Is Paul Ryan the new Ronald Reagan, or the new Barry Goldwater?
84 days to the 2012 election
Mitt Romney’s pick of conservative budget-meister Paul Ryan to be his VP running mate puts liberals and moderates in both political parties on notice.
If the Romney-Ryan team prevails, voters will have embraced a set of ideas and policies that would literally change America.
A week ago, it seemed like the contest was between two fairly temperate defenders of the post-World War 2 consensus about our politics and society.
Quibbles aside, we would be remain a capitalist democracy where the government accounts for about a fifth of the overall economy and plays a big role in all our lives.
Big social safety net programs would need reform and tweaking — a view that Romney and Barack Obama clearly share — but no one was questioning their purpose or their fundamental validity.
It’s telling that Romney and Obama came up with nearly identical solutions (Romneycare and Obamacare) to the health insurance crisis that faced them both during their time as executives.
But Paul Ryan is the intellectual architect of the conservative latest counter-reformation.
He has taken the conservative concept that government is an essentially corruptive force — inspiring laziness, dependency and corruption — and translated it into a sweeping budgetary proposal.
Budgets, as someone or other famously said, translate ideas and policy into action. This is where lofty ideas get their grit and muscle.
If voters do embrace this vision, it will be a tipping point as profound as 1980, when voters embraced Ronald Reagan’s vision of America.
“Government isn’t the solution,” Reagan argued. “Government is the problem.” When it comes to the social safety net (as opposed to, say, military spending) Ryan’s spending plan takes Reagan at his word.
But we live in a very different age from 1980. Income tax rates are already far lower. The conservative movement’s ideas are far better known in full than they were in those days. The country is more polarized.
It’s also true that far more people rely (apparently without qualm) on the government for some form of financial support, ranging from Social Security to Medicare and Medicaid to food stamps and rent support.
The danger for the GOP is that voters will instead react to Ryan’s nomination the way they reacted to Barry Goldwater’s right-of-center campaign in 1964.
Like Ryan today, Goldwater laid out explicitly how he would downsize government — he didn’t simply talk in broad bromides. Voters got a clear picture of his conservative vision and they rejected Goldwater overwhelmingly.
In the online magazine Politico, some GOP pundits are already speculating that the choice of Ryan could either save the Romney campaign, lifting it to a narrow win, or the VP pick could lead to a big defeat.
If enough Florida’s seniors, for example, decide that the Republican ticket is just too nerve-wracking — at a time when the economy has already been jittery enough — another big state could slip beyond reach.
A narrow Democratic victory in November could very plausibly turn into a 332-191 blow-out in the Electoral College. That could have all kinds of implications, affecting House races, and the contest for control of the US Senate.
So what’s the right metaphor here? Have Republicans opened the door to the future of their party, as they did in 1980? Or have they found a formula for election night disaster, as they did in 1964? Your comments welcome.
Tags: analysis, election12, politics
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“The food stamp program has seen participation climb from 28 million at the start of the recession to 46 million today and has become a focus of fiscally conservative lawmakers critical of government spending.”
–Brian, NCPR
Thanks, Brian. That’s for this recession. Would be good to know if same rates held during recession of late 70s when Reagan took office, since you use 1980 as your point of comparison.
Walker, that’s not what I’m talking about and you know it. By the way, the government ought not to be involved in contraception or abortion and they shouldn’t use tax dollars to pay for them. There’s no freedom in that for many of us.
I am sick and tired of all the hate the poor rhetoric. It is nothing more than advocacy for selfishness and the twisted Ayn Rand brand of social order.
Paul says(quoting me): ” ‘That isn’t a problem of my writing but of other people’s ability to understand what is written.’
I like this one! You are kidding right?”
Larry says: “All the hate-the-rich rhetoric is nothing more than thinly disguised jealousy and advocacy for socialism. Sadly, we’re just about there now.”
I think Larry’s statement proves my point that some people simply wont or can’t understand clear writing.
I’m still waiting for one – just one! – conservative to admit that Reagan, Bush1 or W presided over during a period of time when the deficit increased and/or the federal debt grew.
Yes, Larry, I knew it’s not what you were referring to. But you did say “confiscatory taxes, have the government involved in every aspect of our lives.” Well the 90% top tax rate of the Eisenhower administration would certainly be labelled confiscatory today, and those laws against abortion and interracial marriage, not to mention private activity of a homosexual nature between consenting adults, seems to me an equally good fit to your comment.
Larry: “We have to stop throwing money at the poor; it doesn’t help them. If it did, poverty would be much less a problem today than it was in 1964 when Ronald Reagan first said exactly that.”
Seriously, do you believe that the problem of poverty is no different today than in 1964?
Wow, Knucklehead’s “clear writing” and myown’s cleverness have almost made me speechless. Almost. Nobody hates the poor, but people who keep running on at the mouth with cliches about Ayn Rand, Bush and the selfish rich aren’t winning any friends or admirers. The 50% who don’t pay taxes ought to be thankful that those of us who do are paying the bills. Maybe we should go to a flat tax, every dollar earned gets taxed, no “loopholes”, deductions or exemptions. That way, every American will pay their fair share, without exception. I like it! I’m paying through the nose now, so it won’t matter to me. A flat tax will get everyone in the game. How’s that for clarity?
There you go again Larry. I’m not going to quibble about “The 50% who don’t pay taxes” because I know that is shorthand for 50% don’t pay any income tax.
But the truth is that virtually everyone pays taxes and many of the very poorest pay a significantly higher percentage of their income in taxes than many very wealthy do.
Once again, it was not spending on social programs for the poor, or Social Security or Medicare that got us into the huge deficit. It was tax-cuts, two wars, a drug program and a financial collapse. And yes, they all happened under a Republican President named Bush (since our conservative friends seem to have amnesia). If the tax-cuts were so wonderful what exactly did we get for the lost tax revenue? Can anyone show us something productive? What we got was an enormous growth in inequality and a huge deficit.
So instead of reversing the mistakes that created the deficit Ryan and conservatives want to reduce the deficit by cutting social programs, Social Security and Medicare and give more tax-cuts to the wealthy. There is not a shred of evidence that cutting tax rates more for the wealthy will do anything other than make income inequality even worse. And cutting social programs, Social Security and Medicare to pay for the tax-cuts and reduce the deficit is more class warfare against seniors, the middle class and low-income workers.
Larry – don’t forget the payroll tax it’s a federal tax that those 50 percent pay. And it all goes in the same pot
It is just absurd to complain that low-income workers are not paying enough income taxes. It is an insult to hard working Americans. Why not support an increase in the minimum wage? Why not support reducing the ratio of CEO pay to worker pay back to where it was in the 50’s. Why not support giving workers better wages rather than concentrating the profits at the top?
If corporations shared their profits more evenly with their employees just maybe those employees might not need food stamps and might even make enough to pay income taxes.
Well spending and revenue are just two sides of the same coin myown. Yes of course if we taxed more we would have more to spend and if we spent less we would have less to raise through taxation.
You can’t lay the blame on one set of tax cuts which have been fully endorsed by both parties. Its just partisan scoring of points, the “bush” tax cuts the ‘obama” deficit and on and on.
Both sides have ridden this deficit wave because it WORKS. Who wouldn’t like to spend a bunch of money that you borrow at really low rates and effectively will never have to pay back in our lifetimes?
Given the market conditions right now with very low borrowing costs for the US government we are having no problem funding our debt, I would say keep on keepin on. Which is what is going to happen regardless of who is elected.
You are correct programs for the poor are not the problem, TANF, Food stamps, section 8, head start, etc, are small parts of our budget. Much like the Left’s belief that taxing the really rich will solve our budget problems, the Right believes that somehow getting rid of programs for the poor will solve our issues. Neither are correct.
We will need cuts and changes in social security (yes easy to do on paper almost impossible to do in reality), medicare and defense. These are all middle class programs funded by upper middle and middle class taxes.
But why do any of that when we can just run deficits?
Its a phoney debate on both sides. Just like the Reagan “revolution” was phoney. Reagan just spent on everything including programs for the poor, the Left called him a facist and the Right a fiscally conservative hero, neither were correct.
Its all just smoke and mirrors our fiscal situation can only be solved by a congressional mandate for broad change, meaning reductions in middle class government spending programs and increases in middle class taxes. We are the problem.
Mervel, if you look at the record Obama has offered a broad range of spending cuts along with tax increases in order to deal with the budget, but there is no help from the other side, at least among elected Republicans, to try to move forward.
Republicans sometimes wont even admit to plain reality because it doesn’t fit into their world view. I am leaving you out because you will admit when the right makes a mistake on occasion. But I don’t think you hold much sway over Congress.
I thought the budget commission that was set up had some reasonable positions. It was all just ignored.
Right now it seems to me the Republicans are out of whack on this issue more than the Democrats are, but they seem to be working together to do nothing.
Its kind of funny I remember last year when everyone was just going nuts about the deficit and refusing to raise the debt limit etc. OK what happened? Is that no longer an issue? The debt is larger now, but where is the massive concern?
Facts on the ground have shown that the US debt although problematic, is not that big of a deal right now. So that would tell me that you simply make everyone happy, you spend on defense and the middle class entitlements, the heart of what our government spends money on, and you leave taxes alone and continue to borrow. I honestly think that is what is going to happen.
Then you score political points by either pounding on the greedy rich or the lazy worthless poor. The key being neither are the real issue and are thus easy targets.
A couple of new articles about Ryan’s supposed economic expertise and the lack of details in his fiscal plan:
http://www.nydailynews.com/opinion/paul-ryan-imaginary-expertise-article-1.1137112
http://krugman.blogs.nytimes.com/2012/08/16/whats-in-the-ryan-plan/
I was speaking of Federal Income tax and nearly 50% of Americans don’t pay any. That’s not absurd, it’s a fact. If those Bush tac cuts everyone hates so much are allowed to expire, 20% of the people who are not currently paying FIT will have to resume paying. Also a fact. That, by the way, is how our progressive income tax works: “poor” people don’t pay; “rich” people do. Also a fact. I think a flat tax, where everyone pays on every dollar, would be better. Then, everyone will have something to complain about. That’s an opinion.
knucklehead, poverty was a problem in 1964 and despite the trillions of dollars spent trying to eliminate it over the years, it is arguably a bigger problem today.
myown,
I never said low income workers are not paying enough income taxes. I said that nearly 50% of Americans, many of them low and low-middle income earners, pay no Federal Income tax. Again, that’s a fact.
You also said: “If corporations shared their profits more evenly with their employees just maybe those employees might not need food stamps and might even make enough to pay income taxes.” That kind of “sharing” is called communism and has been proven an abject failure wherever it has been tried.
Before you call me a heartless capitalist, let me remind you that those corporations you think should share the wealth are owned, for the most part, by regular Americans through their participation in mutual funds, pensions, profit-sharing plans, 401Ks, etc. Participation by regular people in corporate ownership is at an all-time high.
Larry, the 50% of Americans who do not pay Federal income taxes includes retirees, students, workers on temporary unemployment insurance, etc. If you never said low income workers are not paying enough income taxes what is your point in saying “…nearly 50% of Americans, many of them low and low-middle income earners, pay no Federal Income tax”? Must be you are OK with that. Good!
Communism? Really? It is almost too silly to respond to. What I am talking about is who sets the compensation (out of the income a company receives) that is received by CEOs, shareholders, down to workers? It is not set in stone and has varied over the years. One measure, the ratio of CEO pay to worker pay, has dramatically increased over the past 30 years. The average CEO pay has skyrocketed while worker pay has stagnated and with inflation has actually decreased. Why is that? Do you not see that as an issue? You may say it is just the market at work setting the value of a worker.
So how does that worker value get set? By one worker negotiating his own contract with a large powerful corporation (which is really a form of organized capital)? No, it doesn’t work that way. The corporation says this is what we will pay you, if you don’t like it we will get someone else. So they pit every little worker against each other in a race to the bottom of the pay scale. So how can a little worker have any chance of getting a decent salary (share) from the total income of a large corporation? By organizing as a labor force (this is what used to be known as a union). There is a direct correlation to the decline of unions in the private sector the past 30 years and the failure of wages to grow or even keep up with inflation.
Our laws allow the formation of organized capital (corporations). We don’t have to have them. They are creations of our doing. But we have bestowed powers to them that give them an inherent advantage in the market place, legal arena and all other areas of our lives including the ability to set the value of the CEO and worker. Without organized labor or higher minimum wage laws the game of compensation is fixed in favor of organized capital. We need organized labor to counterbalance the power of organized capital.
Pay has gotten so low that millions of full-time workers now qualify for food stamps. So in reality, we are subsidizing corporate profits by giving their employees food stamps. Why don’t we send corporations a bill to reimburse us for the food stamps their employees receive? Better yet, I’m suggesting corporations pay their workers a better wage so they won’t need food stamps and might make enough to pay federal income taxes.
myown,
I said “any” in reference to taxes; you turned that into “enough”. In fact, somewhere I also said that 50% paying and 50% not paying seemed fair. I understand your desire to trash everything I write, but there ought to be enough there without making things up.
Apparently, my comment about communism wasn’t silly enough to prevent you from blathering on for four paragraphs about it. CEOs don’t set their own compensation; it is determined by the Boards of Directors of the corporations they for, and is subject to the conditions (profitability, efficiency, market share, etc.) those boards set. The same is true of what labor earns. As far as labor goes, the decline of unions can be related to the flight of capital to areas of economic efficiency, such as the shift in automobile manufacturing to Asia. That shift, by the way, was driven by American consumers, not some shady Republican-CEO conspiracy. Attempts to artificially influence the labor – capital relationship range from those beneficial to both sides (unions, anti-trust legislation) to those that ruin both sides, i.e., communism.
I haven’t paid less than 13% income tax in the last 10 years.
Larry, I am glad you finally clarified that you “said that 50% paying and 50% not paying seemed fair.”
I have to admit I was not optimistic you would read or comprehend my “blather”, as you so graciously put it. To wit, your words, “Attempts to artificially influence the labor – capital relationship” is such an example. My point was there is nothing intrinsic about modern day capitalism. All the written and unwritten rules are artificial and today are skewed in favor of organized capital. With the immense wealth behind big corporations they have immense power to influence politicians and policy. Big corporations do not like free markets or competition. Most of the regulations today are written by corporate lobbyists and are designed to protect market share or enhance a corporation’s profits. The little guy, whether consumer or worker, has little capability to compete against this juggernaut of corporate power.
“CEOs don’t set their own compensation; it is determined by the Boards of Directors of the corporations they for, and is subject to the conditions (profitability, efficiency, market share, etc.) those boards set. The same is true of what labor earns.”
That is just so naive. CEOs and Boards are management of the same club. Often the same country club. The relationship of the lowly worker on the assembly line to the Board is quite different, and again the deck is stacked against the little guy. Today there is no effective organized labor to offset the power of organized capital.
I think it says it all when today’s corporations are reporting record profits and are awash in capital yet their workers earn so little they qualify for food stamps.
I kind of like Myown’s idea. When large well funded corporations that pay a LOT to their executives and are very profitable pay low wages to a good portion of the their employees, this cost is carried by the taxpayer in the form of food stamps and other government programs, including the cost of paying for health care for the uninsured that the corporation will not insure.
A case can be made for a tax levied on low paying corporations to account for the burden they cause on society by essentially paying poverty wages and expecting society to take care of that shortfall for their employees.
The danger of the health plan that is currently being proposed is that large corporations are going to say great, we will pay the penalty for not providing health insurance and we will send our people all over to sign up for Universal health care. In fact if our employees make too much we can lower their wages a little to help them qualify.
This is not a crazy situation. I know from my own work of company employees who make $50 too much to qualify for child health plus and their employer provides zero health insurance or insanely expensive health insurance. They have gone to their employer who will lower their wages for a period of time allowing them to qualify for child health plus, or they will request fewer hours to qualify. The health benefits provided by child health plus are worth far more than $50 per month.
You are wrong, myown, about the relationship between CEOs and Boards of Directors. There are always exceptions but my experience was that all the good-fellowship and clubby atmosphere lasts only as long as business objectives are being met. I was not a CEO but I was part of management and I can tell you that if you don’t produce you don’t get paid and that it doesn’t take much failure before you get the “we’ve decided to go in another direction” memo. “Senior Management” looks sweet from the outside but it is a savage, uncompromising, demanding and competitive world where the winners get the cash and the losers get kicked to the curb.
Whatever the relationship between the CEO and the Board, the little guy down below has a much inferior relationship to the Board and little chance of increasing his compensation the same percentage as most CEOs.
Here’s Mr. Ryan’s impact on each bracket of income and why it screws everyone except the wealthy:
http://www.brookings.edu/research/papers/2012/08/16-romney-tax-implications-brown-gale-looney?rssid=LatestFromBrookings
And here is his flip flop on stimulus:
http://swampland.time.com/2012/08/14/paul-ryan-and-the-stimulus-a-match-designed-to-make-my-head-explode/
myown,
You seem determined to hold on to your cherished belief in the inherent unfairness of capitalism and your well intentioned but misplaced belief in communism as the answer. You don’t give any creedence to the experience or opinions of others. Go right ahead and start singing the Internationale if you like.
Larry, I think it is sad your unhealthy fixation with Communism blinds you to considering any flaws in capitalism.
It sounds like you believe it is acceptable or inevitable or just the way it is that a corporation can earn record profits and accumulate so much cash they don’t know what to do with it yet pay their workers so little that they qualify for food stamps. If you do fine, but you are only making a fool of yourself by calling people who have a different opinion of the subject as Communists. Really, that is so 1950s.
Oh yeah, about those poor CEOs who live in such a “savage” world. I am sure the line worker who makes less in a year than the CEO makes in an hour agrees with you. And I am sure he agrees with conservatives who say it is the workers own fault that he is paid so little and that the poor deserve to be poor.
BTW, if you happen to follow business news there is a constant flow of reports of CEOs who run a company into the ground, and yes they might eventually be dismissed, but they walk away with a golden parachute. Under CEO Leo Apotheker Hewlett-Packard’s market value plunged by nearly $40 billion in just 11 months yet Apotheker walked away last year with more than $13 million in cash and stock. Just one of many similar stories.
If the company struggles the CEO departs with millions but the little guy in the plant gets laid off and his pension fund raided. It sure is tough to be a CEO.
Did you hear the one about the Yahoo CEO, Scott Thompson, who lied on his resume about his academic credentials? Yahoo rightly denied him severance pay but they let him keep a $1.5 million bonus and $5.5 million in stock that was given to him when he was hired. Not too shabby for 4 months of work. I wonder what a factory worker would walk away with if he similarly lied on his resume and was fired? My guess is they would be a little tougher on him – maybe even press criminal charges. But you’re right, the poor CEO really lives in a “savage” world.
It’s not an unhealthy fixation, it’s reality. We live in a system of free-market (mostly) capitalism where businesses are free (mostly) to do as they please. As I have noted previously, there are some artificial restraints on the system that benefit all, but I guess you forgot that part. As business is free to do as they please so is labor. No one is forced into involuntary servitude.
Your obsession with evil CEOs and rapacious corporations is what is unhealthy. Do you think it is part of a vast conspiracy to oppress labor? And by the way, if what you suggest as a remedy isn’t communism, what is it? We have come a long way since the 1950’s but some things never change.
“Do you think it is part of a vast conspiracy to oppress labor?”
Yes, absolutely. Why do you suppose there has been such a massive transfer of the nation’s wealth from the middle classes to the to one-tenth of one percent in the last thirty years? It just sorta happened?
“And by the way, if what you suggest as a remedy isn’t communism, what is it?”
It’s called regulation and reform, starting with a reversal of Citizen’s United, the most egregious court decision in many decades.
Communism is dead, Larry. It’s not under your bed, it’s not in the closet. It’s toast.
Oh please, give me a break with the conspiracy theories! Who is behind it, the Bush family or the Koch brothers? Maybe it’s Skull & Bones or the British Royal family. Who knows? I do know that unions remain a potent force in American economics and politics and that labor is still well-off compared to the rest of the world. That crap about the one-tenth of one percent stealing the middle class’s wealth is just that: crap. Just because people repeat it over and over and over does not make it true. The reality is that responsible middle class Americans are still doing just fine, albeit not as fine as they were doing before the housing bubble burst and the recession began. It’s like the guy who bought a house for $250K and cries because it’s no longer worth the $1M it grew to. It’s still worth $500K and unless he borrowed against the $1M and spent it (not responsible) he still OK. It’s all relative. I’m sorry for you if your experience has been so tragic as to make you so paranoid and pessimistic.
No, Larry, there’s no great mystery about it, and yes, the Koch brothers figure into it. But ALEC, the American Legislative Exchange Council has been a primary instrument. But the roots go back to “right-to-work” laws and Ronald Regan’s anti-labor efforts.
As for the vast transfer of wealth to the top one-tenth of one percent, it has nothing to do with the housing bubble.
My experience has not been the least bit tragic. But I know what’s been going on in this country for the last thirty years, and it isn’t good, whether you can see it or not.
Here’s a few links for you, if you want to understand where I’m coming from:
The Great Wealth Transfer
Debt Political Theater Diverts Attention While Americans’ Wealth Is Stolen
Grand Theft America
I know you don’t believe in dismissing something without reading it, so go ahead, read, and tell me what you think.
I don’t know how one measures greed as this is a vice and not an economic principle. But something is going on when those in charge in the US of our major corporations and the most wealthy among us; don’t seem to have any shame about making so so much more than other more successful CEO’s in other developed countries. But our society is not based on honor it seems to glory in greed, hedonism and avarice.
If there was a connection to the performance of these corporations and they CEO pay I would think of it differently. But look at the great bust, places like AIG or GM for that matter, these were companies run into the ground by very bad performing management, yet they all were paid far far more than comparable management in other successful companies. It seems to be almost random, just whoever is able to steal the most wins. This was not so even in the US in the 1960’s when CEO’s made much much less than they do today in real terms.
So if this isn’t enough to make you wonder about our society and greed I don’t know what is. These kids post pictures of their 12,000 dinner bills as cool? These are the children of the men and women above who are making this sort of money.
http://www.cnn.com/2012/08/17/tech/web/rich-kids-of-instagram/index.html?iref=allsearch
So how many of our 1% ers and leaders children are in the Armed forces, have some honor? Maybe we need some true Royalty?
http://www.cnn.com/2012/08/18/world/europe/uk-prince-william-rescue/index.html?hpt=hp_t2
Yes, absolutely there has been war against labor for the past 30 years. There has been a concerted effort to discourage, prohibit and dismantle private unions by organized capital. Republican states and corporations have done all sorts of maneuvers to keep labor from organizing. As a result private union membership has fallen dramatically the past 30 years. Today the average worker has no leverage to compete with the power and wealth of large corporations. Corporations (organized capital) control the political process and have been able to tilt the playing field dramatically to their favor over labor interests.
A new report shows that twenty-six big US companies paid their CEOs more last year than they paid the federal government in tax. I would also like to see what they are paying their employees. And do any qualify for food stamps or other government benefits because their income is so low?
http://www.dailymail.co.uk/news/article-2189264/Institute-Policy-Studies-26-companies-paid-CEO-paid-taxes.html
And an interesting contrast with how CEOs lived in the 1950s:
http://features.blogs.fortune.cnn.com/2012/05/06/classic-top-500-executives/
Just to take this in a slightly different direction, take a look at this article in the NY Times: Skilled Work, Without the Worker.
This stuff is going to happen, whatever anyone does. So the question would seem to be, what happens to all the workers who used to do this stuff? And who is going to be able to buy the products these machines crank out when only a handful of highly skilled workers is needed to produce them? We seem to be painting ourselves into a corner here.
One thing seems clear– we should be working on reducing our population post haste! And Paul, I’d be interested in your views on how one sustains perpetual growth in the face of perpetually shrinking employment.
Well there is plenty of things to do. Right now we have a major labor shortage in many non-college educated trades. However when we don’t invest in education and we have a high school drop out rate nationwide of over 25%, then yes; the future does not look good. I mean you don’t need to be a scientist, but you need to be able to read, do basic math and follow directions and have a work ethic; to do many of these jobs.
But I think it is cultural, you can’t have a strong labor movement when no one wants to be do labor in the first place. Why don’t we have more of our leaders children serving in the Armed Forces? When we cultivate a winner take all, Kardashian society, you will in the end see a decay at all levels in our culture and our economy.
When vice becomes virtue we are indeed doomed.
Talk about unhealthy fixations! What’s up with the CEO hating? Who cares and what relevance does it have to the political process? It’s private industry and they can do what they want with their businesses. This obsession comes from ignorance and jealousy. Next, we’ll be hearing that professional athletes, rock stars and actors are part of the conspiracy to opress American labor. Get a real issue!
It is a real issue, Larry. Your failure to recognize it’s reality doesn’t make it any less so.
I’ve said it before, and I’ll say it again: I have absolutely zero desire to have great wealth: I’m perfectly content with what I have. So jealousy has nothing to do with it. And yes, CEOs can do what they want with “their” businesses because lax regulation allows them to scam investors. Remember Enron? That was the tip of the iceberg.
And how do you explain the extraordinary shift of wealth from the middle class to the CEO class?
I am not sure it is a fully political issue though? It is more about a decay in our culture. Greed is no different from lust or anger and violence etc. The fact that we have a culture that promotes taking huge sums of money for doing a bad job, essentially stealing from stockholders and workers with the blessings of the Board, shows that something is very wrong.
Why do our CEO’s make so much more than other world wide CEO’s? If US companies were more profitable I would say ok makes sense. But they are not, it is much more analogous to the Russian system. You privatize the gains and amass huge wealth, and you socialize the losses passing them on to the citizens. This is what happened with much of Wall Street, GM, AIG etc when the crash happened. I do think we should look at how our system is structured from a regulatory standpoint.
Incidentally, a major factor in the transfer of wealth from the middle class to the ultra rich is the Bush tax cuts: 40% of the cuts went to the top 1% of taxpayers. And that was on top of the Reagan tax cuts, which also went predominately to the top 1%. Add to that the “offshoring” of corporate profits to avoid taxes, and you’re left with a huge hole for middle class taxpayers to fill.
And Mervel, I think that greed is different from lust and anger and violence, in that, at least as we have set it up, it seems to operate so smoothly that it sucks money out of people’s pockets in ways that you have trouble seeing. Anger, violence, who could defend them? But Wall Streets ways operate in such arcane ways that it’s hard to figure out how the money siphon works.
[Wait a minute– when did anger become a sin, Mervel? Last I heard, the Ten Commandments included “Thou shalt not covet thy neighbour’s house, [bankers beware] or wife” and “Keep the sabbath day holy” and “Thou shalt not take the name of the LORD thy God in vain” (OMG!) but there’s noting in there about anger, that I can find. Even violence gets a pass, as long as it stops short of killing.]
Walker, I finally got to read that NY Times article. It was interesting but I bet they have written many similar stories over the past 50 years about computers and robots replacing laborers. And that is a trend that will continue. Yes, some laborers will lose jobs but other new jobs are created to design, program and maintain the robots. The newer jobs probably pay more but there are a lot fewer human workers. In the long run, as population growth continues, I doubt there will be enough jobs for everyone. I saw this somewhere the other day that describes the eventual evolution of employment:, “In the future there will be two classes of workers – humans to feed the dogs; and dogs to keep the humans away from the computers.”
Mervel mentions a cultural decline in the value of labor. I do see that also, but maybe not for the same reasons. Here are a couple:
Decline of labor unions in the private sector. There was a time when many workers were proud of their jobs and happy with the pay and benefits the union obtained for them. Several generations often worked at the same plant or factory and there was often pride in what they built. Unions helped foster that sense of pride in being a laborer.
Tax laws that favor wealth over labor. Why are income tax rates for wages much greater than income from stock dividends and capital gains? Wages for digging ditches are taxed higher than for pushing some buttons on a computer to make stock bets. Why are payroll taxes limited to the first $110,000? The whole tax system provides favors to non-work income and penalizes the wage worker. This is one reason the disparity in wealth has grown so big and work is seen as for chumps.
So if you don’t want to be a chump you go into the finance world. Most of our best and brightest young people have been siphoned down this rat hole. The goal is to work on Wall Street or big finance and make a fortune. It doesn’t matter if there is no social usefulness for trading stocks and futures by the nanosecond or creating derivatives that no one understands – as long as it makes you wealthy. And it is nice that the government will bail out your mistakes because your casino bets are so large it could take down the whole system.
Take a look at drugs. Many young kids see their best chance with being in the drug trade. Who wants to work at McDonalds when you can score big with drugs. What would happen if we looked at the drug issue as most other advanced countries do? You would eliminate the black market for drugs and most of the gang type entrepreneurs. We would also reduce our prison population which is the highest per capita of any advanced nation. Of course that means more people on the streets looking for jobs that don’t exist just as cities and states cut back on public employment. And less training opportunities as those programs are also cut. But maybe we can shift the funds we spend on unproductive incarceration to job training and education.
Also, here is an interesting view from Mark Cuban:
http://blogmaverick.com/2012/08/16/which-usa-do-you-work-in/