Submitted by: Mike Spindell, Guest Blogger
Normally, when I work on a guest blog it takes me some hours of research and writing since I type slowly and try to be as accurate as I can be. This one will be a little different because it is written mainly to refer you to the transcript and/or podcast of a fantastic interview with the investigative journalists Donald L.Bartlett and James B. Steele. The interview was conducted by Rob Kall, whose OpEdNews website http://www.opednews.com/ is one that I look to for interesting insight into the political issues of the day. The interview deals with these authors’s current book which is called: The Betrayal of the American Dream”.
Rob Kall’s interview with the author’s is lengthy and so rather than my usual effort to provide a synopsis and relevant quotes of a position that I endorse, I’m going to give you a hint of what this interview contains and the provide you the links so that you can make your decision on the author’s thesis and hopefully be informed on some very important issues for all of us. Readers here know I supported President Obama for re-election, but have been critical of many of his policies. This interview and the book that it is about, demonstrate that the forces at play in the rapid decline of the American Middle Class seem beyond the power of our government to control, simply because they are backed by an elite that not only finances election campaigns, but that has also dominated the discussion with so much false propaganda, that today’s politicians who were born later than 1960 are not even familiar with the reality of how much our economic landscape has changed. Because of this unfamiliarity many don’t even have the conceptualization that things used to be different and why they’ve changed so drastically. In that sense this is less about conspiracy and more about the effect poor education, corporate media and propaganda can accomplish. When I say that the problem is beyond government’s power to fix, it is with the caveat that if the issues presented here were first understood, then maybe we could combat them. In some sense we are all blind men, hypothesizing the nature of an elephant by touching different parts. This interview and the book it is about can miraculously cure the blindness and start the discussion on how we can deal with this 3,000 pound elephant in the room we call America.
I will mention two, among many, of the major factors in the decline of the American Middle Class laid out by the authors. The first is that until the 1970’s our Income Tax was really graduated to the point that government had ample revenue to do its job. The second is that one of the major revenue sources for the Federal Government was tariffs. It was the dismantling of the graduated Income Tax and the proliferation of trade agreements reducing tariffs (and tariff revenue) that have been major pieces in the shipping of jobs overseas, increasing our national debt and destroying what was the greatest industrial economy in the World. For me, a child born to politically aware parents, before the end of World War II, I’ve lived through this history and watched in dismay as these changes took effect. Most Americans though, except for those most prescient, have no idea of what was done, simply because these changes took effect before they were born, or in their early youth. This election past and the polling of attitudes that went with it, show that the majority of Americans perceive that they are being cheated, but often their perception of how, has been skewed by the disinformation that is rampant to the extent that they blame it on the wrong source. If you read either the transcript of this article: “The Selling Out of the Middle Class is No Accident” at this link: http://www.opednews.com/articles/1/The-Selling-Out-of-the-Mid-by-Rob-Kall-121017-79.html or listen to the interview at this podcast: http://www.opednews.com/Podcast/Applying-Investigative-Jou-by-Rob-Kall-120915-680.html
I deeply believe that it will be time well spent.
@feemeister: I have always wondered WHY we should penalize people BECAUSE they are lucky enough to make more money.
As one of those lucky enough to have made more money than most, I will answer. Because it is not the dollar amount or a percentage of income that matters when we consider matters of fairness, but the effects. If a man makes a hundred million dollars in a year and is taxed at 50%, he is left with fifty million. His lifestyle, his homes, his jets, his entertainment, his food, everything about his life is left the same; all that has changed is a number in his bank account. He experiences no hardship, he need sacrifice nothing.
Even his business does not suffer, because an income tax is only applied to what is left over AFTER all his business expenses, including his expenses for expansion, maintenance, and any salaries or recruitment costs or training costs or housing costs for any jobs he feels the need to create.
Compare that to somebody in the lower middle class (according to this book, earning $35K a year). A 50% tax on their income has a devastating effect on their lifestyle. Even if there were an exemption of $30K, they WILL have to sacrifice something. The deficit created of $200 less per month in discretionary income means less entertainment, less quality food, less quality transportation, more penny pinching.
The point is not to equalize the dollar amount; the poor would be reduced to negative income if that were the point, it is an unworkable scheme. The point is not to equalize the percentage amount; because that creates more pain at the bottom than it does at the top. The point is to be fair and equalize the PAIN of taxation, to better equalize the pain of supporting a necessity, which is the government protecting us from human predators, both internal and external.
You claim some are “lucky” enough to earn a lot, and I won’t argue. Luck played a huge role in my success, beginning with the genetic luck that gave me a pretty rare talent in very high demand.
But if luck is what drove their success, why does winning the lottery of life with a free ticket entitle them to any less pain than those that did not win? If a lottery winner found their million dollar ticket, they didn’t “work” for that money, they didn’t “sacrifice” for it. It is free money; it isn’t “deserved.”
I think the same is true in business (and I was a business consultant for decades). I worked harder as a dishwasher and janitor and laborer (and hated it more) than I ever worked in the military, college or business. I do not begrudge the businessmen their money as long as that money is not derived from mistreating employees, ripping off or defrauding customers or investors, or cheating on their taxes or hurting the public by destroying the environment. (Hollywood is a good model, they can and have made tons of money without having to do any of that.)
But I recognize that they (and I) did not work or labor any harder for our high salaries than the janitor cleaning our restrooms or the dishwasher cleaning up after our meals. In fact, having worked with the bottom as a teen and with the top as an adult, I think I have the perspective to say the top worked less, and labored less, and hated it less because our work was more engrossing and had more impact.
The difference is the luck of life’s lottery. That is an apt metaphor, because nature and life can be random and arbitrary and breathtakingly unfair. I do believe it is luck, if nothing else the genetic luck of being born with high intelligence, or creativity, or a talent for art or sports or singing, or charisma, or beauty, or the emotional discipline to postpone gratification. The geographic luck of being born in a country where those things matter. The temporal luck of being born in a century where those things matter. The social luck of being born in a society where those characteristics can overcome class and reap out-sized rewards. The random luck of being assigned to a middle school teacher with the perfect life experience to recognize a rare talent and redirect a life. Heck, even the random luck of being born a tall white male in a time when THAT matters.
Fairness is a concept that must be imposed upon nature, and although I am a capitalist that believes in competition and the survival of the fittest products and services, I also believe in progressive taxation: That the more fortunate a person is in the financial lottery of life, the more one owes to the least fortunate in society. Not to make them financially equal (and I do not believe communism works), but to relieve the suffering of the bad hand that nature, life, accident and circumstance have dealt them. Luck gets you lots of discretionary money. Bad luck may mean somebody cannot earn any discretionary money, but it should not mean sickness, pain, suffering or despair, especially not to reward the lucky with even more money.
“Bad luck may mean somebody cannot earn any discretionary money, but it should not mean sickness, pain, suffering or despair, especially not to reward the lucky with even more money.”
Tony,
Your entire comment made the point of the need for the graduated income tax eloquently and elegantly.
Bron,
There is too much incentive to use loopholes to send money to “religious” charities that are not much more than a front to launder money (think Mitt Romney), send money to offshore tax havens, and simply spend on the executive offices rather than on the factory floor. I do think there should be an extra tax incentive for buying American made products. Buy that executive jet from Beechcraft or Cessna rather than from France. Same for the executive limousine. Unless it is built in the US, there should be little or no tax credit. That is something I feel strongly about. Our office only bought General Motors or Ford products and both airplanes I bought were built in Wichita, KS.
OS:
But why isnt that happening now?
idealist707 1, November 11, 2012 at 11:10 am
Resistance by some to the idea that oil is at the center helps me recall the recent citation of a “laughing Cheney who said that Iraqi oil would pay for the war”.
Everyone in Washington has said for years that the banks own the place.
And now we are told that banks only own debts.
So can we say the lifeblood of the nation is owned by BIG OIL? It unseated Nixon, to recall one deed.
Following its trail might be useful. I would think that many can name books which have done so. References?
=======================================
Here is a piece from Tom Dispatch:
(Dealing with Oil-Qaeda). A little carbon tax on oil-Qaeda would not be excessive now would it?
Bron,
I don’t have all the answers, but may have some insight. Given a choice of paying a tax and just salting the money away, human nature being what it is, they will probably opt for buying new stuff instead of making do with the old stuff. I have seen this up close and personal. Management running machines until they are literally dangerous, versus buying new state of the art equipment. Years ago, before the tax codes changed, we would meet with our accountant at the end of the year and he would make recommendations such as buying a new car, or new radios for the airplane. New copier and new computers. It was either improve our lives with new and better “stuff” or send the money to the US Treasury.
Resistance by some to the idea that oil is at the center helps me recall the recent citation of a “laughing Cheney who said that Iraqi oil would pay for the war”.
Everyone in Washington has said for years that the banks own the place.
And now we are told that banks only own debts.
So can we say the lifeblood of the nation is owned by BIG OIL? It unseated Nixon, to recall one deed.
Following its trail might be useful. I would think that many can name books which have done so. References?
nick:
yep.
Otteray Scribe:
“Structure the tax code to encourage investment in new equipment and expansion will be good for the economy.”
I have a question for you, why do you think people dont invest more now into expansion? We have deductions and depreciation. So why arent more people taking advantage now and in the past?
lottakatz 1, November 11, 2012 at 7:57 am
…
link to general info about regarding the study:
http://www.forbes.com/sites/bruceupbin/2011/10/22/the-147-companies-that-control-everything/
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Let’s not forget that The International Private Empire also controls the propaganda engines, the mainstream media.
On the same page as the Forbes piece you linked to, is a piece by his colleague who has a piece “The Four Companies That Control the 147 Companies That Own Everything“, which is rank propaganda designed to cover the trail.
He goes on to say:
(The Four Companies That Control). Remember that the study was done by non-American scholars and researchers and had a Zurich Switzerland locale about it.
I have a copy of the scientifically done and well researched paper in PDF format, about which your link says:
(Your Forbes Link, emphasis added). They can’t control the Zurich scientists, but they can publish a propaganda piece here in the U.S. media saying in essence that four financial institutions are the controllers.
As I said up-thread:
These plutocrats have been at this a long time and have created an entity with layers like an onion, and the core of it is layers and layers deep, the financial institutions that hold their money are the outer camouflage layers.
What produces the most money … fossil fuels … oil, gas, coal … the stuff the Energy Department called “the lifeblood of economy”.
The banks only hold the money that the pillar industries put in them, the banks do not create wealth, they hold it. Investment companies do not create the wealth, they invest it in companies that do.
Who had the power to move the headquarters of the by-far greatest military in the world today out of the nation “it belongs to”? Who had the power to move USCENTCOM to the middle east? What company moved down the street from them once that military HQ was moved out of the U.S. to Dubai?
It was an oil baron company, Halliburton.
The fossil fuel industry is at the core of The International Private Empire, and they can be resisted through the energies of global warming induced climate change resistance … the green, renewable, clean energy majority.
Bron, Bingo! You just described what I did prior to the tax cuts. I also bumped up the contribution to my employees retirement equal to myself. This evil small biz owner also paid his employees before paying himself when cash flow was bad. They never knew that, it’s just what you should do. This class warfare is antithetical to how I was raised, in a blue collar family.
Mike Spindell:
You know my feelings on the war, but I really dont think we did it for oil.
I am guessing an oil company would rather sell to civilians than to the military. I am guessing they get less per gallon selling to the government.
We could say that beef producers and boot producers benefited as well. As did ammunition plants and body armor manufacturers. Humvee did really well and so did Sikorsky. I think their are many companies which benefited. But America as a whole has suffered.
Thinking war benefits an economy is believing that all of the destruction of Hurricane Sandy is good for business. Frederic Bastiat showed this fallacy here:
1. The Broken Window
Have you ever been witness to the fury of that solid citizen, James Goodfellow,* when his incorrigible son has happened to break a pane of glass? If you have been present at this spectacle, certainly you must also have observed that the onlookers, even if there are as many as thirty of them, seem with one accord to offer the unfortunate owner the selfsame consolation: “It’s an ill wind that blows nobody some good. Such accidents keep industry going. Everybody has to make a living. What would become of the glaziers if no one ever broke a window?”
Now, this formula of condolence contains a whole theory that it is a good idea for us to expose, flagrante delicto, in this very simple case, since it is exactly the same as that which, unfortunately, underlies most of our economic institutions.
Suppose that it will cost six francs to repair the damage. If you mean that the accident gives six francs’ worth of encouragement to the aforesaid industry, I agree. I do not contest it in any way; your reasoning is correct. The glazier will come, do his job, receive six francs, congratulate himself, and bless in his heart the careless child. That is what is seen.
But if, by way of deduction, you conclude, as happens only too often, that it is good to break windows, that it helps to circulate money, that it results in encouraging industry in general, I am obliged to cry out: That will never do! Your theory stops at what is seen. It does not take account of what is not seen.
It is not seen that, since our citizen has spent six francs for one thing, he will not be able to spend them for another. It is not seen that if he had not had a windowpane to replace, he would have replaced, for example, his worn-out shoes or added another book to his library. In brief, he would have put his six francs to some use or other for which he will not now have them.
Let us next consider industry in general. The window having been broken, the glass industry gets six francs’ worth of encouragement; that is what is seen.
If the window had not been broken, the shoe industry (or some other) would have received six francs’ worth of encouragement; that is what is not seen.
And if we were to take into consideration what is not seen, because it is a negative factor, as well as what is seen, because it is a positive factor, we should understand that there is no benefit to industry in general or to national employment as a whole, whether windows are broken or not broken.
Now let us consider James Goodfellow.
On the first hypothesis, that of the broken window, he spends six francs and has, neither more nor less than before, the enjoyment of one window.
On the second, that in which the accident did not happen, he would have spent six francs for new shoes and would have had the enjoyment of a pair of shoes as well as of a window.
Now, if James Goodfellow is part of society, we must conclude that society, considering its labors and its enjoyments, has lost the value of the broken window.
From which, by generalizing, we arrive at this unexpected conclusion: “Society loses the value of objects unnecessarily destroyed,” and at this aphorism, which will make the hair of the protectionists stand on end: “To break, to destroy, to dissipate is not to encourage national employment,” or more briefly: “Destruction is not profitable.”
What will the Moniteur industriel* say to this, or the disciples of the estimable M. de Saint-Chamans,* who has calculated with such precision what industry would gain from the burning of Paris, because of the houses that would have to be rebuilt?
I am sorry to upset his ingenious calculations, especially since their spirit has passed into our legislation. But I beg him to begin them again, entering what is not seen in the ledger beside what is seen.
The reader must apply himself to observe that there are not only two people, but three, in the little drama that I have presented. The one, James Goodfellow, represents the consumer, reduced by destruction to one enjoyment instead of two. The other, under the figure of the glazier, shows us the producer whose industry the accident encourages. The third is the shoemaker (or any other manufacturer) whose industry is correspondingly discouraged by the same cause. It is this third person who is always in the shadow, and who, personifying what is not seen, is an essential element of the problem. It is he who makes us understand how absurd it is to see a profit in destruction. It is he who will soon teach us that it is equally absurd to see a profit in trade restriction, which is, after all, nothing more nor less than partial destruction. So, if you get to the bottom of all the arguments advanced in favor of restrictionist measures, you will find only a paraphrase of that common cliché: “What would become of the glaziers if no one ever broke any windows?”
Bron, as you point out, they either pay the higher tax rate or invest more into the business. Either way will help the economy. Structure the tax code to encourage investment in new equipment and expansion will be good for the economy.
Smom:
they will only raise the tax on the $250k or above and it will not have the result they intended. They will not lower the tax on the middle class.
A good number of people making over $250k own small businesses. All they are going to do is pay themselves $200k to avoid the tax. They will put more into retirement or they will go out and buy new equipment [so that might be a positive in the long run]. Or they will just pay their son or daughter more.
“Most live paycheck to paycheck and are never quite able to put money aside to start creating wealth.”
Bron,
That is the story of my fiscal life and I’m not only a financially smart man, but I never fell for the trap of living on credit, so also had relatively little debt. However, even being a frugal person from a material standpoint, my income was simply not enough to build up a reserve of extra cash. My home was my greatest and only investment. I luckily sold it before the housing market crashed, but the newer smaller home I bought as the market began to recede, receded in value far more than I expected. So while my income is above the average for the area I live in, my cash flow certainly doesn’t allow me a cushion. By the way for most of my life I always worked two jobs and my wife also had to work long hours.
To answer your other question, yes the wealthy should have to pay a fairer share of their income, because the facts show they are the people who reap the greatest benefit from our government and our infrastructure. Why do the major oil companies pay a pittance in taxes when we built up huge debt in two Iraqi wars for the sole benefit of these oil companies?
Dredd, LK, Buster, AY and ID707,
Thank you for adding to this discussion with material that complement the linked article and in doing so sharpens the focus of what all of us realize is the true state of the world’s economy. I think many of us here have a conceptual understanding of what is going on in reality, but it is important that we have source material to back up what is to some so obvious.
Buster’s comment, which might at first seem s tangential, is actually essential to the discussion. How does one deal with the problem when the general discussion of the pundit/media class omits essential elements that should be within the parameters to be explored? To wit our Defense Budget, which is greater than the next fourteen world powers budgets combined? If everything is on the table as all the “wise” people pronounce, why is defense off the table? With the old Watergate dictum of “follow the money”, who gets income from our bloated defense spending?
How many of those 147 Corporations, referred to by Dredd and supported by LK, are reaping those riches in one way or another. Why do we have the greatest collection of the best tanks in the world concentrated in Germany to stave off a ground attack from who? Why do we have 40,000 troops stationed in South Korea, which has a formidable army of its own? What is the cost of maintaining these troops world wide and to what end are they there?
One of the advantages of being an old fart like me, was that back in my public school days we had history and civics courses that actually taught something about the context of the country we live in, albeit even then sanitized. Running through the discussion of the “Robber Baron” era and the “Golden Age” was the notion of the evil of “Interlocking Directorates”. What are those 147 corporations if not the same thing. I note that “Free Market” theorists/promoters always stress that it is the competitive nature of the “Free Market” that makes it strong, in the “Darwinian” sense. Where is the competition between those financial titans, if they are interrelated. What we really see is not some capitalist model, but in essence a Fascist model. Our public discussion, filtered through the pundits, has one side clamoring for a “Free Market” which with this information about interlocking directorates doesn’t exist. “Free Market” is the chimera used to muddy the waters and deny the reality of the multi-national companies being beyond the reach of any government.
What I must point out though is an issue I’ve raised before in other guest blogs and it is essential to understanding the “why” of the need to destroy the middle class. This is the psychological element that is too often ignored in discussions of economic and political matters. We play pretend that peoples psychological bent is of no effect and therefore all sides in the discussion are acting out of their own sense of self-interest. I believe this to be untrue. My reason is that it is obvious from history that a broad, prosperous Middle-Class makes every country richer.
Why then from the view of our elite do they continue to move to destroy the middle class everywhere and to also further impoverish those that already live in poverty? The answer to me is that their psyches deem it necessary to their self-esteem that they are universally seen as being far above the “herd” of humanity.
When you essentially have everything of economic value what more do you need? My belief is that those with “everything” want their power recognized and esteemed by the “herd”. They aspire to be seen as “Nobility” in the feudal sense and in order for that to happen everyone else has to be reduced to either serfdom, or as minions in the coteries. Thus the move to return to a Feudal era.
Bron, Well then let’s reduce the taxes on the middle class and raise them on those over 250,000 like Obama wants to do. The Bush tax cuts expire at the end of the year.
Smom:
because the middle class is taxed too much and they dont know much about money. They never learn about it in school or in the home. Most live paycheck to paycheck and are never quite able to put money aside to start creating wealth.
Moderator:
“Isn’t anyone in a family that makes over 100k a year basically wealthy,”
What is the cut off? $110,000? When you have 2 children, a couple of cars, a house with mortgage payment and those 2 children are in college, you have very little discretionary income. If you own a small business you pay 15% for your own payroll tax and whatever local business taxes there are.
If you work for someone you still pay 7.5% to SS, etc., property tax, sales tax, state tax, federal tax, gas tax.
I would imagine the average person making $100,000.00 per year pays between $28,000 and $40,000 per year in taxes assuming they own a house and a car. But if they rent, they still pay property tax for the landlord.
Quite simply the middle class is being taxed too much and has been for a very long time. But that is what supports the government, there are not nearly enough rich people to do it. If you confiscated the total wealth of all the multimillionaires in this country, I doubt you could run the government for 2 years.
Reduce the tax burden on the middle class. It is simple. But no politician is going to do it because that is who pays for SS, medicare and all the other social programs in this country along with trying to put money away for their own retirement. There are not enough rich people to take care of it.
The feudalistic aims are thus not confined to the USA, see above comment.
Latest Demo of Private Empire’s Power Seizure
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This comment by Dredd brings up another example of how the international private empire (good name!) wants to frankly take over sovereign powers, exercising its own sovereignity over that of nations. We have seen it as Dredd mentions in the exercise of bank power by private banks and by approved public agencies such as IMF and World Bank.
But now we have a new South Asia Trade Pact which will clearly put the private empire in the driving seat and negate/nullify the effects of national governments’ laws of those who ratify—-and of a certainty isolate commercially the nations who refuse to sign the pact.
IRONY: We can’t get the world to go for democracy and other basic human rights—BUT WE CAN get a deal where commercial rule is instigated with one thousand years reign. Write it up. You saw when it happened.
This empire solidification, in fact, is bigger (over time) than all the multiple wars we have had since 1900 combined, in terms of money, and of power lost and gained.
Is this TransPac Pact getting any attention? Do we even realize what it means for the USA? And that Obama is supportig it vigorously.
I have mentioned it two times, since I was alerted by an article, but no apparent reaction here.
I don’t know but that Dread’s concept is the best characterization of the enemy we face.
The “evil” empire realized one strategic advantage that they had: Governments strive at cross-interests, while
they in a multi-national form could and did act unitedly for reaching the common goal of steering the world.
And with their power in the USA they can back themselves up in our foreign policy “campaigns” against terror and our feelings of exceptionalism which gives us unique powers as a nation to exercise on the empires behalf.
Did any of you vote for any of that? Didn’t think so.
This is NOT NEW! The actions of corporations prior and during WW2 was a similar action to cooperate (without it being seen, but some was and was investigated) and arrange terms beneficial to corps, but not our nation. Amazing ethics and lack of patrioutism.
Just for the record and the benfit of re-reading let me cite Dredd.
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The word “globalization” is too amorphous in my opinion.
That is why I call in The International Private Empire, a group of 147 defined and named corporations that are international in makeup (not of or from any one nation), which like a slime mold, has individual “cells” that work towards a common goal (domination of global power and economy).
Each of the 147 corporations owns and/controls the others, indicating that they have tried to form an entity which is camouflaged to a high degree, and an entity that is difficult to get the details on in one sitting or one book.
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Dredd, see above.