Romneyhood – More Than Greed

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I will confess to being more than a little worried.  Back in 2008 and 2010, the advocates for the wealthy and their candidates for office were more careful about denying their true intentions for America and its citizens.  Most of us, myself included, found it more comfortable to live our lives without thinking very much about it, trying to manage our private micro world without spending much time thinking about what is happening to us.

On this blog site we’ve mostly avoided debating the election issues.  Obviously, as we are reminded by one recent ping-back, to right-wing zealots we are just an “obscure website that is nothing but a liberal opinions blog.”  As to why people cling to firm opinions regardless of facts or logic, that is Skip’s area of investigation and expertise, not mine.  Still, I am quite aware that no matter how much attention I pay to the task of understanding fact-based reality there are many people predisposed to dismiss such efforts as “liberal opinions.” What scares me is that there are so many people like that out there, and so many more who cannot or won’t engage on the crucial issues of our times.

This does not bode well for democracy.  Even with a complete self-destruction of his campaign, even after repeated point-blank statements that he does not care about poor or middle class Americans, Mitt Romney would still get millions of votes from people with average or below-average incomes.  I know that there are those who would read the preceding sentence and say something like this: “You’re just a flaming liberal.  Of course Romney cares about America.  Obama is a fraud, and he has failed us, but Romney is a business man and he knows how to create jobs.  You are naive and opinionated.”

Alas, the lack of understanding of economic issues is nearly universal.  Taxation and public spending are major factors controlling the direction of the economy, but Americans have been trained by the rich to regard both as anathema.  Even after 30 years of depressed economic growth and growing income and wealth inequality, beginning with the Reagan tax cuts on top incomes, Americans in vast numbers still accept the premise that cutting taxes on rich people’s incomes is the path to general prosperity.  This year the Republicans propose to double down on the Bush tax cuts for the wealthy, but the consequences of doing so are lost on most voters.

It’s alarming that more people don’t or can’t see through the trickle-down nonsense, especially since we’re in a depression today with no end in sight.  How can anyone vote for people who want to apply more of the same policies?  It defies common sense.  It’s illogical to expect letting rich people keep more of the huge incomes they amass collecting payments for goods and services from everyone else to somehow create benefits for the rest of us.  Where do people think money comes from?

Admittedly, the economic explanation is subtle.  Earlier this week Ed Schultz tried to explain why trickle-down is wrong, and his main argument was the record of the past 30 years.  That alone should be enough, but he did not articulate the Keynesian explanation. The MSNBC analysts and their guests should do so, because it’s not that hard to understand: Investment and jobs come in response to consumer demand, and “effective demand” is reduced (i.e., the proportion of income spent on consumption declines) when the tax burden is shifted to lower-income people (who spend most or all of their income) from rich people (who do not).  That truth is a cornerstone of Keynes’s macroeconomics, and the validity of the point has been proven over the last 30 years as tax cuts for the rich have consistently resulted in reduced economic activity and growth, to the point of depression.

Romney’s presidential bid may be weakening with his claim that 47% of Americans don’t pay income taxes, and that they are shirkers.  Here is Romney’s recent statement at a fundraiser (Fact-checking Romney’s “47 percent” comment) :

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it — that that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. … These are people who pay no income tax. … [M]y job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.

Never mind that they are the poorest in our society, and that poverty is on the rise.  Never mind that they pay other, income-regressive taxes (like sales taxes) in greater proportion. But what makes the rich victims?  Why do they feel so entitled?  Edward Filene once candidly remarked: “I don’t mind giving half of my money to the people; I got all of it from them.”  But the prevailing view in the Romney camp is that the rich got their money entirely on their own.  They needed no help from the economy, or the government, their employees, or from anybody or anything else.

This arrogant, self-serving perspective leads to the most anti-social positions imaginable. When people lose their jobs because of unemployment caused by Republican austerity policies, the job destroyers blame it on the victims, who are told in Romney’s words, “they should take personal responsibility and care for their lives.”  And there is no apparent concern that Romney himself, a very wealthy man, pays income taxes at rates no higher than those applicable to people living in poverty.

But this perspective is as hypocritical as it is arrogant.  The rich are silent when their instruments of wealth accumulation — their corporations — pay no taxes or receive huge government subsidies (e.g., G.E. or Mobil/Exxon) or bailouts (e.g., A.I.G., Citibank, or Bear Stearns).  These corporate “people” are not asked to take “personal responsibility” because they are seen as “too big to fail.”

Unfortunately, most people don’t see how Republican policies are hurting them economically.  As economist/sociologist Robert Reich recently discussed (Why Romney and Ryan are Going Down), the Romney/Ryan ticket is losing support mainly because “they’re relying largely on one slice of America – middle-aged white men – and alienating just about everyone else.”  And, as Reich explains, the growing alienation is evidently based more on social than on economic issues.  Republican policies target women on wage equality and reproductive rights, and target minorities on issues like immigration, while Romney openly declares his indifference towards these voters.

Beyond that, however, people should be equally concerned about the Republican economic policies, which are draconian.  As Reich explains:

Paul Ryan’s budget plan – approved by almost every House Republican and enthusiastically endorsed by Mitt Romney – would have allowed rates on student loans to double, adding an average of $1,000 a year to student debt loads. (Under mounting political pressure, House Republicans came up with just enough money to keep the loan program going safely past Election Day by raiding a fund established for preventive care in the new health-care act.)

Now Romney wants to hand the federal student loan program over to the banks, which will charge even more. Earlier this year he argued subsidized student loans were bad because they encouraged colleges to raise their tuition, and suggested students ask their families for money.

Republicans have even managed to antagonize seniors by seeking to turn Medicare into vouchers whose value won’t keep up with rising healthcare costs, and cutting $800 billion out of Medicaid (which many seniors rely on for nursing home care).

For decades, the wealthy have been enlisting government in the cause of amassing wealth for  themselves while condemning government as an evil presence in our society.  From their point of view, they are entitled but others are not.  They are the good guys, and others are lazy shirkers.  As economist John Kenneth Galbraith once put it, the supply-side, trickle-down philosophy amounts to this:  The rich do not have enough money, and the poor have too much.  Today’s Republican campaign platform embodies that philosophy.

But how much would be enough?  Today, the top 1% of income earners now own about 50% of financial wealth.  They take in almost 25% of total income, and since 2010, 93% of all new income growth is going to the top 1%.  Billionaires in the top 400 American households, who have more income than the bottom one-half of all American households, are responsible for much of this attitude.  At some point, one would think, they should be satisfied.  Yet they persist.

Earlier this week (September 17, 2012) the New York Times reported that the top 1%’s corporations are beginning to see earnings decline, after years of growth, because demand for their goods and services is declining (Earnings in the United States Are Beginning to Feel a Pinch).  We’ve evidently reached the point in our depression where the rich are even beginning to hurt themselves with their ceaseless pursuit of more wealth.  Yet they persist.

The motivations of the rich seem to go well beyond mere greed.  But what else might they want?

JMH – 9/19/2012

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One Response to Romneyhood – More Than Greed

  1. Abbondanza says:

    “The motivations of the rich seem to go well beyond mere greed. But what else might they want?”

    An excellent question. I’m disappointed somebody smarter than me hasn’t answered it.

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