In case you have not heard, Former House Republican Leader Tom Delay has said, "And if McCain does not define him [Obama] as what he is — hey, I have said publicly, and I will again, that unless he proves me wrong, he is a Marxist." Delay made these remarks on the Mike Gallagher radio show yesterday (Thursday, June 5, 2008).
Perusing the responses to this story on The Hill's blog, it seems that many Americans need a primer on how it is the wealthy who have already created a "Marxist" state, draining money from the working poor and middle-class and funneling it UPWARD to the wealthy.
In his New York Times bestseller, "Perfectly Legal: The Covert Campaign to Rig our Tax System to Benefit the Super Rich--And Cheat Everybody Else", Pulitzer Prize-Winning Reporter David Cay Johnston has this to say about our tax system.
"That is, the money was used in a socialist scheme to redistribute income. Only instead of taking from those with big incomes to dole out money to the poor, this money was use to redistribute income up."
"Much of the political rhetoric in America for the past three decades has been about redistributing income. Politicians in both parties has sought votes by fostering the idea that hard workers in the middle class and the highest income earners are being squeezed to subsidize the indolent poor. If that were true, it would be an important story. But the flow of Social Security taxes does not substantiate this deeply ingrained societal myth."
"Instead, what happened was that the working poor and the middle class, indeed everyone making up to the maximum wage taxed for Social Security, paid more taxes than were needed to allow generous tax cuts for the rich. This meant that the rich could save more and everyone else had to save less. Keep in mind that, after adjusting for inflation, the richest 13,400 households had more than five dollars ini the year 2000 for every dollar they had in 1970 while the remaining 99 percent of households had only eight cents more per dollar." (Johnston, p.126)
If you made $10,000 a year in 1970, adjusted merely for inflation, that same job in 2002 should be paying you $40,400. (Johnston, p.27)
Of course, we all realize that this growth in wages never happened for the average American. In 2003 dollars, the average wage in the U.S. was $36,573. In 1999, the average wage had increased to just $40,330 (again in 2003 dollars). In other words, over thirty years, the wages of some 80% of Americans either declined or stagnated. (Johnston, p.31)
Throughout this same period, the wealth of the top 1% of the population flourished.
This came about as a result of wage-cuts by corporations, tax cuts for the wealthy, loop-holes unexploitable to conventional wage-earners, and (actually) tax increases on the poor (mostly through the social security tax).
What would happen to the cost of dishwashers in Ohio if all the dishwashers in the state could get together and require that no one could work as a dishwasher unless they passed a stringent test? This would require understanding at what temperature bacteria is killed, which cleaning solutions leave dangerous residues, and so forth. The dishwashers would argue that they were trying to protect public health and provide quality service.
Well, obviously dishwashers cannot do that. Otherwise, the supply of dishwashers would be constrained, pushing up real wages of those who can pass the test. In other words, the cost of dishwashers would be much higher than what they are today.
Amazingly, there are numerous industries in the United States that can do just what I described above. They are known as "professionals" as opposed to "blue collar workers." Doctors, lawyers, architects, accountants, and numerous other "white collar" industries may lawfully constrain supply of competitors, keeping wages artificially high.
Q: Who writes the law exam?
A: Existing lawyers.
Q: Who decides how many will pass the exam each year?
A: Existing lawyers.
Isn't that convenient?
Lawyers may lawfully restrict entrance into their industry, propping up their own wages at the detriment of the consumer.
Now, I am not picking on these professionals just because I can. I am picking on the unfair advantages that members of the political donating class have over blue collar workers.
This is one of the most important takeaways of the book entitled, "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer" by Dean Baker of the Center for Economic and Policy Research. The book is absolutely fantastic and should be read by every Progressive in preparing for the battle ahead. (It is obviously also the source of the title of this diary.)
Here are a few choice snippets from the introduction to the book, which can be downloaded as a pdf for free (Baker, pp.1-3):
"Conservatives want to use the government to distribute income upward to higher paid workers, business owners, and investors. They support the establishment of rules and structures that have this effect. First and foremost, conservatives support nanny state policies that have the effect of increasing the supply of less-skilled workers (thereby lowering their wages), while at the same time restricting the supply of more highly educated professional employees (thereby raising their wages)."
"Conservatives don’t only rely on the nanny state to keep the wages of professionals high, they want the nanny state to intervene through many different channels to make sure that income is distributed upward. For example, conservatives want the government to outlaw some types of contracts, such as restricting the sort of contingency-fee arrangements that lawyers make with clients when suing major corporations (conservatives call this "tort reform"). This nanny state restriction would make it more difficult for people to get legal compensation from corporations that have damaged their health or property."
Conservatives also think that a wide variety of businesses, from makers of vaccines to operators of nuclear power plants, can’t afford the insurance they would have to buy in the private market to cover the damage they may cause to life and property. Instead, they want the nanny state to protect them from lawsuits resulting from this damage. Conservatives even think that the government should work as a bill collector for creditors who lack good judgment and make loans to people who are bad credit risks (conservatives call this "bankruptcy reform").
In these areas of public policy, and other areas discussed in this book, conservatives are enthusiastic promoters of big government. They are happy to have the government intervene into the inner workings of the economy to make sure that money flows in the direction they like — upward. It is accurate to say that conservatives don’t like big government social programs, but not because they don’t like big government. The problem with big government social programs is that they tend to distribute money downward, or provide benefits to large numbers of people. That is not the conservative agenda — the agenda is getting the money flowing upward, and for this, big government is just fine.
Of course, conservatives don’t own up to the fact that the policies they favor are forms of government intervention. Conservatives do their best to portray the forms of government intervention that they favor, for example, patent and copyright protection, as simply part of the natural order of things. This makes these policies much harder to challenge politically.
It is not surprising that conservatives would fashion their agenda in a way that makes it more palatable to the bulk of the population, most of whom are not wealthy and therefore do not benefit from policies that distribute income upward. However, it is surprising that so many liberals and progressives, who oppose conservative policies, eagerly accept the conservatives’ framing of the national debate over economic and social policy. (snip) As long as liberals allow conservatives to write the script from which liberals argue, they will be at a major disadvantage in policy debates and politics.
Turning back to our Marxist tax system that favors the rich at the expense of the poor, remember one thing: having money in hand today will allow it to grow tomorrow (so paying taxes today is "bad" in that it reduces your money available for investing).
Let's think about retirement for a second. If I want to save for my retirement, I have to use an IRA account, which has a maximum contribution level ($5000 in 2008 for individuals below 50 years of age). That money can grow untaxed (assuming I use a Traditional IRA), whereupon I can pull it out (and taxes are due). Or I can use after-tax monies, placing my money in my Roth IRA. Naturally, if I use after-tax monies today, I have less money to invest. This sounds "normal" for most people.
Elites who control corporate entities, however, can exploit what is known as "deferred compensation." This is a scheme wherein the executive chooses not to accept part of his/her salary today, and then "defers" it till a future date.
What usually happens is that the firm takes the salary and places it in a trust, which invests the money tax-free until the individual decides to withdraw the money upon retirement.
In other words, it's like having a Traditional IRA account with no maximum contribution level (other than the salary amount)!!!
David Cay Johnston details this, as well as many other such loopholes that benefit the rich, in his book "Perfectly Legal."
"When Michael H. Jordan was chief executive of Westinghouse Electric, for example, he deferred $1.8 million in bonuses in 1994 and 1995. The company agreed to pay him interest at a rate equal to the 10-year Treasury notes, about 7 percent at the time. However, if when he retired it turned out that he would have made more money by investing his deferred money in shares of Westinghouse, then he'd be entitled to the higher amount. If the price of Westinghouse stock fell, shareholders would lose, but the chief executive's investment was guaranteed to profit." (Johnston, p.52)
Sounds like a pretty good gig to me!!!! Rememeber: It is better to put off taxes for as long as possible so that your principal can grow.
For those who are interested, David Cay Johnston has a separate book, entitled, "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill)." I recommend it as well.
Everyone should arm themselves with the knowledge in these three books, so as to take away the "Marxist Framing" that is always used against Progressives seeking economic justice.
The Republicans have done a very good job of convincing people that wages should be taxed and wealth should not. This has allowed "just 28,000 men, women and children to hold as much income in 2000 as the poorest 96 million Americans. Each group had about 5 percent of all reported income that year. To visualize the enormity of this chasm imagine these two groups in geographic terms. The super rich would occupy just one-third of the seats at Yankee stadium, while those at the bottom are the equivalent of every American who lives west of Iowa--plus everyone in Iowa." (Johnston, p.41)
It's time to start shining some sunlight on the Republican mold.
UPDATE 1:
The meme continues. According to Media Matters, "On the June 6 broadcast of his nationally syndicated radio show, The Savage Nation, host Michael Savage repeatedly referred to Sen. Barack Obama as an 'Afro-Leninist.' Savage stated: 'If the other side had one decent candidate, one real conservative, he would win 70-30. But because we have a retread, a Bush III, it's going to be very doubtful as to whether or not we can avoid outright Marxism and Afro-Leninism running this country.' (snip) On his April 14 broadcast, Savage asserted that Obama is 'a Marxist in his heart,' adding, 'He's an Afro-Leninist, and I know he's dangerous.'"
(Source:Media Matters)