The polls weren’t great this past election season. If they were more accurate, tonight’s special election in Georgia would not be for control of the senate, Democrats would already have it.
Donald Trump continues to attempt to scare Americans into voting for him, painting a doom-and-gloom portrait of a collapsing U.S. economy should they elect Joe Biden president this November.
Wall Street and big bank economists, however, paint a very different picture.
CNBC’s Jim Cramer blasted the U.S. response to the Covid-19 pandemic on Monday. He compared the Trump administration’s handling of the crisis unfavorably to other countries.
The CNBC analyst was not impressed by President Donald Trump’s Sunday interview with Fox News’ Chris Wallace.
“It is interesting to hear, in that interview with Fox that the President is very against masks and he’s very in favor of masks,” Cramer said.
“That’s a tremendous thing to be able to do within a span of 90 seconds!” he mocked. “I’ve never seen anything like it!”
Cramer then defended Dr. Anthony Fauci, who’s come under sustained criticism from within the administration.
“Dr. Fauci is an amazing man, because he takes a licking keeps on ticking,” he said. “I don’t know why he stays.”
He struck a far less positive note about the U.S. response to the virus, however.
“I’m trying to figure out what kind of disaster that our country has had that’s ever as bad as this that’s been self-inflicted,” Cramer said.
“Given the fact that Vietnam has no deaths, Japan has very few deaths, South Korea has so few deaths, Taiwan almost no deaths. Those are big, big countries. And
they’re faring so much better
Writing for CNN, Matt Egan recently reported, “US credit card debt suddenly reversed course in March and fell by the largest percentage in more than 30 years. At the same time, savings rates climbed to levels unseen since Ronald Reagan was in the White House.”
The Treasury Secretary has said the U.S. could reopen as early as May. Steve Mnuchin told CNBC that the economy will open for business when the President feels the time is right.
Mnuchin spoke to CNBC’s Jim Cramer on Thursday about the much vaunted effort to get Americans back to work.
“Do you think there’s a possibility, if the doctors let us, that we could be open for business in the month of May?” Cramer asked.
“I do, Jim,” Mnuchin replied before framing the question in terms of President Trump.
“I think as soon as the president feels comfortable with the medical issues, we are making everything necessary that American companies and American workers can be open for business and that they have the liquidity they need to operate their business in the interim.”
Trump is anxious to get people back to work because of the serious toll Coronavirus has taken on the economy. He has repeatedly suggested easing restrictions for economic reasons.
The President said on Wednesday that “it would be nice to open with a big bang” but agreed that the disease should be in decline before that decision could be taken.
“We have to be on the down side of the slope,” Trump said.
However, Dr. Anthony Fauci warned on Thursday that getting the country back to normal wouldn’t be easy.
“When you’re talking about getting back to normal, we know now that we can get hit by a catastrophic outbreak like this,” Fauci told NBC.
“It can happen again, so we really need to be prepared to respond in a much more vigorous way.”
The economic impact of Coronavirus has been severe. Unemployment claims rose by 6.6 million in the past week.
In his State of the Union address earlier this month, President Trump celebrated the putative success of the economy he claims to have built, doing so in historic terms: “I am thrilled to report to you tonight that our economy is the best it has ever been,” he boasted.
And yet, at the same time, budget deficits and the national debt continue to surge, revealing that Trump’s policies are not designed to fuel an economy for the long haul but rather that currently the U.S. economy is running on a sugar high, showing the potential to crash at any moment.
While the stock market is performing at record levels, the national debt has also surged to record levels, surpassing $23 trillion for the first time in history and promising only to bloat more. Over the first four months of 2020 fiscal year, the deficit is outpacing last’s year deficit expansion by 25% in the same time frame. Over the past 12 months, the deficit has expanded $1.1 trillion.
Bess Levin, writing for Vanity Fair, gives perspective to the horror of Trump’s sugar-high economy when she writes, “Incredibly, this is all happening against the backdrop of the longest economic expansion on record and the lowest jobless rate in 50 years, conditions that typically cause the budget deficit to shrink.”
Trump promised, of course, that the enormously generous tax cuts he bestowed on corporate America and the wealthiest Americans would spur a growth that would cover the cost of tax cuts and more, spreading prosperity to all Americans. (Of course, let’s not forget he campaigned on the promise he would, in fact, eliminate the debt entirely, which at the time stood at approximately $19 trillion.)
Yet while the GDP grew 2.9% in 2018, growth slowed to 2.3% in 2019 as the debt and deficit swelled to historic proportions.
Days after Trump’s State of the Union peacocking, Vice President Mike Pence defended Trump’s deficit expansion in an interview with CNBC.
Here are a few of his responses which not only recycle the stale—because failed—narratives of trickle-down economics and of tax cuts paying for themselves, but also grossly distort history, falsely claimly Trump inherited an economy in decay, as opposed to one of the most steadily expanding economies in history the Obama administration engineered. Pence prevaricated as follows:
“The president came into office and he said, ‘First and foremost, we have to restore growth.’”
“Deficits and debt are right in line, but it is first about getting this economy moving again and we really do believe the trajectory of this economy.”
“Once we get this economy rolling, we’re going to work real hard, not just to get President Donald Trump four more years in the White House, but we’re going to make sure we have a Republican Senate and a Republican House to keep America growing and to deal with those long-term fiscal challenges.”
The big lie here, of course, is Pence’s insistence that Obama did not have the economy rolling, that Trump needed to get it moving again.
Politifact reported, for example, having looked at the economic measures Trump invokes, that “the trend lines continued almost seamlessly from the second half of Obama’s presidency into the first three years of Trump’s tenure. Trump’s claim that he turned around a failing economy is wrong.”
Obama ran deficits and increased the debt doing the arduous work of pulling the nation’s economy out of a deep recession. Trump has been over-stimulating an economy that was already healthy, throwing money at the wealthiest while failing to invest in real growth for America, deceiving Americans it will trickle down.
Of course, the World Bank rejected the efficacy of trickle-down economics back in 2015, debunking it as a myth. The International Monetary Fund actually lambasted it as a joke.
Pence’s insistence on recycling this failed myth is basically an admission of Trump’s fraudulent mismanagement of the U.S. economy to the detriment of American lives.
Pence asserted that Trump sees “the real long-term solution to the fiscal challenges in Washington, D.C., is making sure the budget of every American is growing.”
And let’s not forget how growing deficits impact Americans’ economic well-being.
The ballooning deficit resulting from the Trump tax-cuts, for example, cultivated a fertile context for Paul Ryan and Mitch McConnell to loudly renew their insistence that cuts to Medicare and Social Security are necessary to address the out-of-control deficit their own policies immediately exacerbated. Far from benefiting Americans, these tax cuts, which were supposedly to trickle down, just keep cutting Americans and increasing economic precarity, not prosperity.
Trump himself recently confirmed
Recently Pulitzer Prize-winning reporters for The Washington Post Philip Rucker and Carol Leonnig published their assessment of Donald Trump’s presidency to date, seeking to step out of the news cycle and “assess the reverberations” of his administration throughout the nation. Titled A Very Stable Genius: Donald J. Trump’s Testing of America, the book layers scene after scene of Trump’s ineptitude, prioritization of self-interest over care for the nation’s well-being, and general lack of any moral compass or intellectual rigor.
As Dwight Garner, in his review for The New York Times characterized the tale Rucker and Leonnig weave, “It reads like a horror story, an almost comic immorality tale. It’s as if the president, as patient zero, had bitten an aide and slowly, bite by bite, an entire nation had lost its wits and its compass.”
The story is a compelling one, and one seemingly validated for Americans by what we have witnessed in the impeachment hearings played out in the House of Representatives and now in the ongoing trial in U.S. Senate.
The wealthy businessman Trump, corrupt to the core, is dismantling democracy and putting the nation’s well-being and security at risk for his own private gain and ego interests.
And yet we shouldn’t let the high drama of the very necessary impeachment process distract us from the more mundane threats to American democracy that seem to have become largely accepted in American life but which are no less deleterious to the American people and our supposed political ideals than Trump’s presidency is.
As an example of what I’m talking about, take billionaire Jeff Bezos and his Amazon empire, which includes, by the way, The Washington Post.
The admonitory slogan of The Washington Post is, of course, “Democracy Dies in Darkness.”
The sentiment is a warm and fuzzy one for sure, even articulating a noble mission and role for the free press in sustaining our democracy.
And Jeff Bezos’ dollars nobly enable that mission.
But what he “gives” with one hand (it is a business after all), he taketh with the other, underscoring the severely limited application of democratic principles throughout American society.
And can we call a form of government that limits democratic rights in practice a democracy at all?
Bezos’ Amazon, for example, recently threatened to fire its employees who spoke out publicly against the company’s environmental policies.
As Annie Palmer reported for CNBC earlier this month, employees reported that Amazon’s policy on workers’ external communications was updated last September and now “requires employees to seek prior approval to speak about Amazon in any public forum while identified as an employee.”
The Amazon Employees for Climate Justice tweeted in response to the suppression of employee free speech:
How will the world remember Jeff Bezos in the era of climate emergency? Will he use his immense economic power to help, or not?Please tell @Amazon and @JeffBezos: Our world is on fire & desperately needs climate leadership. Stop silencing employees who are sounding the alarm.
It needs to be stressed, of course, that Amazon’s suppression of its workers’ speech is not illegal and certainly not unique.
In other words, Americans do not enjoy democratic rights in the workplace. U.S. law allows for the denial of First Amendment rights when you are at work, as I’ve written about previously for PoliticusUsa.
So, as conceived currently in our nation’s legal codes, the most sacred tenets of democracy are only applicable in American life on a part-time basis. Ask Colin Kaepernick.
When you are at work for 40 to 60 hours per week, please know that democracy is on hold. Please leave your rights in your locker before you punch your time card.
Sometimes it’s even worse.
Remember Juli Briskman, a marketing executive at Akima, a government contracting firm, who was fired for flipping off President Trump’s motorcade while riding her bike? She wasn’t even at work. Because she had been photographed and the photograph had been published with great popularity, she identified herself to her company and was promptly called into a room and fired for violating code-of-conduct policies. Clearly, she did not have the right to express herself as she chooses, even outside of the workplace, without consequences for her employment.
Democracy dies in the workplace, and certainly at Amazon, where, similar to many companies, workers’ efforts to unionize are vigorously resisted. Like Target and Walmart, among others, Amazon has produced its own anti-union video that is part of employee training.
And the union structure, which collectively organizes workers and negotiates their rights and remuneration, is the main and really only means for workers to have a voice in their workplace, where they spend a good deal of their lives contributing to the world in which we all live.
Bezos and Trump have a long adversarial history, as they spar over the size of their . . . bank accounts.
foiled a Pentagon contract
When Josh Jacobs was drafted by the Oakland Raiders in the first round of the 2019 NFL draft, he received a signing bonus of $6.7 million. The story of the star running back from the University of Alabama quickly circulated, featured in the headlines in major media outlets such as USA Today, NBC News, ESPN, and more.
Perhaps the most prominent headlines highlighted how he used his hefty signing bonus to buy a house for his father. You see, Jacobs had been homeless as a child, living with his father and his siblings in cars or cheap and temporary hotel rooms. So, the purchase of the home embodied this reversal fortune, this achievement of success, most succinctly, for sure.
And one can understand why Jacobs’ story grabbed the headlines. Americans love this kind of success story: the rags-to-riches story, the story of individual success, not social success. In fact, the lowlier and more degraded the social conditions one had to surmount, the more people like the story.
Such stories as Jacobs’ move us, or distract us, to focus on and celebrate an exceptional rise to wealth rather than the rule and reality of poverty and homelessness in America, which, if not inescapable, is certainly difficult to escape.
Indeed, just last week, for CNBC’s feature section “make it,” Kathleen Elkins spotlighted Jacobs again along with other professional athletes, recounting how these stars spent their first big paychecks.
She quotes Jacobs’ reflections on his childhood:
“I normalized a lot of things growing up — like I never thought, Damn, I’m sleeping in a car.”
As for his hardship, he says philosophically, “I feel like it’s an advantage. Because I grind. I wouldn’t get complacent because I never had it easy.”
Jacobs’ normalization of poverty and homelessness mirrors that of the dominant American cultural and political mentality overall.
And when he talks about poverty as a kind of blessing or advantage, rather than a social ill or a failing of our social project that accounts for the waste, destruction, and suffering of millions of American lives, well, this kind of storytelling satisfies the dominant classes in America as well. It absolves us of responsibility for immiserating social conditions such as poverty and homelessness.
We don’t have to deal with the reality that the number of homeless has risen for third year in a row under Trump’s administration or that poverty, in places like West Virginia, is increasing rather decreasing, as the growing number of jobs available in retail and service industries do not pay a living wage. Or, more appropriately, if we recognize it, we are not responsible for it.
Last December, though, NBA superstar and social activist LeBron James released a commercial through Nike that challenges and makes the effort of re-writing the story of American success, of the American Dream itself.
Instead of simply focusing on the success of those who have made it out of poverty, James suggests we ask ourselves as a collective society why we allow and accept the degrading, miserable, life-repressing conditions in which so many live and work in the United States.
We tend not to ask these questions when we hear stories like those of Josh Jacobs because those stories focus on his millions and normalize, even valorize, the misery.
He forecasts a larger dream than that of individual success and riches. What could be, his commercial suggests, a more wonderful and meaningful dream than creating a society without poverty, in which people had their needs met and lived with dignity? What if that were the American Dream?
He narrates the commercial to change our dream, questioning how we tell success stories:
“We always hear about an athlete’s humble beginnings, how they emerged from poverty or tragedy to beat the odds. They’re supposed to be stories of determination that capture the dream. They’re supposed to be stories that let you know that people are special.
“But you know what would be really special? If there were no more humble beginnings.”
And James hasn’t just narrated this story in a commercial. He has realized this story in his f
ounding and creation of his I Promise school
What is the story of the U.S. economy?
Not unlike the proverbial elephant subject to scrutiny by a band of blind men, the nation’s economy is subject to multiple narrative descriptions depending on which component of the beast, whether our economy or an elephant, the blind man massages.
Some media pundits have argued that the historically low unemployment rates combined with record stock market performances attest to a strong economy that would propel Trump to victory in 2020 if only he were disciplined enough to stay on point about the economy, stupid.
Others claim focusing on these numbers is akin to grasping the trunk and the tail of the elephant, missing the bigger and much more accurate picture of an economy that has not just failed but actively assaulted the vast majority of Americans. MSNBC’s Stephanie Ruhle, for example, has been unrelenting in fleshing out this more comprehensive narrative, insisting, among other points, that the stock market and the overall economy are not the same thing.
It may very well be the more compelling storyteller, or the storyteller who gets access to the most air time, who tilts the 2020 election.
Robert Shiller’s recent splashy book Narrative Economics underscores this point in a general way, arguing that the popular and viral narratives purveyed about the economy don’t so much describe the economy but drive the economic events themselves, regardless of the truth value of the story itself.
As the Yale University professor and Nobel-prize winning economist told CNBC, “It may not be so logical. It may be more, as I said, of animal spirits. This is an emotion that you feel at a certain time that you sense you see in other people. So when you see other people feeling confident about the market, you feel more confident yourself.”
He attributes recent market strength, for example, to Trump’s storytelling prowess: “He’s a motivational speaker. We’ve never had a motivational speaker president before. He knows how to create animal spirits.”
What cannot be emphasized enough, however, is the importance of a crafting an economic narrative that aligns as closely as possible with our economic reality, generating the most effective understanding of the dynamics and performance of the economy–for good decision-making by voters and good policy-making by legislators.
How we tell this story is vital to lives of the American majority, which is why Shiller’s applause for Trump’s motivational stirring of animal spirits is absolutely misplaced and damaging to American lives.
As we get a hold of the entire elephant of the Trump economy, we find an economy on a sugar high, thriving on taxpayer debt, enriching even further the already wealthy, and heading for a crash.
As we limn this elephant, let’s start with the national debt and deficit. Trump inherited a strong economy, and it is typically during healthy economic times that the government pays down the national debt. But both the deficit and debt have grown under Trump’s administration, largely because of his tax cuts that served largely the wealthy.
Reports indicated that in October the federal government’s budget deficit ballooned 34% from a year earlier to $134.5 billion, projecting that the annual deficit will top $1 trillion for the first time in eight years.
The national debt, meanwhile, has surged beyond $22 trillion.
Hmmm. If the economy is booming, shouldn’t the federal government’s coffers be filling up and not depleting?
We can certainly understand how in a time of recession the government would need to provide economic stimulus and thus run a deficit, but when the economy is supposedly experiencing record performance?
When Trump slashed corporate tax rates from 35 to 21 percent, we were told, as usual, that these tax cuts would pay for themselves, create an economy that enriches us all.
Basically, Trump is using the credit of the American worker to enrich corporate America and the wealthiest of Americans. It’s as if, for most Americans, someone maxed out their credit cards and yet they got none of the benefit of the goods and services purchased.
These tax cuts benefited the wealthy and did not trickle down, despite Trump’s promises that companies would invest in workers and not cut jobs. Companies like AT&T, Wells Fargo, and General Motors lobbied for them, promising to re-invest their tax savings in their workers and companies to the benefit off the nation as a whole. And yet all of these companies have engaged in massive layoffs or plant closings. AT&T has eliminated over 23,000 jobs since the tax cuts went into effect, despite receiving a $21 billion windfall from the tax cuts with the prospect of cashing in an additional $3 billion annually in tax savings. In November 2018, GM announced it would be closing five plants, eliminating 14,000 jobs in communities across Ohio, Maryland, Michigan, and Ontario, Canada, while buying back $10 billion in stock and earning a net profit of $8 billion on which the company paid no federal tax. Other automakers have also slashed thousands of jobs, saving billions of dollars.Wells Fargo did raise the minimum wage of its employees, though the tax savings for the company were 47 times larger than the cost of that pay raise to the company; and the company announced its plans in September 2018 to eliminate 26,000 jobs, at the same time that it has raised health insurance costs for its employees.
homelessness in the U.S.
The wealth taxes Democratic presidential candidates Elizabeth Warren and Bernie Sanders have proposed continue to provoke the malice of Wall Street, corporate democrats, and now even other Democratic candidates running for president.
As I have written in PoliticusUsa.com (here and here), the intensity of the energy devoted to this criticism, combined with the lack of substance typically informing these critiques, is puzzling because the policies would impact, in the case of Warren’s proposal, only .1 percent of American households. The intensity seems disproportionate to the impact.
Is this outrage on behalf of the 99.9 percent of Americans?
Is the 99.9 percent of Americans voicing these criticisms?
Let’s look at who’s talking:
When Warren surged in the polls in September, CNBC published an article with the headline: “Wall Street Democratic donors warn the party: We’ll sit out, or back Trump, if you nominate Elizabeth Warren.” The article offered this quotation as representative of the widespread opinion among “high-dollar democratic donors and fundraisers in the business community”: “You’re in a box because you’re a Democrat and you’re thinking, ‘I want to help the party, but she’s going to hurt me, so I’m going to help President Trump.’”
To whom is this quotation attributed? The reporting tell us: “a senior private equity executive, who spoke on condition of anonymity in fear of retribution by party leaders.”
Clearly, this is a proud voice representative of average Americans worried about healthcare and how they’ll take care of their children and pay for college. In case you missed my irony, the opposite seems to be true.
A more recent critic appearing in the headlines on CNBC.com is Barry Sternlicht, CEO of Starwood Capital, a company possessing $60 billion in assets. On CNBC’s “Squawkbox,” he said, “I think it’s a crazy idea.” He questioned the ability of the IRS to arrive at an accurate valuation of his business: “It’s impossible to do—multiples, changes in interest rates. It’s almost an impossible thing to do.”
Really? The IRS, or even the company that files its own taxes and reports on its value, cannot figure out what the company is worth?
If it’s a matter of fluctuating values, Gabriel Zucman, an economist at UC Berkeley who helped craft Warren’s proposal, countered: ““The IRS would come up with the best valuation possible. If the taxpayers disagree, they can pay, in kind, with shares.”
Sternlicht’s main complaint, though, is this: ““You’re going to empower a lot of accountants. They’re going to be the biggest, fastest-growing industry in the world.”
So the reasons Warren’s wealth tax is “crazy” is because it’s difficult to calculate the value of a company (even though the companies themselves do it every day in market environments) and because it would create more work for accountants. Should we also not seek to pass necessary environmental policies because they might entail more work for scientists?
There is little push-back in the media when these criticisms are voiced, even when those voices pretend to speak for the majority of Americans.
For example, Lawrence Summers, Treasury secretary under President Bill Clinton, and law professor Natasha Sarin argued in a paper they wrote that a wealth tax would “undermine business confidence, reduce investment, degrade economic efficiency and punish success in ways unlikely to be good for the country or even to be appealing to most Americans.”
Again, is this critique compelling and does it really capture, while it pretends to speak for the majority, what is really “appealing to most Americans”?
The idea that a tax that would impact .1 percent of American households, costing these households two cents on every dollar of wealth over $50 million, would “undermine business confience,” sounds, on the surface, rather ludicrous, as is the idea that it will reduce investment and make the economy function less efficiently.
Let’s just think historically for a minute, and we can see that America prospered when tax rates were much higher for the wealthy. In thinking about these critiques, let’s keep in mind that the top marginal tax rate for individuals in the U.S. through the 1950s and 1960s exceeded 90%; from 1971 through 1980, the top rate was 70%; and Ronald Reagan cut the top rate to 50% in 1982. In recent years, the top rate has fluctuated between the mid- to high-30s.
Was this punishing to the wealthy? They seem to have done just fine.
And what has not been talked about are the economic efficiencies and investments Warren’s plan would spur, not to mention what most Americans would find appealing. She proposes with the revenues to provide universal childcare, to make college at public institutions tuition-free, and to address the student debt burden that creates a major drag on the economy.
Just take the last point:
College debt levels have topped $1.4 trillion and, according to many economists, constitute a major drag on our economy. Think about it: college graduates saddled with debt are reluctant, and frankly unable, to purchase a home, start a family, or create a small business, constraining key sectors that drive economic growth and vitality under capitalism such as the housing market and entrepreneurial development.
According to a study from the Levy Institute, canceling the $1.4 trillion in student debt would spur economic activity to the tune of creating between 1.2 and 1.5 million new jobs in the first few years, creating tax-paying citizens who buy houses, start families, create businesses, and so forth.
And we know that providing childcare helps people work and contribute to the economy.
So what about these efficiencies?
Beto O’Rourke, in the last debate, jumped on the bandwagon, accusing Warren’s policies of being “more focused on being punitive or pitting one part of the country against the other instead of lifting people up.”
It would be good to hear from most Americans, those already feeling punished in this economy. They’ve been pushed down for years by policies favoring the .1%.
Would not a wealth tax, such as Warren proposes, help lift them up?
It would be good to hear from the 99.9%. Maybe this constituency can get an interview on CNBC.
A lot of energy has gone into railing against the tax policy proposals forwarded by Elizabeth Warren and Bernie Sanders. In the most general terms, they both push hard for raising taxes on the extremely wealthy, the wealthiest of the wealthiest, who have been able to avail themselves of the opportunities this nation affords to accumulate vast fortunes.
If you stop to think about it, the vociferous opposition to these proposals, cast in fear-mongering hysteria that they represent the imposition of European socialism on America, is rather disproportionate to the modesty of what they actually would entail for less than the top .1% of households if actually implemented.
Yes, you heard that right—the top .1%. All of this fervor, this sturm und drang, stirred up by these proposals is about protecting the excessive wealth of 75,000 households in America. Much less, even very little, attention and energy are devoted to understanding the benefits of this tax for the majority of Americans in terms of enabling them to take care of our nation’s children, to pursue higher education, and thus to contribute to the economy.
If the tax proposals have generated this much hostility, inspiring such concern for less than .1% of households, we must wonder why. Most of us don’t belong to this elite minority group, so what is at stake in this defense. Is it some sacred standard of fairness?
Let’s unpack their proposals to find an answer to this question. And as we do so, let’s keep in mind that the top marginal tax rate for individuals in the U.S. through the 1950s and 1960s exceeded 90%; from 1971 through 1980, the top rate was 70%; and Ronald Reagan cut the top rate to 50% in 1982. In recent years, the top rate has fluctuated between the mid- to high-30s.
So, in a decade of decidable prosperity, the 1950s, the nation’s cultural ethos upheld as fair a top marginal tax rate of 90%.
What do Warren and Sanders propose?
Warren proposes a 2% tax on wealth over $50 million and 3% on wealth over $1 billion. Sanders would tax those worth $32 million at 1% – meaning his tax would hit about 180,000 families versus about 75,000 households under Warren’s proposal.
Sanders’ plan also escalates the tax rate for wealth over $500 million, which would be taxed at 4%. Wealth over $10 billion would be taxed at a rate of 8%.
In the terms of our own nation’s history of taxation, it seems hard to cry foul and question fairness.
And is there a standard beyond fairness we might just call decency?
At some point we need to ask those who protest these proposals, “How much is enough?” How much do they need? When will both we and they decide that they now have enough wealth that they give some up to make the lives of those living in the nation that helped them make that wealth livable in the most basic of ways.
Robert Frank reports for CNBC that under Sanders’ plan, Jeff Bezos would pay $9 billion in taxes. The deadline screams with outrage. And we get the list: Bill Gates would pay $8.6 billion, Warren Buffet $6.6 billion, Mark Zuckerberg $5.8 billion, and so on.
Surely, these are large tax bills. To put it in perspective, if one earned the comfortable salary of $100,000 annually, it would take 9,000 years just to earn enough to pay Bezos’ bill.
But then think about tens of billions in income these people enjoy. Are they suffering? Mark Zuckerberg, worth $66 billion, could spend $1200 per minute for a century and still be wealthy.
That person earning $100,000 annually, makes $3 million working for 30 years. These billionaires make multiples of that in one day.
They won’t be suffering, but many in the U.S. do, struggling to meet basic health and housing needs, afford education, and more. So how much is enough before we decide those with billions can pay a little more? Before they decide?
Here are the benefits of Warren’s plan:
The tax would impact, it is projected, about 75,000 households (less than .1%) and raise $275 trillion over ten years. These revenues would be used to pay for universal child care and pre-K ($700 billion over ten years); free college tuition at public institutions, money for historically Black colleges, and the forgiving of a good portion of student loan debt (together all of this costs $1.25 trillion over ten years); and then she proposes the remaining $750 billion would be down payments on medicare-for-all and the green new deal.
And let’s point out that many of these benefits help the wealthy as well. We all need to save the planet.
We often hear from state and national leaders, when it comes to making budgets, that we just don’t have enough to take care of all our needs.
The plans of Warren and Sanders beg the question, “Do we have enough as a nation to meet the needs of our people?” The answer seems to be, emphatically, “Yes.”
So what holds us back from creating a humane economy and society, the Great Society?
We love to believe that people simply don’t deserve to have basic needs yet, that they don’t work hard enough or contribute enough—that they simply aren’t deserving.
Maybe one day we’ll ask ourselves if Jeff Bezos really works tens of thousands of times harder than the teacher who helps educates his workers, the custodian who keeps his office clean, the factory workers who make the products he sells.
For now, let’s ask, “How much is enough?” and “Don’t we have enough to go around?”
Imagine picking up a newspaper, or scrolling through your favorite internet news source, and coming across articles with headlines such as “How to Burglarize Your Neighbor’s Home,” “How to Undermine Public Education for America’s Children,” or “How to Destroy Sidewalks and Streets and Sabotage Other Infrastructure.”
I like to think you’d find that news source rather anti-social, even criminal, in its violent and vandalistic hostility toward our neighbors, our fellow people living in the United States. You might even think this news source must be the publication of some underground fringe group and certainly not mainstream media production.
And yet recently CNBC.com featured a video with the headline “How Married Couples Can Avoid Elizabeth Warren’s Wealth Tax.”
If you think about it, an article instructing people in how, put nicely, to avoid—or, put more bluntly and accurately, downright evade—paying taxes is really not all that different from the articles I invented above. Tax evasion is, of course, a federal crime; and while it might commonly be understood as a crime against the government, it is really, also, a serious and violent crime against the people.
Taxation, properly understood, is the mechanism we have for enabling people to pay their part, their fair share, for the services, projects, and infrastructure of which we all necessarily avail ourselves in the course of our daily lives and most certainly in the conducting of our livelihoods, the business and work we in earning our daily bread and supporting our families.
America, indeed, provides a fertile environment for growing and accumulating wealth. And, undeniably, as Elizabeth Warren has famously pointed out in the past, those who have had the good fortune through their genius, hard work, talent, or just dumb luck to experience great financial success have surely taken advantage of what the nation has provided them in the form of roads, bridges, ports, educated workers, security, military and police protection, and so forth.
While we can argue over what constitutes one’s fair share, we can’t really argue the fact that paying taxes is simply paying the bill for all the services and infrastructure the nation provides for individuals to generate wealth.
Not paying taxes, conversely, is equivalent to taking money from one’s neighbor or helping to destroy the public infrastructure we all need and use. If you avoid or evade paying taxes on the wealth you’ve earned in this nation, then I’m either going to need to pay more to get the same services I’ve been receiving or else those services will be curtailed. The education I receive won’t be as effective; my access to healthcare will be diminished; bridges and roads may crumble; social security benefits may vanish leaving me high and dry in my senior years; and so forth.
Put another way, when people engage in tax evasion they are defaulting on their obligation to support the infrastructure and the cooperative public enterprise, in which we all one way or another participate, that makes all of our lives possible, that keeps us healthy, that educates us, that basically keeps alive.
Hence, evading one’s tax obligations, paying one’s bill, is in fact a violent crime against people. It’s a dine and dash of great magnitude.
And let’s really think about the minimal impact on people’s wallets and substantial benefits for people’s lives in the nation Warren’s proposal, under attack all week on CNBC, would have.
When it comes to the tax bill Warren is proposing, here are the basics: For every dollar in assets people own over $50 million, they pay a 2% tax—or 2 cents per dollar. For every dollar over $1 billion, they pay 3%.
The tax would impact, it is projected, about 75,000 households (less than .1%) and raise $275 trillion over ten years. These revenues would be used to pay for universal child care and pre-K ($700 billion over ten years); free college tuition at public institutions, money for historically Black colleges, and the forgiving of a good portion of student loan debt (together all of this costs $1.25 trillion over ten years); and then she proposes the remaining $750 billion would be down payments on medicare-for-all and the green new deal.
And, let me repeat, this tax impacts less than .1% of households. The benefits seem transformational for our nation’s people, for our nation. And while some dispute whether the tax can really bring in the $275 trillion Warren’s team projects because of tax avoidance schemes, imagine if it brought in even half of what is projected. The good for people’s lives would be tremendous.
And yet on CNBC, the energy and thought go to pondering the legality of schemes for those who own more than $50 million assets to evade the tax.
Robert Frank explains:
The strategy is fairly simple. Warren’s plan would impose a 2% annual tax on wealth over $50 million and a 3% tax on wealth over $1 billion. If a wealthy couple is worth $100 million, they would pay a 2% tax on any wealth over $50 million, which in their case would amount to $1 million a year. But if they divorce and split their fortune in half, they would each be worth $50 million and neither would owe any wealth tax.
We know that the Philippines, Kuwait, Turkey, and Saudi Arabia are among the foreign governments booking large blocks of rooms at the Trump International Hotel with the hopes and intents of currying favor with the President. And we know that foreign lobbyists, particularly from Saudi Arabia, are doing the same.
And we know that Trump’s Mar a Lago resort is raking in American taxpayer dollars by the boatload every time he vacations and holds official government dinners and events there. He flaunts this practice shamelessly and flagrantly, making no bones about it.
These facts have motivated Senator Richard Blumenthal, among 200 democrats, to sue Trump for violating the Constitution’s Domestic and Foreign Emoluments clause. Most basically, these clauses are designed to prevent anyone occupying the Presidency from exploiting the power and influence the accompanying the office to enrich oneself.
And, of course, Trump’s conversations with Russia regarding his pursuit of a vainly self-named tower in Moscow continued, he purportedly acknowledged, through his presidential campaign up until the November 2019 election day.
I worry there’s a lot we don’t know, though, in terms of the extent to which Trump is really abusing his office to accumulate wealth at the expense of the nation’s population he is supposed to serve.
Let me explain what I’m talking about by presenting the following incidents:
*A Bloomberg headline from May 6 reads: “Trump Trade Tweets Send Grain Markets Driving to 42-Year Low.” In the tweet, Trump threatened to escalate the trade war he is waging with China.
*On April 26, CNBC published a story with the following headline: “Top OPEC, Saudi officials didn’t discuss lowering oil prices with Trump: report.” Trump had tweeted earlier that day, “Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement.” This tweet caused oil prices to tumble—and oil stocks with them.
Consider Trump’s power to influence the market just through his tweets. The stock market, we all know, is a sensitive and volatile instrument that swiftly and strongly responds to rumors, whispers, and reports without taking time to verify the truth of any utterances. Elon Musk was fined $20 million by the Securities and Exchange Commission for tweeting about the possibility of taking his company, Tesla, private.
There is no such sanction for the President, who could very well be using the Presidency not so much as a bully pulpit but as a market-moving pulpit from which he, his businesses, and his circle of cronies could easily benefit.
Trump has without question showcased his tendency to use the Presidency to further his interests, even at the expense of our nation’s population and security.
Indeed, the expense to people in the United States clear. While Trump, for example, sees
Celebrants of the recent tax bill have claimed, echoing Trump’s top economic advisors, that the massive corporate tax cut will indeed trickle down or, to mix metaphors, serve as the proverbial rising tide that will lift all boats.
CNBC’s Patti Domm was quick to validate this exuberant claim, pointing to announcements from Wells Fargo and Fifth Third bank that they will be raising their minimum wage to fifteen dollars per hour and from AT&T and Comcast that they will be showering their employees with bonuses. Other reporting on CNBC suggest it’s too early to tell, as many companies Fred Imbert and others reached out to hoping to forecast the impact of the corporate tax cut were more reticent about how this tax windfall will trickle down to employees, adopting a wait-and-see attitude.
Before we get too exuberant, let’s keep in mind not just recent history but also the longer arc of history in terms of the relationship between corporate profits and wages as well as the most basic dynamics of capitalism. The bottom line of capitalist dynamics is that higher corporate profits do not translate into higher wages. Indeed, higher profits have typically been achieved through lowering workers’ wages and benefits.
First, recent history: Remember when Trump lavishly offered up seven million dollars of taxpayer money to the Carrier corporation in order, supposedly, to persuade Carrier not to re-locate factories and jobs to Mexico? Trump generated a self-aggrandizing headline, but Carrier ended up still moving jobs to Mexico and eliminating over 600 jobs from the Indiana workforce.
That’s one reason not to get prematurely rapturous about corporate trickle down.
Another reason to be skeptical about corporate windfalls translating into rising wages is that since the 1950s we have seen corporations fare better and better while worker wages, including the minimum wage, have stagnated. Indeed, last March, well before the passage of this tax cut, The Economist reported, as part of its cover story, that corporate profits in the United States were in fact enjoying record performance.
So, given this record corporate performance in terms of profit generation, we should have already seen corporations raising wages, expending monies in capital and infrastructure investment, and showering generous bonuses on its employees.
If this scenario happened, I guess I missed it. Unfortunately, I didn’t miss it. It just didn’t happen.
And it likely won’t.
Indeed, at a meeting of the Wall Street Journal’s CEO council in early November, Gary Cohn asked CEO’s to raise their hands if the GOP tax cut proposed at the time would spur their companies to invest more and raise wages. In a moment Business Insider termed “awkward,” few CEO’s raised their hands, reinforcing the reporting of CNBC’s Fred Imbert.
These are not left-wing anti-capitalist ideologues doing this reporting. These are business journalists.
And these business journalists are just reporting the facts validated by the history of capitalism’s dynamics. The end game of corporate behavior is to increase profits, not to give money away charitably because they have it. In fact, corporations often push to lower wages and benefits to increase profits. They aren’t looking for any reason to raise wages.
Are we really supposed to be buying this bill of goods capitalist President Trump and the corporate bedfellows with which he has staffed his cabinet and advisors are trying to sell us?
They know full well how capitalism works. And corporations raising wages because profits and income increase ain’t how it works, and it never has been.
Take Trump himself. Recently Trump’s Mar-a-Lago resort requested and was awarded 70 H-2B visas to hire foreign workers. According to Trump, John Bowden at The Hill reported, “It’s very, very hard to get people. Other hotels do the exact same thing.”
Really? Is that why Bowden also cited CareerSource spokesmen Tom Veenstra as highlighting, “We currently have 5,136 qualified candidates in Palm Beach County for various hospitality positions listed in the Employ Florida state jobs database.”
Free-market advocates typically oppose minimum-wage legislation, believing that the market should determine wages. Capitalists understand that corporate profits don’t determine wages but rather the dynamics of labor supply and demand do.
In the case of Mar-a-Lago’s hiring practices, Trump’s resort is deliberately trying to undermine the forces that raise worker wages by bringing in foreign workers—because that’s how capitalism works. Corporations, like Carrier and Trump’s businesses, seek to pay the lowest wages possible.
So, if history is any indicator, as it typically is, the dynamics of capitalism won’t change, such that we cannot expect increased corporate profits and income to translate to better treatment and higher pay for workers.
Such a scenario would defy the logic of capitalism, as Carrier and Mar-a-Lago demonstrate. And our capitalist President, his cronies, and the Republican Congress are simply lying about this reality of which they in their wealth are well-aware.
“What is the best way to decimate a community? Deny its people access to healthcare.”
“What is the best way to decimate a community? Shut down its largest employer.”
These questions were asked and answered by Tim Egan, CEO of Chicago’s Roseland Community Hospital, last Sunday, January 15, as he opened his comments at a rally to defend the Affordable Care Act (ACA) against the GOP’s ongoing efforts to repeal it. Hosted by the Service Employees International Union (SEIU) at its Chicago headquarters, the rally included such heavy-hitting speakers as Senator Dick Durbin (D-IL), Congresswoman Jan Schakowsky (D-IL), Cook County Board President Toni Preckwinkle, and SEIU President Mary Kay Henry, among others who shared their personal testimonies of how the ACA has literally saved their lives and how its repeal would certainly put their lives in danger.
Egan’s speech was particularly compelling because it highlighted the GOP’s hypocrisy when it comes to both improving the lives of average citizens and fostering fertile conditions for business. The Republicans like to represent themselves as the party with policies that help people by serving the interests of business, believing that policies that facilitate businesses by cutting taxes and eliminating regulations will improve the economy overall and create jobs, thus helping America’s working-class majority, regardless of how low-wage the jobs might be. Speaking as a corporate CEO, though, and not one of the American masses Republicans typically ignore, Egan made plain and clear that from the corporate perspective repealing the ACA would be devastating for business as well as people, threatening the very existence of his hospital, a primary employer in the Roseland community, not to mention millions of lives.
In her comments, Schakowsky emphatically reiterated this reality that GOP policies are neither pro-business nor pro-people, pointing out that if Republicans repeal the ACA, Illinois is projected to lose 117,000 jobs in 2019 and 33 billion dollars in federal funding between 2019 and 2022, a devastating blow to an already faltering Illinois economy Rauner has done nothing positive to improve. Highlighting GOP hypocrisy, Schakowsky called out Illinois Republican Governor for his silence on the issue of the potential ACA repeal and his refusal to speak out against it in defense of the Illinois economy and its citizenry.
So what is the point of Republican policy that seems both economically and humanly destructive? As I have argued previously on the pages of PoliticusUsa regarding the Republicans and Rauner in particular, we need to understand Republican scorched earth policies such as we have seen Rauner’s Illinois, Bobby Jindhal’s Louisiana, Sam Brownback’s Kansas, and Scott Walker’s Wisconsin as not pro-business but pro-wealthy. This distinction is of vital importance if we are to understand the GOP agenda. The Republican project, as I’ve argued, is to re-distribute wealth to the top, acceleratingly so, not to help business and by extension, perhaps, the working-class majority. Egan’s comments make this agenda clear.
Indeed, even the pro-business CNBC website has featured reports underscoring the far-reaching economic devastation and job-loss repealing the ACA would entail. Dan Mangan, for example, reports that according to a study from Milken Institute School of Public Health at George Washington University, the repeal of key provisions of the ACA would trigger massive job loss to the tune of potentially three million jobs in healthcare and other sectors as well as a 1.5 trillion reduction in gross state product from 2019 to 2023, triggering also a damaging slump in consumer spending. As Mangan puts it, “Spending less by getting rid of Obamacare could end up costing a whole lot more.”
So what’s the end game for Republicans? Well, according to Tony Nitti in a piece he contributed to Forbes (no left-wing rag), repealing Obamacare would result in an average tax savings of $33,000 for the wealthiest one percent of Americans, while those making between $10,000 and $75,000 would actually see their taxes increase—and millions would lose health insurance or have to pay astronomically more for it, effectively an additional tax increase. The end game is simply to give more to the wealthy, which is not the same thing as helping businesses or improving the health of the economy. (That the House GOP voted to conceal the costs of repealing the ACA from the public arguably underscores the repeal is not economically salubrious for the taxpayers and the nation.)
And the economic and human costs go together. At the Chicago rally, Tracy Trovato told the story of how her husband Carlo was diagnosed with leukemia in 2014. He has been cured after hundreds of thousands of dollars in treatment. Should the cancer return, however, and Obamacare were to be repealed, allowing insurance companies to re-instate lifetime caps on coverage, it is likely Carlo would not be able to afford treatment to save his life, or the Trovato family would endure absolute economic ruin. Trovato’s story makes clear the human and economic costs of repealing the ACA. Her family’s story is not singular but representative, and having widespread bankruptcy is not good for the health of our economy, not to mention our humanity.
We need to see that Obamacare is not a hand-out, but simply sound economic policy that serves both the American people as a whole and American business.
We also need to see that Republicans serve neither but simply want to accelerate the distribution of wealth to a speed that will break all of our necks, those of our working and middle classes and those of the business world.
The response of the mainstream media to Republican debate demands is varied, from the Times' mocking to NBC's offer to make grab their ankles
Bernie Sanders did something that no other politician does. The Democratic presidential candidate went on CNBC and criticized the sick greed of Wall Street.
Ted Cruz, like every other Republican, hates being quoted, and it's never his fault that he said it, but the media's fault for reporting it
If we were able to ask the average American if s/he would be willing to pay $12.50 annually so that thousands upon thousands of people who work for a living might stand a chance of meeting their basic needs, I wonder how s/he would respond?
In an interview with CNBC, Speaker of the House Boehner said that President Obama is sick for making post-sequester life hard for Republicans.