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Republicans bringing back the bad old days

William Tell keeps his hat on

You have to give Republicans credit for their dogged persistence.  They are going to drag us kicking and screaming back to the bad old days if it takes them a lifetime.  Look at all of the systems and bad ideas that western civilization got rid of over the past couple of centuries that the Republicans have updated and passed off as new and shiny.

1.) Sumptuary Laws: Wiki defines them as “are laws that attempt to regulate habits of consumption. Black’s Law Dictionary defines them as “Laws made for the purpose of restraining luxury or extravagance, particularly against inordinate expenditures in the matter of apparel, food, furniture, etc.””  The Chained CPI is the perfect way to restrain consumer spending, to the eventual detriment of the economy.  Back in the middle ages, the aristocrats didn’t want to have to compete with the commoners for things like purple dye and fine cloth.  If some merchant could buy that stuff for his daughter and supplies were strictly limited, that meant a duchess might have to do without.  We can’t have that.  In a similar way, the chained CPI is almost guaranteed to keep seniors from spending too much.  The working assumption is that they will scale down their purchases, going for cheaper consumer goods, probably of lower quality as well.  This will save the upper salaried from having to give up their Bush tax cuts or have their payroll taxes increased.  More money for them to spend on whatever their hearts desire, less for everyone else.  Too bad for poor seniors who scrimp and save for the meagerest luxuries.  This is what you get for a lifetime of work and getting laid off in your middle age.

Besides, it’s so much easier to tell who the lower classes are at a glance.

2.) The Truck System: Wiki defines it as “an arrangement in which employees are paid in commodities or some currency substitute (referred to as scrip), rather than with standard money. This limits employees’ ability to choose how to spend their earnings—generally to the benefit of the employer. As an example, scrip might be usable only for the purchase of goods at a company-owned store, where prices are set artificially high. The practice has been widely criticized as exploitative and similar in effect to slavery, and has been outlawed in many parts of the world.”

The proposed Medicare voucher system comes pretty close to a truck system.  Employees pay into the Medicare system throughout their working lives with the expectation that when they are of age, they will be paid their deferred compensation in the form of Medicare benefits.  Instead, they would get a voucher whose worth is much less than the originally promised benefit and it could only be used to purchase health care from a private insurer, who has no incentive to compete because there is no public option.

Truck systems have been outlawed in much of the world because it is seen as a form of slavery. Note that the proliferation of unpaid internships for college students is also a form of truck.  They cost parents a lot of money, the student gets no pay and the internship itself is frequently of questionable value in terms of acquiring further employment.

3.) Fear and lawlessness: In Republican world, the only people who have any true liberty are insane people with guns.  Apparently, there is nothing anyone can do to stop them.  Absolutely nothing. Everyone else is at their mercy and must either pay handsomely for security or fight gunfire with gunfire.  That leaves the rest of us afraid to walk around or go to school safely without fear of being gunned down.  We’re the ones huddled behind castle walls while the lawless roam at will.

4.) Serfdom: This trend is disturbing.  This is what you get when you make precariats out of workers.  The more insecure their lives are, the more they are willing to take whatever work they can get to pay their bills and they’ll do it at remarkably low prices. The attacks on labor unions is designed to create more insecurity.  Note that when you decide to go along with this trend, it’s bloody hard to win back your rights without some major socioeconomic shock, like a Great Depression.  As much as people might dislike labor unions, it’s better to have them to push around the management than not have any.

5.) Exploitation: If you want to know what the Republicans and their allies in the 1%, listen to this This American Life* episode about the The Little War on the Prairie.  This war was between the Minnesota Dakota against the US government who cheated them out of their lands.  You might be surprised to find that Thomas Jefferson was the guy who laid out the strategy of how the government was going to acquire the Dakota off their lands.  Basically it goes like this: we want the Indian lands, they aren’t going to give it to us nicely.  So, we’ll sell things to them that they want and get them deeply into debt.  When they see they’re in a hole they can’t climb out of, we make them an offer they can’t refuse.  We’ll cancel the debt if they give up their land.

It worked.  It also lead to the largest mass execution on American soil in the 1860s.  Go listen to the whole thing.  Abraham Lincoln turned out to be a decent guy but he must have been overwhelmed by the Civil War.  It’s a sad story.

So, how does this apply to Republican strategy?  As I’ve been saying for a couple of years now, it’s the Republican plan to put us in thumbscrews.  The idea is to basically turn down the heat on the economy so that people ain’t got jobs, people ain’t got money.  The corporations will stop investing, bankers will sit on the cash like the greedy dragons they are and the whole executive branch of government will be invaded by financial industry moles who will make sure that no one outside of their little evil group to which no one we know belongs gets any relief for the debt they can’t get out from.  And let’s make this clear, we’re not talking about the people who stupidly took out mortgages on homes they couldn’t afford.  Those people got their comeuppance early.  No, the squeeze is now going to be on the middle class, including the college educated, whose wages have plummeted but whose living costs have not.  As long as there is an ongoing crisis of funding the government, unemployment insurance and all the other things that keep the economy barely chugging along, the screws on us will get tighter and tighter.

The Republicans want to break the social insurance programs.  We know this because if the deficit was really bothering them, they could end the Bush Tax Cuts on the highest earners and end the wars.  If they really wanted to cure the deficit problem, they would enthusiastically back a jobs program and fund unemployment benefits so that money could go back into the economy through consumer spending and so that people could pay their taxes again.

This is not what they are advocating.  So, I can only conclude that they are willing to risk severe injury to some industries, like pharma, and the economy in general and have people lose their houses and careers because they want to push us to the point where we are overwhelmed with living expenses that we can’t pay.  Then they will generously offer to turn the money tap back on if we just give up our social insurance programs.

The temptation is going to be great in the next couple of months, especially for the state of New Jersey.  Unemployment rates here were already above 10% when Sandy hit.  Now that one of the state’s major industries, tourism, has suffered a devastating blow, there will be a lot of pressure on our Congressional delegation to cut a deal so the money can flow.  I expect every one of New Jersey’s representatives and senators to crumble.

What would happen if we don’t give in?  I don’t know but it sounds to me like taxes will go up on the wealthiest among us.  I don’t know about you but my Bush tax cut never did amount to very much.  I’d never even miss it.  But I’m guessing that if you make between $250K and $800K, it amounts to quite a bit of money.  It might mean a change in social status. I suspect that’s why the White House press corps was so anxious to find out what the plan was when Obama gave his post Sandy Hook shooting presser.  They’re trying to figure out where they will stand after January 1, 2013.

So, that’s my theory and I’m sticking with it.  The wealthy and their political arm think they can wait us out.  It’s all they’ve got left at this point.  They’re never going to be able to swing another wave election with social issues.  That demographic is dying off.  So, they’ll just keep us in pain until we give in.  Maybe it will work, maybe not.  Either way, they’re going to strangle the economy until they are no longer under any obligation to participate in social insurance.  And then they’ll move in and take everything.

That’s the Republican party in it’s modern form.  It’s still the same bunch of rapists and pillagers.  They’ve just got a formal party organization to hide behind now.  We’re now back to the bad old days of the Sheriff of Nottingham.  It’s hard to believe the middle and working class happily squandered their advantage over the past 30 years over such tripe like “family values” and “patriotism” and the “moral majority”.  I thought people would have learned their lessons by now but the Tea Party has signed up a whole new set of gullible Americans who are more than happy to bash the head of the person lower than them in the hierarchical scheme.  Some people never learn.

* I know nothing about semiotics but I find it interesting that Ira Glass, the semiotics major, manages to find stories that tie in so well to current events in a metaphorical sense.  Accident?  Coincidence?  Intentional?

Sunday: Taking the Top off the Mountain

Digby wonders why the bankers are whining.  They’ve gotten everything they wanted but they’re all upset that Obama is speaking harshly to them.  So, now they’re going to sit on their money and not give him any for his re-election.

Wait!  Why is that a *bad* thing?  If they’re not contributing to his campaign, maybe he and other Democrats will have to start paying attention to what the voters want.  Would that be such a crime?  After all, there are more voters than bankers.  Seems to me that banker money has made it too easy for Democrats to coast instead of doing what they’re supposed to be doing.  So, ok, then, let the bankers keep their money.  And if they give it to Republicans to run a bajillion campaign ads, then Democrats better get on it and do some legislatin’.  But I digress.

So, Digby’s question is a valid one: What drives the bankers to be such whiny Verulka Salt’s who want it all NOW!?  She has a couple of theories that glance at the truth tangentially.  They explain the whininess but not what drives the bankers.  They’re either naive, resentful of populism or arrogant twits.

But if you’ve read my Strategy of No Strategy series, you’ll see if from a different point of view altogether.  The finance class actually consists of a bunch of overqualified strip miners.  They’re overworked, which might explain the number of bad decisions they make, and their compensation system decouples the consequences of their actions from the actions themselves.  They are being paid to make “deals” and the purpose of those deals is to extract “wealth”.  In a way, it’s not that much different from getting into the cab of some giant piece of earth moving equipment and mowing down the side of the mountain and then loading that potential ore onto a conveyor belt to be separated from dirt.  They live in a “company” town and are paid “company scrip”.  It’s a truck system for them as well.  The compensation is not proportional to the amount of work they do, they can be fired at will and they’re never going to leave that mountain because they owe their souls to the company store.  The more they work, the more compensation in bonuses they are promised but it’s never enough.

That’s not to make you feel sorry for them.  That’s just the way it is.  And seeing it for the way it really is can help us get over the very legitimate emotion of wanting to ring their skinny necks right out of their Brooks Brothers suits. We need to separate our feelings of hatred towards them from our understanding of what’s really going on here.

What I see is really going on here with Obama is that he was hired because he is one of them.  He comes from the right school, he has the right pedigree, he had the right connections.  It didn’t matter if he knew nothing about finance.  Just like them, he would get a crash course and learn on the job.  And they have taken this deal with him as far as it would go.  Just like them, Obama has stripped the top of the mountain.  There is no more wealth to be extracted.  Now, the middle class has been mined to death.  It’s exhausted and can no longer generate the wealth that they have been paid to retrieve.  They’re screwed.  The owners (ironically, that would be some of us shareholders through our 401Ks) want more money.  There’s no more to give.  It’s a vicious circle because generating more wealth for us, the shareholders, means laying more of us off, which means less wealth going into the 401Ks.  When Obama finally signs the Grand Bargain, he will be creating an environmental catastrophe but before that happens, he has to win this election and people are hurting so badly, he may not be able to do it.

Do the number of ad buys really make a difference anymore?  We may see the effects of the internet on politics for real this election season.  Some of us have given up TVs altogether and no longer subscribe to newspapers.  I’m guessing that would affect the Democrats more.  Their base is younger and better educated (but not necessarily smarter).  The people who are moved by TV ads are older and less well educated.  That would favor Republicans.  I don’t know, this crap makes me crazy.  It’s all a bunch of political psych tricks that make no difference to how people live their lives.  But I suspect that the Osama bin Laden to-do this week had something to do with appealing to older and independent voters.  I could care less.  All I want to hear coming out of either candidates’ mouths is how they are planning to solve the unemployment problem and save our retirements without requiring even one more half penny of sacrifice from the late babyboomers.  Anything other than that might as well be speaking in some obscure language from a small isolated population in the Caucasus.  “Blah-blah-blah-SEALS! Blah-blah-blah-SHOT-IN-THE-EYE!” Who. Gives. A. FRACK.

So, as I was saying, the bankers are like strip miners and they’re not getting much out of the mountain anymore, their manager says the place is exhausted and they’re puzzled because this particular piece of real estate has been pretty rich for so long that it’s hard to take it all in that it’s gone.  It’s really gone.  And now, they have to go mine somewhere else and in those other places, the ore’s not so rich or it’s harder to get at or there are people standing in the way or it’s going to take time to get the permits and pay off the owners or make new deals.  They’re going to have to do a trickier kind of work now or they’re in big trouble because the deals they are about to make are a lot riskier.  Meanwhile, they’re leaving a big mess behind with lots of toxic runoff and the downstream people are angry because they have destroyed our economic ecosystem.  I guess they want Obama to keep the rabble down while they finish their work but it’s getting loud and noisy and not helping their concentration.  Maybe Mitt can keep a lid on it…

Anyway, that’s the way I see it.  They’re getting paid to stripmine.  Changing the way they behave will require the will to change the environment they work in.  If I were really interested in changing the way this works, I would have protected the employees that worked for Wall Street at the very beginning of this crisis.  I would have enforced workplace standards, required a limit on the number of hours worked, required mandatory overtime to be dispensed with the next immediate paycheck, enforced the minimum wage, tied salary to hours worked and prevented bonuses from rising to more than 20% of salary, mandated more 4 weeks of vacation per year, paid, and required every blessed transaction to undergo rigorous outside auditing, just to slooooow everything down.  Also, I might have had the EEOC or some other agency review hiring practices so that applicants were not discriminated on the basis of where they went to school or their genders.

From the money side of things, I would have begun the process of eliminating the 401K, reinstituted the defined benefit pension plan, and placed rigorous outside auditing checks on every blessed pension fund transaction.  One final thing: I would have made sure that I seized control of any fiber optic cable coming out of Wall Street.  We should never negotiate with terrorists.

Wall Street would have screamed bloody murder but such measures might have gotten a lot of support from workers including some of the workers on Wall Street.

Alas, Obama did not do this.  So now he is faced with having to do without finance sector money and will have to face the mountain this fall.

I kind of like the way this is playing out.

Tuesday: Paul Ryan and Class Envy

Remote Area Medical (RAM) in the Los Angeles Sports Arena, April 2010

Wha?  Huh?

In a speech to the Economic Club of Chicago Monday, House Budget Committee Chairman Paul Ryan (R-WI) suggested President Obama and Ryan’s Democratic critics are “sowing social unrest and class envy” by pushing a tax increase on the wealthiest individuals in order to help address the deficit and debt.

“The president says that only the richest people in America would be affected by his plan,” Ryan said, arguing that “class warfare may be clever politics, but it is terrible economics.”

Ryan complained that Mr. Obama wants to increase the top tax rate to 44.8 percent. The president has pushed for an increase in the top marginal tax rate for families making over $250,000 per year from 35 percent to 39.6 percent.

“Sowing social unrest and class envy makes America weaker, not stronger,” the Wisconsin Republican argued, suggesting the “true sources of inequity” in America are corporate welfare and empty promises.

He said the “real class warfare” that threatens Americans is “a class of governing elites picking winners and losers, and determining our destinies for us.”

Is that so?  BTW, no one who goes into science does it for the money as far as I can tell.  Even the inventors of blockbuster drugs lead pretty modest lives.  If they haven’t been “Pfizered”.

I like the other Paul’s take on Ryan’s Class Warfare remarks:

Actually, for the most part critics of his plan haven’t focused on the distributional issues so much as on the nonsense he’s talking; they’ve been playing the arithmetic card, not the class warfare card. But yes, the Ryan plan does impose huge sacrifice on the poor and the middle class, while cutting taxes on the rich and corporations.

And this is, of course, the game conservatives have played over and over again since Reagan. Without exception, their policy proposals call for sacrifice on the part of most people, but lavish tax cuts on high incomes — and when you point this out, they yell “class warfare”.

and…

On one side, we have a steady barrage of articles about how it would be cruel to raise taxes on everyone making more than 250K, even though that puts you in the top 2 percent of the income distribution, because 250K isn’t really rich.

And on the other side we have confident assertions that we can curb entitlement spending by means-testing, by not giving full Social Security and Medicare benefits to people who don’t really need them.

And by and large the people saying these two things are the same people.

So apparently the universe of people so affluent that they don’t need Medicare is a large segment of the population, while the universe of people who can afford to pay even slightly higher taxes is a tiny segment.

Oh, Kay.

Pretty much.  Too bad that a target audience soaked in messaging has a dysfunctional logic board.

I’m not sure where Ryan’s going with this “class envy” thing but recently, I have gotten really nostalgic for the 70′s, minus the bad fashion and avocado and gold color schemes.  I grew up in an America where you could own a house and two cars on one measly income.  I can’t recall anyone in my family moping around resentful of the rich.  It would have been nice to have a college fund but it’s not like we were hungry, homeless or over our heads in debt.  Every kid had their own bedroom and we went to DisneyWorld on vacation a couple of times.  The rest of the time we went camping.  Ok, so we had a single color TV and every time the sucker went on the fritz, my dad would swear he wasn’t going to get it fixed so that we could all learn to enjoy each other’s company.

That lasted about 72 hours.

When people are losing their jobs and homes and are angry that the rich aren’t paying their fair share, like at the level they did when I was a kid, I’m pretty certain it’s not “class envy” they’re expressing.  It’s righteous indignation that they’re getting screwed by the bastards who aren’t even pretending anymore that tax cuts create jobs.

So, what do you call it when people have more money than they have had in generations and still want to stiff the little guy out of a decent wage because it just isn’t enough?  How come so many rich people see working people as parasites?  Don’t the rich have any manners? Weren’t they raised right?  Or are they just ‘ignorant’?

I’d call it incredibly selfish if it wasn’t also destructive.  A productive middle class and thriving entrepreneurship depends on some kind of insurance against catastrophic failure.  You can’t take risks or get really imaginative when you’re worried about feeding your kids.  But go ahead, Paul, let the grasshoppers eat everything in sight leaving nothing for the rest of us.  We’ll revisit this American economy in about 10 years and see if businesses are still able to function and grow without some significant compromises based on loyalty, conformity and corruption.

And what about Ryan’s plan to reintroduce the “truck system” via vouchers for Medicare? Truck systems have been outlawed in developed countries going all the way back to the 15th or 16th century but if Paul Ryan has his way, and Democrats give in, we’re going to see it reintroduced here in modern America.  It’s the most shameful thing I’ve ever seen.  Why isn’t Ryan being honest with taxpayers about the repercussions of dumping millions of seniors on the insurance market where they won’t be able to afford a decent policy?  That will mean more trips to the expensive emergency room and those unpaid bills will be passed on to taxpayers.  In 2008, unpaid hospitalization bills were passed onto New Jerseyans to the tune of $700 million dollars in hidden taxes per year.  And let’s not forget all of the future inheritances wiped out by debt caused by illness.

If anyone is practicing class warfare, it’s Ryan’s friends against US.

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