Wednesday, September 21, 2011

So this is how it ends...

Too little, too late, Obama's staked some ground for 2012. Let's have an election decided by the question, "Should people making over a million dollars a year pay the same percentage of their income in taxes as people struggling paycheck-to-paycheck?"

The argument against the so-called 'Buffett Plan' will be that any increase in taxes paid by these multi-millionaires will reduce their investment and thus reduce their job creation. (Note they are multi-millionaires because the new rule would apply to people making over a million bucks a year, not people with a million bucks. That would be even better, but Obama won't dare go there, for reasons I'll get into in a paragraph or two.

Leave aside the fact that 75% of the U.S. economy is based on retail spending, and that a.) people making $1M+/year are already spending all they want, and b.) their marginal spending comes from buying Ferraris, not Fords, and Veuve Clicquot, not Two-Buck Chuck. So giving them more disposable income actually results in an economic boost for Italy and France, not us. And what? Are they going to invest it in the stock market?!? The market rewards companies that move jobs to Viet Nam, not companies that create jobs here. Then those investors blow their lightly taxed capital gains on Ferraris and Veuve Clicquot.

But none of that matters, because any argument about the net economic effect of such a tax is just a straw man.

The real issue here is that Americans have always been remarkably optimistic about their own economic futures. This has been true in fat times and lean; during the years leading into the baby boom, when the American Dream seemed like manifest destiny -- and things really were just getting better and better for most people -- most people thought they'd get even more better (if you can follow that tortured sentence.) And in the depths of the Depression, when things were getting worse and worse for most people, most people didn't think things were going to get quite as bad as they did. Yep, Americans have always been economic optimists -- or they've at least been insufficiently pessimistic in even the worst of times.

That means that a ridiculous percentage of the population entertains the fact that they themselves might someday be rich, and they vote accordingly. Remember Joe the Plumber? The moron who didn't want to raise taxes on people earning $250,000 or more a year because he thought that some day he might buy the plumbing company he worked for, and then he'd be saddled with those extra taxes? Obviously, he was just a dupe, part of a grand media setup by a cabal that stretched from Karl Rove to the Koch brothers, but the story angle that didn't get any traction was that people who were plumbing contractors -- people doing the job that Joe the Plumber aspired to -- were, like, He's going to make 250 grand doing this? He's on crack. The vast majority of plumbing contractors, including the guy who really did own the company Joe the Plumber dreamed of buying, told journalists that 250 grand was totally out of the question.

Rove's (and his ilk -- it's basically a cabal that's loosely organized but which is operating in shared self-interest -- I'll call them the Republicabal...) Where was I? Oh yeah, Rove's plan, all along, was to complete a massive transfer of wealth from the bottom 90% of the population to the top 1%. (People in the 90th-99th percentile for wealth and income weren't really scheduled to benefit from the Republicabal's plan, but 'trickle-down' economics does work in the sense that it trickles from the top 1% down to about the top 10%. So the wealthiest 10% of voters could be expected to support the Republicabal just by voting in their own interest.)

But obviously, 10% of the population can't swing U.S. elections on their own. To pull that off, the Republicabal had to first eviscerate America's public schools, to dumb the population down as much as possible. Then, they had to fragment chunks of the electorate who were committed single-issue voters -- gun rights activists, anti-abortion fundamentalists, people who hate crash helmets -- and pander to them. That gave them a pretty sizable minority to work with as a political base.

But it still wasn't enough to swing elections in many areas. Once they'd dumbed down the population, they could steep the Tea Party zealots in the idea that, despite the fact that the average American is paying a smaller percentage of his income in tax than at any time since WWII, it was taxes that were keeping the population down. (Not, for example, the way the wealthiest handful of industrialists had moved every middle-class American job offshore.)

They also worked hard to disenfranchise the poor. But even adding up all the rich people, plus all the people who aren't getting poorer, plus all the gun nuts and all the religious fundamentalists, and all the Tea Party kooks and half-wits, and taking many of the frustrated poor off the ledger could not quite swing most elections. So how did they succeed in getting more than half the population to vote their way?

The average family in the wealthiest 1% of the U.S. population is now over 50 times as wealthy as the average family in the bottom 99%. That's a concentration of wealth that exceeds countries in Central America - or, say, Libya - where an army of secret police is (was) required to prevent a popular uprising. The Koch brothers are no more capable of withstanding a popular uprising than Kaddafi was, so what gives?

How they succeeded, and what gives, is this: the swing vote in every recent election was made of Americans who, in good times and bad, remain irrationally optimistic. (OK, in times as bad as these, let's call them insufficiently pessimistic.)  Yes, there are millions and millions of American voters who, in the face of all the evidence and against all of their direct personal experience find themselves thinking, But what if I get rich? Then, I'll want to keep all my money, just like these guys. It's the political equivalent of 'The Secret'.

The old idea of The American Dream is politically sacrosanct. There have been long stretches in American history, too, when it really seemed to apply. If you worked hard, and lived right, it was almost a certainty that your kids would do a little bit better, even, than you did. Now, that is a dream. But it's unlikely any Democratic candidate will dare to tell the American electorate the truth.

If they did, here's what it would sound like:

If you're in the bottom 90% of the population in terms of wealth, you have seen and will continue to see a drop in your purchasing power and wealth for the foreseeable future -- IE, for the rest of your life. If you're in the 90th-99th percentile on the wealth curve, you can expect to break even. If you're in the top 1%, you're going to get richer. If you're in the top 0.1%, you're going to get exponentially richer. Congratulations! You're one of the American Kaddafis (for now.)

If this sounds like a rabble-rousing rant, it isn't. The Republicabal's plan worked. They won. It's unlikely, at this point, that the U.S. could reverse the course they set, even with all the political will in the world. Rebuilding the educational system alone would bankrupt us. We'll have our hands full taking care of the tens of thousands of seriously injured war veterans who gave limbs, eyes, and faces to enrich Haliburton and stroke the ego of America's second-stupidest President (and who sacrificed themselves in a second, ill-considered and unstrategic war against opponents -- like the Taliban and Al Qaeda -- that at least presented us with targets worth punishing -- even though we essentially created or at least empowered the Taliban in previously ill-considered support of the Taliban's fight against the Russians. Help drive the Russians out of Afghastlystan? That was the worst idea ever. If the Russians had still been bogged down there at the turn of the millennium, 9/11 would have been perpetrated against Moscow, not New York. We should have let them punch each other out for decades. But that is rant, and one for another time...)

The future, for the vast majority of us, has nothing to do with improving our situation. That isn't going to happen. It has everything to do with finding ways to be satisfied with less. That will do us all some good.


  1. Mark, I couldn’t have said it better myself. The only thing more exasperating about what passes for politics in this country is the extent to which the majority of people can’t accurately finger the cause of our problems. I hadn’t really considered the “Why Johnny Can’t Read” angle, but it makes one think.

    I smirk cynically at “second-stupidest” president as it’s clear “stupidest” offers some choices.

  2. In addition to the effects of pessimism in the vein of the "American Dream", it's worth talking about the psychology of last-place aversion. From the article, which summarizes a relatively new study, "some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions".

    As John Gruber of DaringFireball said, "In short: spite."

    So I think you might be right that it's now irreversible. To have the bulk of the population just above the bottom means that politics and societal views are shaped by last-place aversion.