After 30 years of re-engineering our nation’s economy and tax code to deliver huge benefits, free of charge, to the wealthy, the most massive transfer of wealth in the history of the world —a transfer of wealth that has led to now catastrophically failed wealth disparities between the wealthiest and the poorest—, we have not seen the wildly prolific job-creation that was promised. Indeed, we have seen our manufacturing base stripped away piece by piece and our middle class society systematically eroded.
Now, after 10 years of massive tax breaks for the wealthiest people in the history of humanity, we have seen a further concentration of wealth and a further erosion of the open market for employment and innovation. The 400 wealthiest people in the United States now control more wealth than 155 million people at the other end of the socio-economic spectrum combined. The tax cuts that were supposed to be given to the “supply side” were never given to the supply side at all, only to those that seek to own it.
To distill the complicated economics down to simple terms: Why should the rich “create jobs”, why should they put money into wages in order to build businesses to make profits, when it’s being handed to them in unprecedented amounts, for free? That’s the real problem. When the government takes money from everyone, then hands it out to the wealthiest among us, it has the direct effect of disincentivizing investment by those individuals and interests in the creation of new businesses and new jobs.
It is economic incentive that drives enterprise, not the supposed nobility of spirit of the wealthy. That idea is aristocracy: that the ruling class is there because they deserve to be, because they are uniquely noble, because they have arete —excellence and a commitment to justice and humane values, to the better interests of society at large. Our nation is founded on the self-evident truth that medieval aristocracy is a lie, and that powerful elites do not tend to give their power and privilege back to the people.
It makes no sense to be fostering a new aristocracy, to be transferring literally trillions of dollars in wealth, as a matter of national policy, to the wealthiest people in our society. There is no economic reason for doing so. There is nothing about that process which upholds or defends democracy. Much to the contrary, the massive and unprecedented transfer of wealth from ordinary, working Americans to the already wealthy —which began with Ronald Reagan and accelerated to warp speed with George W. Bush’s 2001 and 2003 tax cuts—, has crippled our economy and removed any incentive major financial interests have to invest in widespread job creation.
If you believe a vibrant middle class is essential to fostering generalized citizen participation and real elective democracy, then the collapse of that middle class, the decline in household wages, the rapid escalation in bankruptcies and home foreclosures, should worry you. Even if you are a billionaire, it should worry you, because the erosion of our middle class, the gutting of funds from our educational system, the prioritization of billionaires and multinational corporations, is eroding our democracy itself.
When Vice President Joe Biden left the Senate to join the Obama administration, he was the only member of the United States Senate who was not a millionaire. He had not used his office to enrich himself or his family, and he had not played the game of Washington insider. He was not a celebrity and he did not view politics as a battle for cold, hard cash. He made policy based on how it would affect ordinary citizens, local communities, the real human freedom of people he knows and understands.
As the Senate became the world’s most powerful millionaire’s club, it became harder and harder for ordinary people to break into politics. The power of the two-party system had made it risky for anyone not to support the one of the two parties most friendly to their views, because even the slightest erosion of support for one of the two parties is now translated, through furious and misleading reporting of public opinion poll numbers as a “gain” for the other party.
As the concentration of wealth in the hands of the few has accelerated, and the concentration of political power in the hands of the wealthy has followed along, the outright lie that tax cuts for the wealthy are the best, indeed the only, way to create jobs continues to have widespread support. Though real people living in the real world can see with their own eyes that fundamental pillars of our democracy are being eroded, or even eliminated, while parents across the country know what it would mean for the House of Representatives to strip funding for Head Start, for public education and for college financial aid, the transfer of wealth goes ahead, and the job creation boom to which innovative, hard-working, democratic Americans are entitled, continues to stall.
There should be an indefinite, blanket moratorium on wasteful wealth spending.
Since we know that spending trillions of dollars on tax cuts for the wealthy is counterproductive, does not create jobs and is undermining our democracy, every independent voter, every Democratic and every Republican voter, should demand of every elected official that they cease to prioritize the giveaway of taxpayer money to those who have no use for it and will not use it to invest in rebuilding the middle class.
Tax cuts for the wealthy do not create jobs. Tax cuts for the wealthy are not a constructive way to build democracy. Tax cuts for the wealthy are not a sound investment for the already embattled middle class. Every proposed cut to social spending, every proposed tax break for millionaires and billionaires, is part of the same process of eroding our middle class and shoring up the long-term power interest of the already powerful.
It should not be the economic policy of a middle class democratic republic to prioritize the protection of millionaires and billionaires against economic hardship, when the economic hardship of the moment was created specifically and through many years of coordinated effort, by the mismanagement and bad practice of that very “investor class” that seeks to give the real power in our society to banks, hedge funds and offshore interests.
Whether by incompetence, ignorance or malice, the financial industry was hijacked by a logic of might makes right: anything that can be done to expand wealth, any “instrument” that can be devised that will make the digital, ethereal wealth of our times appear to increase, was to be cultivated, protected and propagated, regardless of the risk to the wider society or to the health of our people and our democracy.
The financial collapse of 2007 and 2008 was not brought about by working people’s mortgages; it was brought about by major financial interests that had agreed, implicitly and explicitly, it was no longer of any importance whether major national investment strategies represented real wealth or spurious wealth claims; what mattered was that those at the top could benefit from implementing the strategies.
That is what was done with our trillions of dollars in wealth subsidies: while the American people were told that tax breaks for the wealthiest of the wealthy would lead to widespread job creation, the money was devoted to creating entirely new markets where only money would be needed to make more money. Gone were the heady old days when earning millions was supposed to represent investment in an actual enterprise doing actual business, building a better society.
There should be an indefinite, blanket moratorium on wasteful wealth spending, because the work of our age needs to be the reinvention of our economy, the reversal of this egregious and undemocratic transfer of wealth from the tens of millios to the 400, and the restoration the principle that if it’s good for America, it’s because it’s good for building a vibrant, free and educated middle class that actually has the power to govern its own future and to steer the ship of state.
SOME DATA: The top 20% of the socio-economic pyramid in our country control well more than 80% of all the wealth. Just the top 1% control 40% of all financial investment assets.
In 2001, George W. Bush inherited a 10-year budget surplus of $1.7 trillion. His 2001 and 2003 tax cuts plunged the government into deficit spending, immediately. By 2002, the surplus was already erased, after just one year of the long-term tax cut plan.
By 2009, when Bush left office, he had doubled Defense spending, pledged over $1 trillion to banks, and average household incomes had FALLEN by more than $2,000 per year.
The result of these policies was: 25% of all American children living in poverty, near 10% unemployment (officially), as high as 25% among young people and well over 30% among some minority communities.
In 2008 and 2009, the nation saw record bankruptcies, record rates of home foreclosures, and despite massive investment in recovery efforts, in 2009 and 2010 job recovery has been slow to non-existent. The reason: even as banks and wealthy investors began to see their economic engine revving up again, they saw no economic incentive at all to invest in job creation.
The wrong kind of tax policy was giving them cash for nothing, and incentivizing them to invest it in money-for-the-wealthy financial schemes that don’t support small business, manufacturing, entrepreneurship or job-creation.