insurance, or do without the prescriptions they need for lack of money. More than 45 million Americans lack health insurance.

(M.O.W. editorial insert)
  

    Reports from the values page are also pretty bleak. Inequality is at record levels, yet the administration that insists on cutting taxes on the wealthy also opposes any increase in the minimum wage. College tuitions are soaring, but Congress just authorized a cut in college grants to more than 1 million students. Schools and classes are overcrowded, but across the country, teachers are being laid off and needed repairs are put off.

    What was Christmas about? It was about an oppressed people who were praying for a Messiah, a mighty warrior who would conquer their oppressors. But when the Messiah came, he came as the prince of peace, not of war. He taught love and hope and charity, not violence and vengeance. He was the greatest liberator of them all, but he carried no arms, and provisioned no army. His army would be the legions of the faithful, struggling to follow in his path.

    But this year, the reports from the peace page are also grim. Our soldiers are in armed occupation of Iraq and Afghanistan. Our cities are girded against the threat of terrorist attack. We possess the mightiest military, but we are more insecure than ever. We're losing young men and women each day in a war of choice, while generating more hatred against us every week.

    War is not a present Jesus would seek. Nor tax breaks for the wealthy, nor a spread of hunger and homelessness.

    A mass for Christ would not be about shopping. It would celebrate family and community. Measure yourself, taught the Messiah, by how you treat the "least of these." Today in America, millions of poor children head to school not ready to learn. They suffer from malnutrition, from inadequate health care, from broken homes. One of five children in wealthy America is raised in poverty. We are failing the standard he taught us.

    Let us all remember the true spirit of Christmas this year. Protect the babies in the dawn of life. Care for the elderly in the dusk of life. Nurture the sick; shelter the homeless. Stop for the stranger on the Jericho Road. Work for the promise of peace. Surely that is what Jesus would want under his tree.

    Merry Christmas, everyone.

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  The Death of Horatio Alger
 
 By Paul Krugman
  The Nation 
 January 05 2004
  

"...between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent. Meanwhile, the income of the top 1 percent rose by 148 percent, the income of the top 0.1 percent rose by 343 percent and the income of the top 0.01 percent rose 599 percent. "

  The other day I found myself reading a leftist rag that made outrageous claims about America. It said that we are becoming a society in which the poor tend to stay poor, no matter how hard they work; in which sons are much more likely to inherit the socioeconomic status of their father than they were a generation ago.

  The name of the leftist rag? Business Week, which published an article titled "Waking Up From the American Dream." The article summarizes recent research showing that social mobility in the United States (which was never as high as legend had it) has declined considerably over the past few decades. If you put that research together with other research that shows a drastic increase in income and wealth inequality, you reach an uncomfortable conclusion: America looks more and more like a class-ridden society.

  And guess what? Our political leaders are doing everything they can to fortify class inequality, while denouncing anyone who complains--or even points out what is happening--as a practitioner of "class warfare."

  Let's talk first about the facts on income distribution. Thirty years ago we were a relatively middle-class nation. It had not always been thus: Gilded Age America was a highly unequal society, and it stayed that way through the 1920s. During the 1930s and '40s, however, America experienced what the economic historians Claudia Goldin and Robert Margo have dubbed the Great Compression: a drastic narrowing of income gaps, probably as a result of New Deal policies. And the new economic order persisted for more than a generation: Strong unions; taxes on inherited wealth, corporate profits and high incomes; close public scrutiny of corporate management--all helped to keep income gaps relatively small. The economy was hardly egalitarian, but a generation ago the gross inequalities of the 1920s seemed very distant.

  Now they're back. According to estimates by the economists Thomas Piketty and Emmanuel Saez--confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent. Meanwhile, the income of the top 1 percent rose by 148 percent, the income of the top 0.1 percent rose by 343 percent and the income of the top 0.01 percent rose 599 percent. (Those numbers exclude capital gains, so they're not an artifact of the stock-market bubble.) The distribution of income in the United States has gone right back to Gilded Age levels of inequality.

  Never mind, say the apologists, who churn out papers with titles like that of a 2001 Heritage Foundation piece, "Income Mobility and the Fallacy of Class-Warfare Arguments." America, they say, isn't a caste society--people with high incomes this year may have low incomes next year and vice versa, and the route to wealth is open to all. That's where those commies at Business Week come in: As they point out (and as economists and sociologists have been pointing out for some time), America actually is more of a caste society than we like to think. And the caste lines have lately become a lot more rigid.

  The myth of income mobility has always exceeded the reality: As a general rule, once they've reached their 30s, people don't move up and down the income ladder very much. Conservatives often cite studies like a 1992 report by Glenn Hubbard, a Treasury official under the elder Bush who later became chief economic adviser to the younger Bush, that purport to show large numbers of Americans moving from low-wage to high-wage jobs during their working lives. But what these studies measure, as the economist Kevin Murphy put it, is mainly "the guy who works in the college bookstore and has a real job by his early 30s." Serious studies that exclude this sort of pseudo-mobility show that inequality in average incomes over long periods isn't much smaller than inequality in annual incomes.

  It is true, however, that America was once a place of substantial intergenerational mobility: Sons often did much better than their fathers. A classic 1978 survey found that among adult men whose fathers were in the bottom 25 percent of the population as ranked by social and economic status, 23 percent had made it into the top 25 percent. In other words, during the first thirty years or so after World War II, the American dream of upward mobility was a real experience for many people.

  Now for the shocker: The Business Week piece cites a new survey of today's adult men, which finds that this number has dropped to only 10 percent. That is, over the past generation upward mobility has fallen drastically. Very few children of the lower class are making their way to even moderate affluence. This goes along with other studies indicating that rags-to-riches stories have become vanishingly rare, and that the correlation between fathers' and sons' incomes has risen in recent decades. In modern America, it seems, you're quite likely to stay in the social and economic class into which you were born.

  Business Week attributes this to the "Wal-Martization" of the economy, the proliferation of dead-end, low-wage jobs and the disappearance of jobs that provide entry to the middle class. That's surely part of the explanation. But public policy plays a role--and will, if present trends continue, play an even bigger role in the future.

  Put it this way: Suppose that you actually liked a caste society, and you were seeking ways to use your control of the government to further entrench the advantages of the haves against the have-nots. What would you do?

Copyright 2004 The New York Times Company (In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

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        SCOTT RITTER: The neocons believe in what they think is a noble truth, power of the few, the select few. 
These are godless people who want power, nothing more.
They do not have a country or an allegiance, they have an agenda.
 These people might hold American passports, but  they are not Americans 
because they do not believe in the Constitution. 
They believe in the power of the few, not a government for or by the people. 
They are a few and their agenda is global."
//
- "Scott Ritter: Neocons as Parasites "

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"...Bush gazed around the diamond-studded $800-a-plate crowd and commented on the wealth on display. 
"This is an impressive crowd -- the haves, and the have-mores," quipped the GOP standard-bearer.
 "Some people call you the elites; I call you my base."

 - George W. Bush
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"The issue today is the same as it has been throughout all history,
 whether man shall be allowed to govern himself or be ruled by a small elite."

- Thomas Jefferson
  

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/_____________
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Smart People
nrfnnfnf/
Bushwars
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Bushlies
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Cheneylies
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Incurious George
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St. George
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King George 
(the madness of)
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George the Lionheart 
and the New Crusades
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George of Orwell
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Georgie Warbucks
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George W. Hoover
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Vanishing Votes
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Death Culture
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Hall of Shame
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911 Accountability
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(Not-so) Friendly Fascism
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Project For A New American Perpetual War
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Fanning the Flames of Fear, Loathing and Terror
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T h e C o l l a t e r a l C h i l d r e n
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About This Site:
A Gathering Danger
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More writings by,  
and interviews with 
SMART PEOPLE
on our Dire Situation:
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Kurt Vonnegut Speaks 
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Bill Moyers Rallies
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Gore Vidal Rants
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Mark Twain Sings
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...