Posts Tagged With: Ronald Reagan

THE WAR ON THE POOR

The rich are getting richer, the poor are getting poorer, and the middle class …is getting poorer too. Long-time trends since the early 1980s show that middle class income has been steadily declining while the top 10% has seen a steady rise in their share of annual income and overall wealth. Today the top one percent has annual income of over $400,000, while the top 5 percent comes in at just under 200,000. It’s really not that much-especially if you live in a high-priced metropolitan area. But the overall wealth of families in the top 5% averages out at about $16 million, which is not too shabby. While families in the bottom 25% often barely make it from paycheck to paycheck, even with some government assistance.

On the other side of the ledger, the average family income in this country is now about $50,500, declining by over 5% over the last half-dozen years. Now $50,000 a year may afford you a half-way decent, no-frills, middle class life-style in places like Ames, Iowa, or Athens Georgia, but it doesn’t go very far if one lives in cities like San Francisco, Chicago, Houston or New York. As far as the poverty rate in the U.S. these days, it stands at around 15%, with those families earnings being in the neighborhood of $20,000 per year. So we have the top one percent earning over $400,000 a year, while the bottom 15% earn about $20,000 or less. Does that sound like income inequality to you? A subject that President Obama will likely dwell upon at some length in his state of the union address tonight. Or more precisely, how to remedy the continual growing economic inequality that is oozing over this country like a giant blob.

Of course, economic conditions in this country used to be worse. This prompted President Lyndon Johnson, exactly 50 years ago, to declare his famous “War on Poverty.” In 1964, the official poverty rate in this country was over 20%, and Johnson, after taking over the presidency from an assassinated John Kennedy, declared that this was unacceptable. There was, in effect 2 Americas. While some of the citizenry lived in opulent luxury, a vast number endured hardscrabble lives in the most deplorable squalor. So Johnson, with the help of Democratic majorities in both houses of Congress began his war on poverty which resulted in the enactment of major pieces of legislation such as Medicare, Medicaid, food stamps, college loan programs and housing assistance. As a result, poverty rates, especially for seniors dropped significantly to about the 15% level. Under LBJ, the civil rights voting law, which enabled black minorities to freely vote in the South for the first time, also became a reality. Indeed, with such huge accomplishments under his belt, Lyndon Johnson could have been recognized as one of our greatest presidents, except for one thing. The war in Viet-Nam. While the rest of the country finally began to recognize this war as the hopeless fiasco it turned out to be, LBJ continued to pour more  and more troops and money into a lost cause. The country turned on him, as a result, and his presidency was destroyed. Richard Nixon, who followed Johnson, and who extracted us from Viet-Nam, also achieved major accomplishments, only to see his presidency destroyed by his paranoia over the Watergate scandal. I guess the seeds of one’s personal destruction lie buried within everyone’s soul, only to sprout forth under the most opportune and fertile circumstances.

In any event, government intervention to provide assistance to the most unfortunate members of our society, the poor, the sick and the elderly, became the accepted norm, at least until 1980 when Ronald Reagan was elected president. Reagan ran under the mantra of the government, instead of being the solution, was actually the problem. It was government interference in the free-market system that was causing all the economic hardships we were experiencing. Upon taking office, Reagan, therefore, set out to significantly slash social welfare and assistance programs, while also substantially cutting income tax rates, especially for the rich. So, instead of a war on poverty that Lyndon Johnson had undertaken, Reagan and the Republicans set out to make it a war on the poor. It was the 1980s, when “welfare queens” were blamed for draining the public coffers. Of course, everyone knew who the welfare queens were, since it was used as a racist subterfuge for black unwed mothers. One would think, however, that by slashing welfare programs, government spending would substantially decrease. Instead, Reagan increased government debt by over 300% during his 8 years in office, primarily through huge increases in Defense spending. You know, to defend against that Russian “evil empire” thingy. It turned out that Reagan and the Republicans weren’t against government spending per se. They were just against spending it on the most vulnerable of our people. When it came to spending on military hardware and troops, the sky was the limit. This combination of huge Defense spending coupled with sharp tax reductions for the wealthiest among us has mushroomed our public debt now to about $17 trillion. Republican policies regarding these spending and tax priorities have also pretty much stayed the same to this day, as when Reagan first enumerated them in the 1980s.

To be fair, the very nature of our capitalistic economic system will mandate a society where some individuals will possess the necessary talents and abilities to take full advantage and become very wealthy and powerful. Others will have extreme difficulty coping with competitive nature and meritocracy that capitalism demands, and they will usually wind up at the bottom of the totem pole. Most will fall somewhere in the middle. To paraphrase what Winston Churchill said about democracy-Capitalism is the worst form of economics, except for any other system that’s ever been tried.

In any event, no matter what President Obama proposes tonight regarding income inequality, don’t look for our piece of crap Congress to take any meaningful action on any proposal. Politicians these days are bought and paid for by billionaires who have their own agendas, and they hardly include helping to raise the lower classes out of poverty. Once elected, a politician’s primary objective is to get re-elected; and to do that, he or she has to make  the billionaires who put him or her in office happy so these billionaires will keep pouring money into their campaigns. That’s what our so-called democratic system has devolved to, why no meaningful legislation is ever enacted, and why the entire system has pretty much become a farce.

 

Categories: Uncategorized | Tags: , , , , , , , | Leave a comment

BUDGETARY BLUES

I’ve written before how most people wrap themselves in a warm, velvety blanket of self-deception, or delusion, in order to smoothen out the jagged edges of harsh reality that often exists in their lives. I’ve written about how this delusion has led so many into literally taking the bible at face value as the word of God. Despite all the ridiculous contradictions and mythologies embedded in both the old and new testaments. About how people are still searching mountain tops in Turkey looking for the remnants of Noah’s Ark, in spite of the implausibility of such a fable. About how poll-after-poll shows that less than half the people in the U.S. believe in Darwin’s Evolution. Even though one visit to a museum of natural history in any major city would show them overwhelming proof of Evolution’s existence. So too, does this blanket of self-deception spill over into the political arena. This came to mind with the recent death of Briton’s Margaret Thatcher and the cozy relationship she had with our Ronald Reagan when he was President.

Much has been written about about the “iron lady” as she was called; but all these words seldom gave a full picture of her administration. At the time she became Prime Minister in 1979, England had gone pretty far down the path of democratic socialism. The British government had nationalized large, entire industries such as coal-mining, steel production, airlines, shipping and telecommunications; and was doing a very poor job running their operations. The unions had become all-powerful, and had begun a series of crippling labor strikes that was grinding the economy into the dust. Thatcher’s achievement was to get the government out of the business of operating major industries (which it was doing so badly), and to break the back of the trade union’s stranglehold on the economy. For those accomplishments she was either praised or demonized, according to one’s political beliefs, by major segments of the British population. But in trying to paint Thatcher as a dyed-in-the-wool conservative, few columnists have pointed out that she was also a stout defender of the British universal healthcare system. She had no tolerance for anyone attempting to minimize or cut their benefits.

The media also failed to recognize how proud Maggie was for securing the largest single year payment increase since the end of WWII (about 11%) in Briton’s old-age pension system (our Social Security system.) Or how, for the first 10 of her 11 year-reign, the marginal tax rate on the wealthy was 60 percent. In her last year, that rate was reduced to 40%, still a tick higher than what the Democrats have been able to achieve in this country. Because the reality is, that Conservatives in England, and indeed, throughout all of Europe, are still more liberal than Democrats in this country. Every first-world country, including all of Europe, has universal healthcare except the U.S. And it usually extends to such lesser things as post-natal care. For example, in France, when a mother gives birth, a nurse is sent to her home for several days after, to help in her recuperation. So while Margret Thatcher and Ronald Reagan did have a special relationship, they were often miles apart in their accomplishments.

According to propaganda, fable and mythology put forth by Republicans in this country, Ronald Reagan was the great conservative that slashed government spending to the bone. Nothing could be further from the truth. Here’s where those pesky little things like facts come into play. (They always seem to ruin a nifty delusion, don’t they?)  For 39 presidential administrations covering more than 200 hundred years, the accumulated budget deficit in this country amounted to a little over $900 billion. Under 8 years of Reaganomics, the budget deficit mushroomed to $2.8 trillion. I’m not a mathematician, but it seems to me that Reagan accomplished more than a 300% increase in our deficit spending during his 2 terms in office. How did he achieve this magnificent accomplishment? In 2 ways. First, while he did cut some fringe social spending around the edges, he vastly increased military spending. You know, to stick it to the “evil empire” as he called it, or the old USSR. And secondly, he sharply reduced tax rates, especially for the rich, whose marginal rate went from 60% down to 28%. Of course, this, in turn, sharply reduced the amount of revenue the government was able to take in.

Right-wingers and Republicans (is there really a difference between the two) like to pretend that, somehow, the Department of Defense is not subject to the same budgetary constraints the rest of the government has to deal with. That Defense really gets its funding from the money-tree that grows in the Pentagon court-yard. Indeed, in this past election, while Mitt Romney was castigating President Obama for huge budget deficits, and promising to balance the budget if elected, he went on about how Defense was so under-funded. He promised to significantly increase Navy ships, and fighter jets, and ground troops, etc. But those things don’t come cheap. If those promises were implemented, they would increase the $700 billion existing Defense budget by another $100-$200 billion annually. But he would somehow still balance the total federal budget. Must be that getting resources from the money-tree thingy again.

The fact was that Reagan really didn’t care about the ballooning federal deficit, as long as he got his way on vastly increasing Defense expenditures. He’s given credit for significantly improving the ailing economy he inherited when taking office. But it was a completely different set of circumstances in 1981 versus today. Back then, there were raging inflationary pressures throughout the economy, versus very low inflation and interest rates today. Inflationary pressures didn’t begin to come under control until Paul Volker, then head of the Federal Reserve System, began raising interest rates to astronomical levels. This cooled off wild spending impulses, and sucked some of the excess dollars out of the economy. As inflation became tamed, the economy started to significantly improve. But most of the credit for that should be given to Paul Volker.

Today, in the 25 years since Reagan left office, the federal deficit has grown from $2.8 to almost $17 trillion. Certainly not a good thing. The GOP likes to blame a big chunk of the increase on too much spending by the Obama administration. But the fact is, spending has become almost static in the last several years. The most prominent reason for huge budget deficits in the lack of revenue taken in by the government. Part of that is due to the recession and the high rate of unemployment we’ve experienced. But part is also due to the low rate of taxation that currently exists and that was put in motion by Ronald Reagan. We are currently number 31 on the list of taxes collected by the world’s nations. Virtually every country in Europe and the Americas has a higher rate of tax collection than we have.

I call it the free-lunch-syndrome, so craftily exploited by Ronald Reagan. You want a strong national defense? You want a vast array of social, crime-fighting, and other government programs? Fine. We’ll give you all of that. And the best part, we’ll hardly charge you for any of this. After-all, who doesn’t like a free lunch. So now, this has resulted in the ultimate dysfunction as far governance is concerned. Republicans are vowing no more tax increases, despite the fact that we are so obviously under taxed; and Democrats are vowing no further cuts or reforms of social programs, even as they become more and more costly. Maybe, the first step toward sanity in governance, would be to dispel all the delusions and mythologies surrounding past history’s prominent figures. Maybe infusing those that would govern, with a strong dose of reality and rationality would finally put us on the path toward resolving some of these issues.

Categories: Uncategorized | Tags: , , , | Leave a comment

REPUBLICAN MATH

In the waning days of Dwight Eisenhower’s presidency, Ike issued a very prophetic warning, which we as a nation, failed to heed. Ike, as he became known, was, of course, the Supreme Commander of allied forces in Europe that successfully prosecuted the war effort against the Nazi empire. He returned home as a conquering hero and subsequently joined the Republican party, and then ran for President in 1952. He defeated a hapless Adlai Stevenson by landslide margins in both 1952, and then again, in 1956. Stevenson had been Governor of Illinois and was a man of outstanding honor and integrity, but he had no chance against Ike’s popularity and friendly smile. Although Ike seemed to prefer spending most of his days out on the golf course, there were 2 significant accomplishments during the Eisenhower administration. One was the start of constructing the interstate highway system that auto travelers enjoy the benefits of to this day. The second was taking action to integrate the highly segregated public school systems that existed at that time throughout the South. In 1957 the courts had decreed that high schools in Little Rock, Arkansas must admit the first black students to an all-white high school which had been segregated since Civil War days. The Governor of Arkansas, a rigid segregationist, had sent the police to block the entrance of a school where 9 black students were to be admitted. Ike, thereupon, called out the national guard to personally escort the black students into school, and the first de-segregation of all- white schools in the South had commenced. Eisenhower took these actions reluctantly, as he was no great civil rights champion. But, nevertheless, he did achieve a landmark civil rights accomplishment.

In the last days of his presidency, Ike issued a proclamation warning us about the undue growing influence of the “military-industrial complex.”  He meant that our growing military might,  coupled the the growing power of the military weapons industry, was beginning to exert undue power, and if left unchecked, would exert continuing undue influence to assure their increasing domination over national affairs. Coming from a former 5-star general, this was certainly a warning to be taken seriously. So being a nation of exceptional wisdom, rationality and sanity, the U.S. immediately began slashing its military budget, began withdrawing troops from far reaching corners of the globe, and took actions to lessen the influence of the weapons manufacturers-NOT. Perhaps such actions might have been taken in a parallel universe, but in this time and space, Eisenhower’s admonitions went totally unheeded. Instead, the military budget has been sharply increased, and the growing influence of weapons manufacturers and other Defense contractors in our national affairs is huge.

The power and influence of the military-industrial complex led directly to the fiasco known as the Viet-Nam war. There was a belief in the early 1960s that the U.S. was militarily invincible, a belief fed to us by the military-industrial complex, which led us to confront the Viet-Cong in the hellhole jungles of Southeast Asia in the belief that we would score an easy victory over a ragtag collection of jungle insurgents. The rest, as they say, is history. That ragtag Viet-Cong army not only defeated us, but about 58,500 American lives were lost, to say nothing of the tens of thousands of American lives that were ruined because of severe war injury, to say nothing of the hundreds of thousands of Vietnamese lives that were lost and the gazillion dollars that were wasted. The scars from the Viet-Nam war remain fresh in the American psyche to this day. Which brings us to the Republican math problem and the future that a Romney presidency would bring to our country.

In the current election, large segments of the electorate have expressed a desire for sharply reduced expenditures leading to a balanced budget, while maintaing a strong military. So naturally, His Mittness has promised both. Except that the math doesn’t fit. Most people aren’t aware that that about 83% of our annual budget (for which we have to borrow 40 cents out of every dollar we spend) is comprised of 4 items, i.e., interest on the debt, Social Security, Medicare, and Defense spending. We can’t tamper with interest on the debt; if we did, we could never borrow again. Self-absorbed seniors like myself won’t stand for any meaningful cuts in Social Security or Medicare; thats like the third rail of politics that no politician is willing to touch. So that leaves Defense spending which comes in at over $700 billion a year as the one significant area where discretionary budget cuts could be made. But here’s where the Republican math goes bonkers. Instead of cutting Defense, His Mittness has promised to increase military spending by about $100-$200 billion a year. Chalk it up to the influence of the military-industrial complex which is especially powerful in swing states such as Virginia. Oh yes, Romney is also promising a 20% tax cut across the board. But somehow he will balance the budget, in defiance of all mathematical sanity. So far he stated he will do this by eliminating funding for PBS and Planned Parenthood, which, as I said last time, is like trying to empty the Pacific Ocean with an eyedropper.

His Mittness is just trying to emulate the playbook that worked so well for Ronald Reagan in the 1980s. Reagan also promised to cut taxes, sharply increase Defense spending, and yet somehow, magically, balance the budget. Except that Reagan’s actions of cutting taxes and boosting military expenditures led to a 300% increase in the public deficit. But it did get him elected, twice. It’s amazing though, how mathematical computations always seem to trump political promises. In any event, Romney’s positions are on the threshold of getting him elected as our next President, no matter how mathematically impossible they are. Mitt Romney is our do anything, say anything it takes to get elected candidate. I’m firmly convinced he would be hesitant to criticize a group of Nazi skinheads with swastikas carved in their foreheads if he thought it might cost him a few votes.

Categories: Uncategorized | Tags: , , , , , , , | 1 Comment

Create a free website or blog at WordPress.com.