Friday, October 14, 2011
The Swamp We're In -- came from NOT TAXING THE RICH
Seems to me that the 53% of us who pay taxes -- and especially those like you who are in the middle third of that bracket -- are the ones who really got screwed by the cockeyed Trickle Down scheme for not taxing the Rich and the Super Rich at all -- or maybe only at half the rate their secretaries pay. So our current tax scheme probably needs an adjustment it won't get.
You might spend some time parsing Paul Krugman, who has many interesting takes on why continuing to think inside the box will get us deeper into the swamp.
Of course, Krugman won't go for the Trickle Up! Economics miracle that would actually pull us out of the mess fairly quickly. The problem now is that there's no liquidity at the bottom of the system. The top's doing fine ....
Sometimes it seems to me that all economic theory is just cleverly disguised political theory aimed at promoting the interests of a particular class at the expense of the others. We've mostly been fascinated by one variant or another of eitehr Keynesian economics or Trickle Down economics since the thirties -- since, in fact, Keynes proposed it. And the result has been that 37% of this country is stuck below the poverty line, while 10% of the country owns 90% of the wealth producing assets. The "middle class" -- YOUR 53% -- has been shafted by the R&SR clique, and even worse, the "middle class" by and large has bought into the notion that "cutting the deficit" will somehow ameliorate our current economic malaise. The ill-gotten gains enjoyed by the super rich combined with a climate of financial de-regulation and two long-running very expensive foreign wars to produce, first -- the housing bubble and (2) now a self-defeating spiral into what seems long-lasting, if not a terminal recession.
Quite a lot of the smart money went over to China during the last 20 years -- chasing high returns in Chinese industries blessed with very low wages and a government that provides neither health care, health insurance, a social safety net, financial regulation nor any pollution controls. Without those blessed benefits of the pirate/slave economy, bolstered by Western investment, your iPhone never would have happened at a cost-effective price, and Steve Jobs would have continued floundering along like he did with the NEXT.
Jeffrey Sachs has argued persuasively that general prosperity won't return to America during my lifetime because there has been little investment in education, worker training, infrastructure ... and without a balancing overhaul of the tax code, we're all down the tube anyway.
My favorite part of the Chinese swindle over the last 20 years is the reverse mergers scam -- 18 Billion dollars worth of good ole American dollars contributed mostly by medium and small investors.
You could simplify it all by opining that Trickle Down economics and/or Keynesian economics produced disproportionate prosperity for the rich and the super rich, who invested in China. But at least we can all be glad we sent the pollution overseas and got back some really cool gizmos that make it easier to send email and take pictures. That was a fair trade, right? mmmmmm ...
You might loke at Oliver Stone's documentary South of the Border if you'd like a clearer understanding of how difficult it is to change the corporatist economic policies that prevent real general prosperity. Those policies were part of the American hegemony that impoverished most of Latin America.
More of the same will only get us more of the same.