If the 1930s Are Repeating Themselves, What Did We Learn From the Last Century?

We Still Haven’t Learned the Greatest Lesson of the 20th Century Yet (The Improbable and Beautiful Recipe for Human Prosperity)

It's been a long time since I wrote on this blog ... but I need to vent now more than ever!

On this 75th anniversary of D Day, what strikes me is a certain kind of sadness, a new discomfort amidst the grief of a long-ago tragedy. If we’d learned much from the last war…why does it feel a whole lot like the 1930s are repeating themselves? After all, here we are. Repeating just the same sequence of ruin that led up to that war. Fascism on the march in nation after nation, from America to Britain to Poland. Nationalism and extremism surging. Hate and violence growing, growing, growing by the day. Trade wars spiralling out of control. Nations that used to be friends becoming enemies, hurling insults at one another. Maybe the bad guys have changed names and faces — but the script they’re playing out certainly hasn’t.

Doesn’t the world feel like it’s spinning out of control these days — just like, I’d bet, it felt in the 1930s? Just a decade ago, I’d bet you would have said it was unthinkable that racist, supremacist, authoritarian demagogues would have led the US — and have the UK to the brink of self-inflicted catastrophe. That they’d be sitting in the White House building networks of concentration camps, lying to the nation every day, and flouting the law. And yet here we are. This decade is very much like a repeat of the 1930s. And that single fact proves how little we learned from the last war, its spark, its aftermath — all its great lessons seem to have gone over our heads.

So let me try to illuminate them, and you can judge for yourself whether I succeed or fail.

There were three great events of the 20th century. But one of these three, which may be the most important of all, has been almost totally unnoticed, especially by us Americans. There was the reduction of global poverty, there was the rise of international democracy — and there was the European Miracle.

Now, it’s hard for many of us to swallow our pride and admit there ever was a European Miracle. We Americans regard ourselves as the masters of the world. Asians and Africans regard Europe with the suspicion of the bitter hangover of colonialism. But none of these emotions change the fact of the European Miracle. They only make us too blind to see it, and that is how ages turn dark, my friends.

What do I mean by “the European Miracle”? We Americans have been taught — brainwashed, perhaps — to think of Europe as some kind of strange, backwards land. But the truth is that Europe has built the world’s most successful societies…ever. Far, far more successful than anyone else. Sure, Europe has its problems — no society is now or ever will be a utopia. (And in this essay, I’ll use “Europe” to mean Western Europe — not peripheral Soviet states.)

Yet what Europe has done successfully is something so vital, so profound, so beautiful, that few of us ever really stop to take it in. Its citizens enjoy the highest standards of living, ever. Period. In all of human history. Full stop. Not by a little bit. But by a very, very long way. They are happier, richer, wealthier, better educated and informed, more diverse and tolerant, kinder and gentler. They are less stressed out and calmer and saner. Europeans live five years longer than Americans, and the gap is growing every year. They aren’t poor, and getting poorer. They top global scales of happiness, meaning, and purpose, year after year — while Americans top global scales of anger, rage, depression, and anxiety, not to mention violence, abuse, and despair. The average European enjoys a life that’s impossibly good on nearly every dimension that one can think of. Impossible to three parties: to Americans, to Brits, and to history. Why do I say that?

If I’d told you in 1945, at the end of the last world war, that the world’s most successful society, the place in which human beings were the richest, healthiest, sanest, and happiest was…Europe…you would’ve rightly laughed at me. Europe? That smoking ruin? Because, of course, Europe was a wasteland like no other. It was utterly devastated. It was wrecked like perhaps no society in history has ever been wrecked. It’s great cities were mostly shattered ruins.

Europe had nothing left after the last war. And I mean nothing. I don’t just mean “no money”, which should be obvious. I mean it had no democracies. It had no constitutions. It had no laws. It had nothing, really, that we regard as modern resources to speak of whatsoever. Think of that for a second. Really imagine it. Imagine Berlin, Paris, Amsterdam in ruins. Imagine all those places not just bankrupt — but barely even countries anymore. Whole generations, whole places, whole towns, just gone. Poof. There was little idea how to even keep these countries working as societies anymore. How do you rebuild from a place of genocide, holocaust, of death and utter and total destruction?

We fail to remember this, to really appreciate it. All of us, I think. Even Europeans. Americans and Anglos, certainly.

We completely, absolutely, and totally underestimate the magnitude of the European Miracle, because we forget that Europe, not so long ago, was a land blighted and destroyed. So just think of the scale of it for a second. A devastated continent, with no resources left to speak of. None. Not even countries, really, not laws, not constitutions, not rights. Nothing. Just the void left behind by death and violence on on unimaginable, industrial scale.

And then, just one human lifetime later, it had become the most successful society in human history. Ever. The place where people lived the best lives human beings had ever lived, measured in hard, objective terms. WTF?

Do you see how staggering that is? Let me say it again. Just one human lifetime. To go from a place with nothing, to being the most genuinely prosperous societies in history, ever. Nothing like that has happened in human history before — and perhaps nothing like it will happen again. Europe discovered something that people had been searching for since the dawn of time, my friends: the recipe for human prosperity. Only the world has been all too slow to pick up on it — and even Europe itself is forgetting its own miracle these days.

Here is what is even more staggering. And it didn’t accomplish any of that the old way, either. The old way: I want to be prosperous, I want my people to be prosperous. What do we do? We make the most violent and ruthless ones among us “noble”, and the most violent and ruthless among them “king.” He declares war the ones with the things we want — whether they those things are gold and jewels, or land, or bodies to enslave. Maybe we win — and they declare it right back on us, soon enough. And so the cycle of violence that has defined human history has gone on, and on, and on. Everywhere — except, at last, crucially, Europe.

So Europe did something so remarkable that we still don’t understand it at all, you and I, as a world. Even Europeans themselves, I think, take it a little bit for granted now, these decades later. It discovered something very much like the alchemists’ secret. It figured out how to turn the lead of poverty, ruin, and devastation into the gold of happiness, stability, and prosperity. Suddenly. Snap your fingers! Blink. One human lifetime. Lead into gold. Gold. Not blood. Not bones. Not despair and tears and cries of pain. Europe discovered what has eluded human beings all these long centuries long: the recipe for human prosperity. And it was at once simpler, more beautiful, and more improbable than anyone could have imagined.

Here’s what it wasn’t: winning riches through the subjugation and abuse of others. Europe had done that, too. Where did it end? In war, of course. That was the American way. America, remember, was an apartheid state — Americans hate it when I use this term, but what else do you call a country in which “intermarriage” was illegal — into the 1970s. By then, European societies had provided all their citizens with universal basics. And that is the beginning of the secret to this alchemical recipe for turning lead into gold.

Europe had nothing after the war, remember. It was bankrupt, poor, devastated, its young dead. It had so much nothing, in fact, that it didn’t even have the most basic thing a country can have: a constitution. So European societies set about rewriting their constitutions. They had to. They didn’t have much of a choice. Only this time, they rewrote them in a new way in human history — a quantum leap occurred, that nobody much noticed.

The great war had happened because the Weimar Republic imploded into the horrors of the Nazi Regime. And that had taken place because the average German had grown newly impoverished. The logic was as simple as it was obvious: economic stagnation and decline lead to fascism and authoritarianism. People flee from the desperation and anxiety of imploding lives, into the arms of a strongman — who blames their problems, cleverly, on the vulnerable, the powerless, and the weak. Once they’re exterminated, he says, you will be Great Again! Bang — the 1930s. Or is just that happening today? It’s hard to tell, sometimes, isn’t it?

So this great generation of European leaders after the war reasoned that if the logic went — stagnation, poverty, decline, fascism — then the way to prevent it was to ensure that everyone had the basics as human rights. They created, therefore, the most sophisticated and advanced rights human beings had yet: rights to healthcare, income, childcare, even abstractions like dignity. And those were the basis of Europe’s new constitutions.

(Now, note for a moment how significant this is. We Americans are centuries behind — our Constitution is centuries older, and therefore, so are the rights in them. Who would have imagined a right to “healthcare” in 1776? The vaccine didn’t even exist.)

Those rights laid the basis for expansive systems of public good. France’s pension system, Germany’s healthcare system, Scandinavia’s childcare system, and so forth. Because there was now a new set of human rights that societies had to guarantee — that was the key to preventing fascism ever recurring, remember — it was necessary therefore to build institution to administer and govern them.

What was really happening here? What was the secret Europe had discovered, in hard, simple, plain spoken English? Europe had discovered that if it reinvested about fifty percent of its economy in…its very own people, in their betterment, in genuinely good lives for them, in their education, their health, their sanity…then that investment, over time, was to yield staggering returns. Returns far greater than anything else in human history.

As Europe invested and invested in these things, healthcare, education, childcare, transportation, and so on — up to fifty percent of its economy, every single year — a miracle slowly began to take place. And then it grew exponentially, skyrocketing upwards. Much like compound interest, European life got better and better, every single year. How could it not, when all these things were available in abundance, to every single person? And yet because there was more invested in them every year, their quality and quantity only ever increased.

That is the miracle, my friends. It is why today an American pays $50,000 just to have a child — more than the average American’s income — while the average European simply walks down the street to the public hospital, and has a child…who then enjoys world class care, school, college, university, and then, after that, transportation, labor protections, retirement. Life couldn’t be more different now in Europe than in much of the rest of the world — and the reason is the European Miracle: reinvesting in people, every single year, over and over again, in their health, sanity, education, mobility. When Europe was doing that, how could life not get better and better?

And as European life improved and improved, the strange new theory was proven correct. People turned away from fascism, away from authoritarianism. Prosperity did indeed bring about a great and lasting peace. But I want you to really know it — to feel it deep in your bones.

What did America and Britain do differently? They didn’t reinvest in people as much. America failed so completely, in fact, that the opposite of what Europe did ended up happening: people ended up preyed on. The average American is now broke — and dies in debt. Do you see what I mean by “Americans didn’t invest in themselves as a society”? So who ended up taking the lion’s share of what growth, what gains there were in the economy? A new band of super rich, who soon enough become the ultra rich — because by now more than 100% of the economy’s gains were going to them. Instead of being reinvested in hospitals, schools, universities, high speed trains…the money just piled up in the coffers of the super rich, and by about 2000 or so, they’d bought so many yachts, mansions, and penthouses, there was literally nothing left to do with it, so they began to hide it offshore.

Let me put that much more succinctly. Europe reinvested half its gains and more in people — in public goods and institutions that benefited them in basic, direct, tangible ways, improving their healthcare, education, transportation, jobs, and so forth. America invested nothing in its people. Less than nothing, in fact. It let its people be preyed on by megacapitalists, abused by endless wars, ruined by greed and selfishness. How were Americans going to end up anything but broke, dumb, sad, poor, and sick..when nobody was investing in hospitals, schools, jobs, and so on?

And so the theory was proven right — again. This time, in the opposite direction. Just like the theory predicted that prosperity would bring about peace, it also predicted that growing impoverishment would bring about fascism and authoritarianism, too. Bang! At precisely the moment America’s middle class became a minority, that the average American began to live and die in debt — American fascism rose, as if perfectly on cue. It’s so well predicted by that old European theory that it’s almost eerie, isn’t it?

And yet too few of us still understand any of this, my friends. Even Europeans. And their leaders. Even Europe has turned against the lesson of its own miracle in recent years — neoliberals running the European project underinvesting severely in all those great institutions which brought about peace, through prosperity. The result was predictable, too: growing poverty in Europe, which meant a rising tide of authoritarianism and supremacism once again. And yet Europeans have kept it in check, so far, precisely because their constitutions and institutions protect them against fascism truly taking over — just as they were designed to. They are lucky. Anglo societies have no such protection — and that is why they are turning fascist by the day.

None of us — European, American, British, African — fully appreciate today the epic scope, the meaning, the lessons, of the European Miracle. So let me spell it out. Peace comes from prosperity. Prosperity comes from reinvesting in people, in their basic quality of life, their healthcare, education, transportation, retirement, and so on. That means building institutions to do just that. And those institutions must be written into constitutions, so they are protected, nurtured, safe, designed to endure…forever.

There have been few events in history as significant, as unlikely and momentous, as beautiful, as the European Miracle. And yet this decade feels too much like the 1930s for comfort, doesn’t it? And what that should tell you, my friend, that we haven’t understood the lessons of the last war yet, the European Miracle and its significance — but we’d better begin, now.

It wasn’t just Europe that began to be liberated on D-Day, my friends. If we really understand history, it was all of humankind. From the poisons of hate, poverty, ignorance, despair, and violence. With the strange, improbable, beautiful secret of human prosperity, which had eluded us all those long, war-torn millennia.

It's not too late, my friends, to save America! We are at a crossroads and we can turn away from this road to fascism that we are currently on. We can vote for Progressive politicians that can put into place the same kind of programs of reinvestment in people that Europeans enjoy, and we can bring back the great middle class in America.

The smoke has cleared, and we peer down at the victim: another gun control bill, shot full ‘o holes. Just like in the old horse operas: a hero again shoots to protect a precious freedom, America’s right to bear arms. For many who keep a romantic image of America’s past, gun control is like that, a battle steeped in American tradition. It calls us back to those legendary days of the Old West, when cowboys defended their honor and their horses by way of their Colts.

In fact, most people see the cowboys of the Old West as THE defining heroes of 20th-century America. He’s used to sell everything from soap to hats. He’s apparently also an ideal American for anti-gun control groups: gun shows and gun advertising promote from a distinctive Old West flavor.

Today’s anti gun control forces count their strongest support among society’s leaders from the states that once formed part of the Old West. The actual Old West pioneers of historical fact viewed matters differently, however. They would certainly hail the campaign to protect an American right to bear arms, but the record puts them behind "moderate, common-sense measures" for gun control—the very kind that President Obama has proposed.

Pioneer publications show Old West leaders repeatedly arguing in favor of gun control. City leaders in the old cattle towns knew from experience what some Americans today don't want to believe: a town which allows easy access to guns invites trouble.

What these cow town leaders saw intimately in their day-to-day association with guns is that more guns in more places caused not greater safety, but greater death in an already dangerous wilderness. By the 1880s many in the west were fed up with gun violence. Gun control, they contended, was absolutely essential, and the remedy advocated was usually no less than a total ban on pistol-packing.

The editor of the Black Hills Daily Times of Dakota Territory in 1884, called the idea of carrying firearms into the city a “dangerous practice,” not only to others, but to the packer himself. He emphasized his point with the headline, "Perforated by His Own Pistol."

The editor of the Montana’s Yellowstone Journal acknowledged four years earlier that Americans have "the right to bear arms," but he contended that guns have to be regulated. As for cowboys carrying pistols, a dispatch from Laramie’s Northwest Stock Journal in 1884, reported, "We see many cowboys fitting up for the spring and summer work. They all seem to think it absolutely necessary to have a revolver. Of all foolish notions this is the most absurd."

Cowboy president Theodore Roosevelt recalled with approval that as a Dakota Territory ranch owner, his town, at the least, allowed "no shooting in the streets." The editor of that town's newspaper, The Bad Lands Cow Boy of Medora, demanded that gun control be even tighter than that, however. Like leaders in Miles City and many other cow towns, he wanted to see guns banned entirely within the city limits. A.T. Packard in August 1885 called "packing a gun" a "senseless custom," and noted about a month later that "As a protection, it is terribly useless.”

Old West cattlemen themselves also saw the need for gun control. By 1882, a Texas cattle raising association had banned six-shooters from the cowboy's belt. "In almost every section of the West murders are on the increase, and cowmen are too often the principals in the encounters," concurred a dispatch from the Texas Live Stock Journal dated June 5, 1884. "The six-shooter loaded with deadly cartridges is a dangerous companion for any man, especially if he should unfortunately be primed with whiskey. Cattlemen should unite in aiding the enforcement of the law against carrying of deadly weapons."

It's time for America to grow up, and realize that guns, particularly hand guns, don't make us safer, they actually make us less safe. You are more likely to be killed by your own hand gun than you are likely to use it to protect yourself or your family.  In 2010 there were only 230 justifiable homicides involving a private citizen using a firearm reported to the F.B.I.’s Uniform Crime Reporting Program. Compare that with the number of criminal gun homicides in the same year: 8,275. (That’s not counting gun suicides or unintentional shootings.) Or compare it with the number of Americans killed by guns since Newtown:  3,458.

In the end, I think that the citizens of this country need to decide what kind of country they want to live in.  One where we protect the right of every person to carry a gun, without any kind of control, or a country where it's safe to send our children to school? A country where people can go to a Mother's Day parade, and not worry about being shot at, or one where the NRA (read gun lobby) makes sure that the profits of the gun manufacturers are ever increasing What's more important, the safety of our children, or corporate profits, it's time to decide.

The Two Santa Claus Theory

Odds are you've never heard of Jude Wanniski, but without him Reagan never would have become a "successful" president, Republicans never would have taken control of the House or Senate, Bill Clinton never would have been impeached, and neither George Bush would have been president.
When Barry Goldwater went down to ignominious defeat in 1964, most Republicans felt doomed (among them the then-28-year-old Wanniski). Goldwater himself, although uncomfortable with the rising religious right within his own party and the calls for more intrusion in people's bedrooms, was a diehard fan of Herbert Hoover's economic worldview.

In Hoover's world (and virtually all the Republicans since reconstruction with the exception of Teddy Roosevelt), market fundamentalism was a virtual religion. Economists from Ludwig von Mises to Friedrich Hayek to Milton Friedman had preached that government could only make a mess of things economic, and the world of finance should be left to the Big Boys – the Masters of the Universe, as they sometimes called themselves – who ruled Wall Street and international finance.

Hoover enthusiastically followed the advice of his Treasury Secretary, multimillionaire Andrew Mellon, who said in 1931: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down... enterprising people will pick up the wrecks from less competent people." Thus, the Republican mantra was: "Lower taxes, reduce the size of government, and balance the budget."

The only problem with this ideology from the Hooverite perspective was that the Democrats always seemed like the bestowers of gifts, while the Republicans were seen by the American people as the stingy Scrooges, bent on making the lives of working people harder all the while making richer the very richest. This, Republican strategists since 1930 knew, was no way to win elections.

And so after Goldwater's defeat, the Republicans were again lost in the wilderness just as after Hoover's disastrous presidency. Even four years later when Richard Nixon beat Hubert Humphrey in 1968, Nixon wasn't willing to embrace the economic conservatism of Goldwater and the economic true believers in the Republican Party. And Jerry Ford wasn't, in their opinions, much better. If Nixon and Ford believed in economic conservatism, they were afraid to practice it for fear of dooming their party to another forty years in the electoral wilderness.

By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections.

Everybody understood at the time that economies are driven by demand. People with good jobs have money in their pockets, and want to use it to buy things. The job of the business community is to either determine or drive that demand to their particular goods, and when they're successful at meeting the demand then factories get built, more people become employed to make more products, and those newly-employed people have a paycheck that further increases demand.

Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.

At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!
Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.

Ronald Reagan was the first national Republican politician to suggest that he could cut taxes on rich people and businesses, that those tax cuts would cause them to take their surplus money and build factories or import large quantities of cheap stuff from low-labor countries, and that the more stuff there was supplying the economy the faster it would grow. George Herbert Walker Bush – like most Republicans of the time – was horrified. Ronald Reagan was suggesting "Voodoo Economics," said Bush in the primary campaign, and Wanniski's supply-side and Laffer's tax-cut theories would throw the nation into such deep debt that we'd ultimately crash into another Republican Great Depression.

But Wanniski had been doing his homework on how to sell supply-side economics. In 1976, he rolled out to the hard-right insiders in the Republican Party his "Two Santa Clauses" theory, which would enable the Republicans to take power in America for the next thirty years.

Democrats, he said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too – spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.

There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

When Reagan rolled out Supply Side Economics in the early 80s, dramatically cutting taxes while exploding (mostly military) spending, there was a moment when it seemed to Wanniski and Laffer that all was lost. The budget deficit exploded and the country fell into a deep recession – the worst since the Great Depression – and Republicans nationwide held their collective breath. But David Stockman came up with a great new theory about what was going on – they were "starving the beast" of government by running up such huge deficits that Democrats would never, ever in the future be able to talk again about national health care or improving Social Security – and this so pleased Alan Greenspan, the Fed Chairman, that he opened the spigots of the Fed, dropping interest rates and buying government bonds, producing a nice, healthy goose to the economy.

Greenspan further counseled Reagan to dramatically increase taxes on people earning under $37,800 a year by increasing the Social Security (FICA/payroll) tax, and then let the government borrow those new-found hundreds of billions of dollars off-the-books to make the deficit look better than it was.
Reagan, Greenspan, Winniski, and Laffer took the federal budget deficit from under a trillion dollars in 1980 to almost three trillion by 1988, and back then a dollar could buy far more than it buys today. They and George HW Bush ran up more debt in eight years than every president in history, from George Washington to Jimmy Carter, combined. Surely this would both starve the beast and force the Democrats to make the politically suicidal move of becoming deficit hawks.

And that's just how it turned out. Bill Clinton, who had run on an FDR-like platform of a "new covenant" with the American people that would strengthen the institutions of the New Deal, strengthen labor, and institute a national health care system, found himself in a box. A few weeks before his inauguration, Alan Greenspan and Robert Rubin sat him down and told him the facts of life: he was going to have to raise taxes and cut the size of government. Clinton took their advice to heart, raised taxes, balanced the budget, and cut numerous programs, declaring an "end to welfare as we know it" and, in his second inaugural address, an "end to the era of big government." He was the anti-Santa Claus, and the result was an explosion of Republican wins across the country as Republican politicians campaigned on a platform of supply-side tax cuts and pork-rich spending increases.

Looking at the wreckage of the Democratic Party all around Clinton by 1999, Winniski wrote a gloating memo that said, in part: "We of course should be indebted to Art Laffer for all time for his Curve... But as the primary political theoretician of the supply-side camp, I began arguing for the 'Two Santa Claus Theory' in 1974. If the Democrats are going to play Santa Claus by promoting more spending, the Republicans can never beat them by promoting less spending. They have to promise tax cuts..."

Ed Crane, president of the Libertarian CATO Institute, noted in a memo that year: "When Jack Kemp, Newt Gingich, Vin Weber, Connie Mack and the rest discovered Jude Wanniski and Art Laffer, they thought they'd died and gone to heaven. In supply-side economics they found a philosophy that gave them a free pass out of the debate over the proper role of government. Just cut taxes and grow the economy: government will shrink as a percentage of GDP, even if you don't cut spending. That's why you rarely, if ever, heard Kemp or Gingrich call for spending cuts, much less the elimination of programs and departments."

George W. Bush embraced the Two Santa Claus Theory with gusto, ramming through huge tax cuts – particularly a cut to a maximum 15 percent income tax rate on people like himself who made their principle income from sitting around the pool waiting for their dividend or capital gains checks to arrive in the mail – and blowing out federal spending. Bush even out-spent Reagan, which nobody had ever thought would again be possible.

And it all seemed to be going so well, just as it did in the early 1920s when a series of three consecutive Republican presidents cut income taxes on the uber-rich from over 70 percent to under 30 percent. In 1929, pretty much everybody realized that instead of building factories with all that extra money, the rich had been pouring it into the stock market, inflating a bubble that – like an inexorable law of nature – would have to burst. But the people who remembered that lesson were mostly all dead by 2005, when Jude Wanniski died and George Gilder celebrated the Reagan/Bush supply-side-created bubble economies in a Wall Street Journal eulogy: "...Jude's charismatic focus on the tax on capital gains redeemed the fiscal policies of four administrations. ... [T]he capital-gains tax has come erratically but inexorably down -- while the market capitalization of U.S. equities has risen from roughly a third of global market cap to close to half. These many trillions in new entrepreneurial wealth are a true warrant of the worth of his impact. Unbound by zero-sum economics, Jude forged the golden gift of a profound and passionate argument that the establishments of the mold must finally give way to the powers of the mind. He audaciously defied all the Buffetteers of the trade gap, the moldy figs of the Phillips Curve, the chic traders in money and principle, even the stultifying pillows of the Nobel Prize."

In reality, his tax cuts did what they have always done over the past 100 years – they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people.

The Republicans got what they wanted from Wanniski's work. They held power for thirty years, made themselves trillions of dollars, cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 8 of the non-governmental workforce today, and left such a massive deficit that some misguided "conservative" Democrats are again clamoring to shoot Santa with working-class tax hikes and entitlement program cuts.


The Two Santa Claus theory isn't dead, as we can see from today's Republican rhetoric. Hopefully, though, reality will continue to sink in with the American people and the massive fraud perpetrated by Wanniski, Reagan, Laffer, Graham, Bush(s), and all their "conservative" enablers will be seen for what it was and is. And the Obama administration can get about the business of repairing the damage and recovering the stolen assets of these cheap hustlers.

To Washington - IT'S THE JOBS STUPID!!!

I've been sitting here for the past few months watching the Republican's and the Democrats argue about what the best way to cut spending is, and I'm sick of it. Neither party seems to get it, IT'S THE JOBS, STUPID!

Do we need to fix our debt problem, sure we do. But it's not a crisis. The lack of jobs, on the other hand IS a crisis. 9.1% unemployment is unacceptable.

Again, let me be clear - JOBS! We need more JOBS!!!!!!!!

... and just in case you didn't hear me in Washington, JOBS!!!! Worry about JOBS!!!!!

BTW, I predict that taking trillions of dollars out of our economy right now will probably turn our anemic growth upside down and drive us back into recession, or at best lock us into anemic growth for the foreseeable future. But that's another subject, lets get back to the JOBS!

What amazes me is that while the American people have shown in poll after poll that they get it. That the fools in Washington appear to be blind to the obvious reality that WE NEED JOBS! Not tax cuts, not reductions in spending that will make the situation worse, not to fiddle around with Social Security and Medicare, WE NEED JOB!

It doesn't matter who creates them at this point. We are a consumer based economy, and right now, people aren't consuming enough to create the kind of growth we need in the economy to get us out of the 9.1% unemployment rate we seem to be stuck in. BTW, cutting government spending, and laying off teachers, firemen, and cops only makes the situation worse, not better. Also, if I hear one more idiot say "government jobs don't count" I may just lose my mind. EVERY JOB COUNTS, and when the private sector isn't creating them, government has to step in. But at the very least, we shouldn't be making the situation WORSE, you morons!!!!! Every "government employee" that loses their job because of these stupid spending cuts (are you listening state government, this includes you as well) is one less consumer that's buying things. That means less spending, and a shrinking economy.

Again, the American people get that, why is it that Washington (and now many of the states) don't? It seems like we are caught up in some kind of fundamentalist religious fever that won't let us do the right thing because it runs contrary to some silly pseudo religious doctrine about the size of government.

But I think that Washington better wake up, because the middle class is starting to get it. Again, the polls show that people in the middle class understand that they are getting the shaft from Washington (and the states), and they are getting tired of it. Right now, it's a pox on both their houses as far as many of us are concerned. However, the first political party that wakes up and smells the coffee will reap the rewards. The first party that realizes that it's time to stand up, and tell it like it is, and stand for the middle class against the rich, and the corporations that are running this country, will wipe out the other party. But it takes guts to do that, because when they do, the campaign donations from those very same rich and corporations will not only dry up, they will flow to their opponent, and that's the problem. Until we fix how we fund political campaigns in this country, the rich and the corporations will continue to have a stranglehold on our politicians, and therefore our government. BTW, Mitt Romney said today "corporations are people" ... *aaaahhhhh"

Personally, I hope that it's the Democrats that wake up, and certainly they are closer to being able to do that than the Republicans who seem to be wholly owned by the rich and corporate America. But don't get me wrong, the Democrats have for years thought that by moving to the "middle" (which means to the right) that they have a better chance of getting elected since it's only the corporations and the rich that can provide them the money they need for their campaign war chests. The Unions used to be a good counter balance, but the Republicans have done an excellent job of reducing their ability to fight back, and are currently trying to deliver the death blow to the Unions. So where does that leave us? With two parties, the Republican Party which has moved so far to the right that you can hardly even see them any more WAY over there, and the Democrats, which have become Republican Light. Nether of the two parties represent the people any more, they just represent the monied interests that fill their campaign coffers with lots of money so that they can get elected. In the end, both parties represent the same interests, and it's not the interests of the people, especially not the middle class and/or the poor.

What I want to know is what happened to "government of the people, buy the people, for the people, shall not perish from the earth"? The man who said that was a Republican! One who is, I suspect, spinning like a top in his grave considering that his party has become the part of the rich and the corporations, not the party of the people.

So, bottom line is that we will continue to have high unemployment, and slow growth, until we can get the money out of politics, and do what's right for the people (middle class) instead of being led around by the nose by the money of the rich and the corporations. We need to make it so that they can't buy our elections anymore, and we need to ensure that they create jobs in this country instead of in China. Until we do, we are sunk.

Finally, we reap the bitter harvest from the garden of fear and hate.

I sat in horror yesterday watching unfold what I knew would eventually happen, but was afraid to admit, even to myself, was inevitable. Some elements of our society have, for years, been stoking the ovens of fear for political gain. Finally it happened. This garden of fear, and hate, and divisiveness has produced it's harvest, and it's a bitter one. At last report, 6 dead, many more wounded, and a Congresswoman fighting for her life.

If you are one of those who used fear for political gain, you have the blood of an innocent 9 year old girl on your hands this morning. You know who you are, but pointing you out just means I'm doing the same thing. I won't stoop to your level and use your tactics. What I will say, is that it's got to stop. That television networks that allow the kind of misinformation and fear, and hate, and vitriol that we have heard over the last couple of years need to be shut down. Radio programs that broadcast the same thing, and sometimes worse, need to be shut down. Not by the government, but by those people in this county who have had enough.

We need to stop them, not by violence either, but by the simple act of shunning. By the American people saying "enough already" with the Hitler references, enough already with the references to "second amendment remedies", stop with the "he's a communist" diatribes, and simply turn it off. It's easy, really, these are all commercial entities, which need sponsors to pay for their programs, and if we all just turn them off, they will quickly cease to exist.

To those politicians who are using fear for political gain, I say the American people are better than that. That I have faith that they can see through what you're doing. That your control over us must come to an end! That in the next election, you will be shown the door and told "thanks but no thanks". I believe in the innate goodness of the American heart. That in the end, we know that we are all in this thing together, and that we will pull together and help each other. That we will turn away from the fear, and the anger, and the hate, and repudiate those who use those tools to try and control us.

Watch out, it' a trap!!!!

You know, it sometimes amazes me how completely out of touch everyone in Washington really is. I'm not just talking about the politicians either. I'm talking about everyone, including the media. You know who I'm talking about, those inside the beltway reporters who don't have a clue what the ordinary person in this country is going through right now. They are so tied to the even less in touch politicians in Washington, that they are completely missing out on the biggest news story in quite some time.

What is that story you ask? It's the gigantic trap that the Republicans have set for the President and the Democrats with this new "compromise" on taxes that the President negotiated with the Republicans. When did we elect Charlie Brown as our President? And when did the Republican party become Lucy?

Seriously, can't the President see what's coming? It's as clear as a bell to me. First the Republican, who are supposed to be SOOOOOOOO concerned about the deficit, hold everything hostage to getting $700 billion in tax cuts for the wealthy which are unfunded, and so would increase the deficit. With a deadline looming, the President foolishly agrees to a "compromise" where it's only for 2 years. Note that this puts the argument about what to do about this newest round of tax cuts right in the middle of the next Presidential elections.

What that means is that they are going to get extended again, because no one wants to be seen as raising taxes in an election year. So, anyone who thinks that these ridiculously expensive, economically foolish tax cuts for millionaires and billionaires aren't going to get made permanent is a fool. So, there's part one of the trap. These tax cuts for millionaires and billionaires are going to end up permanent.

Part two of the trap is even more ingenious. Now that the Republican have fooled us all into borrowing trillions of dollars from the Chinese over the next 15 or 20 years so that Millionaires and billionaires can have their tax cuts which will do NOTHING for the economy, the second part of the trap springs. The second part of the trap is that we will be running HUGE deficits. So they will start screaming how we are going to have to make "sacrifices" so we can get a balanced budget or economy will get wrecked. Of course what they won't tell you is that it's these tax cuts that will be the biggest part of that same deficits that they are now complaining about.

Guess where they are going to want those "sacrifices" to come from? Yup, you guessed it it's from us in the middle class and the poor. They are going to tell us all how we just can't afford those expensive Social Security and Medicare programs any more so "sacrifices" will have to be made.

What they mean by "sacrifices" is that they will bump up the retirement age, probably to 72 or higher. They will cut Medicare benefits, and force older workers to continue to be robbed blind by their friends in the private health insurance companies until at least age 72 if not older. Of course, what they would really prefer is to eliminate Social Security all together so that old people can go back to just eating cat food until they die like they did before Social Security was passed. Of course we will save a lot of money because they will die sooner, not only from the malnutrition, but because they won't be able to afford the same kind of quality health-care that the millionaires and billionaire that their tax dollers were given to can afford.

Just gutting Social Security and Medicare won't be enough for these folks, they will go after every solcial program we have because it will be the only way that, short of raising taxes, that we will be able to address the huge deficit we have due to the stupid tax cuts we gave to millionaires and billionaires.

So, what should we do, you ask? First of all, the people of this country need to wake up to the fact that class warfare is being waged against them. That the biggest transfer of wealth in history is happening right under our noses. That transfer of wealth is from the middle class and the poor who actually create all of the wealth in this country, to the rich, who do nothing to add to the wealth in this country.

Once the people wake up and realize what is being done to them, then we can get some real change going. Here's a few ideas about what we can do:

1. We need to increase taxes on the wealthy so that they pay their fair share and the middle class and the poor can get their fair share of the wealth that they create.

2. We need to get control over the Corporations in this country so that they stop robbing us all blind. This includes stopping them from shipping our jobs overseas with such great abandon.

3. We need to get an even playing field back when it comes to politics by stopping the rich and the Corporations from buying our elections.

4. We need to revamp our education system so that we can have a truly informed electorate. The absolute ignorance of the ordinary American voter is amazing.

5. We need to get rid of the propaganda machines in the right wing media like Fox News and people like Rush and Beck. This is easy to do if we simply pass FCC regulations against knowingly lying over the airwaves. The amount of misinformation spewed on a daily basis by these people is just unbelievable. Making people pay a price for spreading misinformation by fining the stations every time they say something that isn't true would put a stop to their hate filled propaganda in a big hurry.

6. Start building stuff again! We don't make anything in this country any more. We need to put in place trade agreements and policies that make it more attractive for companies to make stuff in this country again. This doesn't mean cheaper, since there's no way that American workers can compete on pure price (we make $15 per hour, Chinese make $.05). We need to make it more expense to bring foreign goods into the US while at the same time making our goods more competitive overseas. So, for example, we can make deals with the Chinese that say something like as long as our trade balance is neutral, everything is OK (i.e. as long as we are selling as much to them as they are selling to us). The second they get more of the pie, tariffs kick in to bring things back into balance. Finally, we make it financially unattractive for foreign companies to own factories, and companies in general here in the US. We can do this by taxing the heck out of any corporate profits that leave the US.

7. We return the Unions to power in this country so the workers have a balance against the corporate interest. We do this by forming unions in every workplace so that workers have a voice, and by giving a couple of seats on the board of every company to the unions that represent the workers at that company. BTW, I'm not just talking about manufacturing here. I'm talking about unions for every worker including white collar workers.

Now I know that my friends on the right are going to scream how all of my recommendations are "unconstitutional". But there's nothing in our Constitution that says that we have to be Fundamentalist Capitalists. I think a little protection for the ordinary working people of this country is very Constitutional.

But you know what I think is "unconstitutional"? Taking money from the middle class and giving it to the rich so they can buy another Mercedes. Taking jobs from American workers and shipping them over seas. Letting ordinary working people die so that the health-care corporations can make more profits. Forcing old people to eat cat food while the rich just get richer. Destroying the middle class in this country so that the corporations can make bigger and bigger profits. Turning this country into a third world country. THATS what *I* think is "unconstitutional". That's what *I* think is Un-American. That's what *I* think every poor and middle class person in this country should be fighting against. But those are all things that are going to happen to us all of we continue to be fooled by the right-wing propaganda machine into voting against our own best interests and we continue to elect people who aren't interested in helping the ordinary working person in this country. People who are only interested in protecting the rich and corporate profits and don't give a rats ass about the poor and the middle class.

The Greed Of The Rich Is Hurting The Middle Class

It's been a while since I've posted something on here. Works has been pretty crazy, and politics has had to take a back seat. But I'm just fed up with the Republican echo chamber repeating their BS over and over again.

So, lets start with some fact, not the BS made up by the idiots on Fox News.

1. The top 1% of American earners took 23.5% of the pre-tax money on 2007.
2. From 2002 to 2007 the pre-tax income of that 1% rose 10% each year.
3. At the same time pre-tax income for middle America went down and the poverty rate increased.
4. Extending the tax cuts for these rich would cost our economy $700 billion.

Do you see anything unfair about these numbers?

So, what's about to happen in Washington? Yup, you guessed it, the super rich are going to get a ton of money that we are going to borrow form the Chinese.

For the past thirty years the rich have been waging war on the middle class. It’s been astonishingly effective, partly because it has been undeclared. But even that pretense is now being abandoned. The President’s National Deficit Commission has effectively declared that the rich will now go after what is left of working and middle class wealth and will take whatever steps are necessary to seize it. If allowed to succeed, their plan will reduce Americans to a state of serfdom.

Ronald Reagan began the war on the middle class with his “supply-side” economics. Its very purpose, according to David Stockman, Reagan’s Budget Director, was to transfer wealth and income upwards. It cut the marginal tax rate on the highest income earners from 75% to 35% while dramatically expanding spending for war. The results were two-fold: massive federal debt and an astonishing rise in the share of income and wealth going to those who were already the wealthiest people in the world.

The national debt quadrupled between 1980 and 1992. George W. Bush would repeat Reagan’s policies and double it again between 2000 and 2008. Meanwhile, the share of national income going to the top 1% more than doubled, from 9% to 24%. The share going to the top one-tenth of 1% of income earners more than tripled. We now have the most unequal distribution of income in the developing world and the inequality is growing rapidly.

Shifts of this magnitude over such short periods of time have never been seen in American history. With the rich getting much, much richer, its means that everybody else is getting poorer. And in fact, real wages for median workers are lower today than they were in 1973. Indeed, while the inflation-adjusted income of the bottom fifth of workers fell by $6,900 between 1979 and 2007, the top 1% saw its annual income increase by $741,000!

To try to keep up with living standards Americans resorted to debt. They increased their personal debt-to-income ratio from 62% in 1980 to 130% in 2008. When housing prices fell 35% nationwide in the recent collapse it left Americans with a smaller share of equity in their homes, 48%, than at any time since the Great Depression. The share they have lost has been taken by the banks.

In other words, all of the income and wealth gains for middle Americans from the “golden years” between 1945 and 1975 have now been wiped out. Or more accurately, have now been transferred to the very rich. The top 1% holds 34% of the nation’s wealth while the bottom 50% holds just 2.5%. The bottom 40% owns absolutely nothing.

These effects and numbers can be numbing, even dizzying. But it’s important to understand that they have not been the result of random events or impersonal market forces. Rather, they have followed as the intended consequences of the relentless application of a wide array of government and industry policies.

The massive run-up in debt is one such policy. The wealthy are net lenders. This means that massive public and private debt transfers interest income to them from the rest of the economy. Another method for effecting massive wealth transfer: Beginning in 1981 the Reagan administration effectively stopped enforcing anti-trust laws, allowing monopolies to gouge everyone who had to buy their products.

The government actually provided tax subsidies so that corporations could eliminate jobs in the industrial heartland and ship them to Mexico and later, China, India, and other low-wage countries, reducing wages and pitting American workers against each other for those jobs remaining.

The bank deregulation that began in the early 1980s reached its apex with the repeal of the Depression-era Glass-Steagall Act in the late nineties. This set up the “casino capitalism” of the next decade that would spawn massive criminality and mortgage fraud by the nation’s leading banks—none of which has been prosecuted. The result was the greatest economic collapse since the Great Depression.

But even as more than five million homeowners have lost their homes, the wealthy had their losses covered by the Bush and later Obama administrations. Bloomberg news estimates that the transfer to the banks through the financial bailout comes to some $13 trillion dollars.

We could go on and on and on with the roster of ways the wealthy have used the government to transfer national wealth to themselves. Environmental and health laws that are not enforced. Deals with the pharmaceutical industry so they don’t have to compete with foreign manufacturers. Health care “reform” that forces tens of millions of Americans to buy questionable insurance products, even as insurers continue to kick legitimate claimants off their rolls. Give-aways of the telecommunication spectrum worth hundreds of billions of dollars to media monopolies that ladle out state propaganda as if were news and never, ever challenge official narratives.

In these and a thousand other ways, the rich have conspired with the government they largely control to shift more and still more of the nation’s wealth away from the working and middle classes, to themselves. It amounts to the most insidious class warfare and the most rapacious looting of public and private resources in the history of the world.

The result is vast impoverishment, demoralization, and the destruction of the American middle class. One out of eight Americans are on food stamps. One out of five people are in official poverty. One out of four children are raised in poverty. Twenty five million people cannot find enough work, while their skills atrophy and their families and communities are destroyed. These are not figures describing a banana republic, a disaster-stricken region, or a third world country. They describe the United States of America after three decades of plunder by the rich. And now they want to go in for the kill.

Not satisfied with the staggering wealth they have already siphoned away, the ultra-rich are now using Barack Obama’s National Deficit Commission to propose even more brazen plunder. And the looting is no longer taking place behind closed doors or under the cover of arcane public policies.

The commission proposes to cut the federal government’s budget deficit by $4 trillion over the next decade. But 75% of the “savings” will come from gutting programs that help stabilize the middle class and their communities. None of it comes from policies that would harm the rich.

For example, the commission proposes cutting the tax deduction for mortgage payments. Not only will this render housing much less affordable for millions of prospective home buyers, it will reduce housing prices, perhaps substantially, for without the tax writeoff, buyers will be able to afford much less house. This will decimate the sole source of wealth of tens of millions of Americans.

It is housing wealth that undergirds retirement security for the middle class. Or, at least it did until one out of four homeowners went underwater on their mortgage in the recent bank-triggered collapse. Then, even as the Commission plans to decimate home prices and owner equity, it proposes cutting back benefits to Social Security recipients.

It would lower Social Security cost-of living adjustments while raising the minimum retirement age. And this is being proposed at the very moment that the bank-owned Federal Reserve Board is beginning to print hundreds of billions of dollars to bail out the banks from what’s left of their toxic assets still held from the housing crash.

The ensuing inflation is going to destroy the value of retirement incomes at exactly the moment that 77 million baby boomers head off into retirement. It was exactly this process of money printing and bankrupting of retirees that destroyed the German middle class in the early 1920s, giving rise to Adolph Hitler.

The Commission’s proposals would increase co-pays and deductibles for Medicare, making it unaffordable to millions. It proposes taxing as income the health insurance benefits millions receive from their employers. The Child Tax Credit would be eliminated as would 10% of all federal government jobs. This, at a time when more than 20% of the workforce is already underemployed and there are five workers trying for every available job.

We should be crystal clear: these policies amount to a mortal assault on what remains of middle class solvency and the democracy that a vibrant middle class makes possible.

But even as it girds up for this assault, the Commission barely touches the ultra-rich on whose boards they serve and who have gained so much over the past 30 years. And it cannot go without being said that it was these same professional predators who actually wrecked the economy, pitching it into its greatest collapse since the Great Depression.

The Commission’s proposals would actually lower the maximum tax on the highest income earners, from 35% to 24%. The nominal tax rate on corporate income would fall as well, from 35% to 26%. There is nothing proposed to raise taxes after so many decades of steadily amassed wealth. No financial transactions tax (as the IMF recommends) to stanch the kind of tsunami of speculative buying and selling that brought down the economy. Such a tax would raise over $700 billion over the next decade.

Of course, there will be no claw-backs of the trillions of dollars transferred to the rich under the phony duress of “saving the system” during the height of the financial crisis. No proposal that the cap on earnings subject to Social Security withholding should be removed. That proviso alone would raise more than half a trillion dollars over the next decade.

In fact, it is in comparison with other give-aways to the rich that the take-aways from the middle class by the Commission can be seen as so one sided and venal. Remember, they propose to save $4 trillion over 10 years.

But the war in Iraq, which we now know was entirely premised on lies, will cost more than $5 trillion, according to Nobel economist Joseph Stiglitz. It has proven a huge boon to the rich weapons makers, bankers, logistics companies and oil companies that Bush used to coddle as his “base.”

As mentioned above, Bloomberg news estimates that the financial bailout cost some $13 trillion, all of it going to the very richest people on the planet. There is not a syllable in the Commission’s report proposing getting any of that back to help reduce the deficit.

Or consider the notorious Bush tax cuts of 2001 and 2003 where fully 40% went to the top 1% of income earners. Obama once promised to overturn them but, as is his typically cowardly pattern, is now folding. The Center on Budget and Policy Priorities has estimated that they will cost the government more than $18 trillion over their lifetime—four times what the Deficit Commission claims it will achieve in savings. But God forbid we should ask for even a penny of that back to help battle the deficit.

In other words, there are many, many substantial and just ways that the savings the Commission proposes to create could be secured via small contributions from those who have gamed the system and gained the most over the past three decades. But that is not the Commission’s plan. And it is in that omission that its true intent is revealed.

There is no more time for stealth, no more need for subtlety. Western capitalist economies are declining at a pace that is frightening their elite stewards and compelling such desperate, slovenly measures as the wholesale printing of money to postpone the inevitable. While Obama sings lullabies of “hope” and “change” to tranquillize the suckers out front, the rich are backing the truck up to the vault in the back, no longer even deigning to disguise the heist. And of course, why should they? They have the additional diversion of the moronic Tea Party vigilantes (“Keep the government out of my Medicare”), ever ready to cut other people’s throats to cure their own nosebleeds.

The Commission’s proposal is the most naked, undisguised declaration of class warfare possible. Its agenda is not to reduce the deficit but rather to reduce what is left of the American middle class and American workers, to a condition of servitude, of feudal peonage. Their poverty will make them docile and subservient. This will make possible the final looting of America by those whose sociopathic greed has brought it so low already. The battle over this proposal is the last bulwark against the devastation and final destruction of America. It must be fought and won or our freedom and security ceded forever. There is no other choice.